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President Vladimir Putin: Good day, dear congress participants,

It gives me great pleasure to greet all of you gathered here today in this hall. Your plans and activities are linked not just to economic development, but to the country’s outlook and prospects as a whole, and so I think it is fitting today to raise some of the principal development issues our country faces.

We have now reached a qualitatively new point in our social and economic development. This is borne out by the results and figures that you know well and that we have repeated often over these last years with satisfaction. It is also borne out by the principally new demands that have emerged in society in general today and within the business community itself. Along with greater possibilities have come greater demands on the authorities, and on the business community too. We now have to ensure consolidated and coordinated work on priority tasks and we are responsible together for finding the most effective means of achieving our objectives.

I would like to add that we have a wide range of possibilities at hand and I want to just name a few of them here.

First, getting private capital involved in working on national objectives and carrying out major national projects is a potentially very productive course to follow. We already have some experience based on coincidence of commercial and public interests. We have positive experience and, unfortunately, we have negative experience as well. A sober and objective assessment of this experience makes us think and draw conclusions for the future.

Cooperation between the state and business should not turn into a means of saddling the private sector with unproductive expenses and taxes. Unfortunately, this situation still occurs, both in the federal centre and in the regions. But when we have a market that has proven itself to be productive, state intervention is not necessary and indeed, can be harmful.

Second, it makes most sense to use budget resources in situations where there is virtually no private sector competition, where long-term, strategic interests of Russian society as a whole are concerned and where there simply cannot be rapid commercial returns to be made on investment. In this context, science-intensive production is an obvious area for cooperation between the state and the business community. Russian business is already ahead of the state, using the most advanced technology in management, marketing, expertise, logistics and communications. At the same time, the state is still the primary holder of rights to scientific developments, new materials and products.

I think our common task is clear – we need to consolidate the achievements that are currently scattered among the diverse sectors of the Russian economy and scientific fields, we need to invest more actively in the knowledge economy and, ultimately, we need to transform our achievements here and there in certain areas into all-round, systematic cooperation.

Another promising direction is that of getting business involved in carrying out state infrastructure projects such as transport and highway projects, projects in the energy sector and in building up the infrastructure in border areas. Private capital is fully capable of effectively and independently developing the social infrastructure based around new roads, ports and settlements, and to develop it with profit both for itself and for the state. These are areas in which market interests and Russia’s geopolitical interests are very closely bound together, and it is no exaggeration to say that the same often goes for the state’s security interests.

I think that we should not delay in creating a legal foundation for cooperation between the state and the business community on priority programmes, and the state must guarantee stable working conditions for private investors, including by providing a framework for concession agreements and civil trade in intellectual property rights.

Overall, the state must guarantee that the results of privatisation deals that have already taken place will not be reviewed, and it must ensure all possible protection of private property as one of the foundations of the market economy. State officials must protect private property just as much as they do state property.

What we in turn expect from you is more active investment in social projects, science, education and developing the human factor in general. Let me go into a little more detail here.

We have spoken before about the importance of systemic understanding of the social responsibility of business. It is clear that the success of particular individuals or corporations only rests on a genuinely solid foundation when it is forward-looking, bound to the real needs of our country’s people and aimed at building up business over the long term in specific sectors or parts of the country.

Our country is becoming increasingly attractive for business initiative, for life in general, and it is attracting capital, people, specialists, from the CIS countries and further abroad. But this capital has to accumulate, build up constantly in Russia, and it has to help raise the living standards of those who create it and of the Russian people in general.

I am convinced that the Russian business community has every interest in having a favourable social environment here for its activities and should be looking to establish itself solidly and for the long term in its own country.

You know around two thirds of the total labour force are now employed in the private sector. This means that it is the private sector that is forming the living standards and employment conditions for most Russians and determines the conditions for their healthcare and pensions, education and professional training.

An instinct of healthy patriotism and feeling of responsibility for our country lie at the heart of the national unity that binds Russian society together, and the Russian business community is a major part of this society, and so the state will support the business community’s interests, just as it supports those of teachers, doctors, students, scientists, hired workers in industry and agriculture, and, of course, it will encourage commercial success.

I would also like to mention two very pressing issues that are not directly related to your professional activities but that are of great significance for the state of affairs in the country in general.

First, the issue of developing the North Caucasus. The low living standards, lack of jobs and general economic depression are the main fertile soil here for extremism, and I ask you to show practical interest in stabilising the socio-economic situation in Russia’s southern regions. There should be no illusions: business has just as much objective interest in this as the state.

The second practical question is the shortage of qualified workers and technical personnel in the country. I am sure that the overwhelming majority of those present today will agree with me. We need to work together to revive the system of secondary-level vocational education, get it up to standard and ensure it meets the demands of the modern market, the market for knowledge and skills.

Furthermore, we also need to move towards further improving the tax system and ensuring that taxation conditions and procedures create as comfortable an environment as possible. Your recommendations will be useful and appropriate in this context. I hope that the practice of joint work between the government and the business community, including your organisation, will continue in this area.

I would like to stress that the state must and will defend the interests of honest business, and major investigations in the business sector, including tax investigations, should not and will not be seen as a signal to look for a threat to state interests in every new business that sees the day.

But business must get into the habit of paying its taxes, abiding by the law and not looking for ways to avoid taxation. Taxes are paid to the treasury in the national interest, and this includes the interests of business itself.

Finally, business representatives could play a more active part in the work of the newly created Public Council along with other groups representing different parts of Russian society and help to strengthen our state. This means working towards a unified economic space, overcoming local rivalries and protectionist mentality and breaking down the barriers to regional markets. There can be no place in the regions for categorising businesses as “ours” and “outsiders”. This ultimately leads not only to commercial losses but is also a threat to the country’s unity.

In conclusion, I would like to say once again that private enterprise is the foundation of the modern Russian economy and is its future, and this means that our experience of working together and your knowledge are very important and much-needed today and should be put to use to help us achieve the key objectives on our national economic agenda. I wish you success in this work from the bottom of my heart.

Thank you for your attention.