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President Vladimir Putin: Good .afternoon, dear colleagues,

Our meeting today is taking place in Kaliningrad, which is currently celebrating the 750th anniversary of its founding. Allow me once again, on behalf of all present, to congratulate the residents of Kaliningrad on this important date, to wish them health and happiness and wish the city prosperity and development. Historically and geopolitically, Kaliningrad is a special part of the country. We all know how many greatly diverse problems are caused by its isolation from the rest of our territory. The presence here today of the leaders of all Russia’s regions is a pleasing and also deeply symbolic fact. Kaliningrad and its residents should be absolutely certain of our support and our common desire to be closer to them and work together with them to resolve the complex issues this region faces.

Dear colleagues,

On our agenda today is the issue of raising the role played by the Russian regions in pursuing the social and economic development goals our country has set. Above all, we will be looking at the issue of the regions’ powers and their responsibility for ensuring economic growth – in other words, for raising people’s living standards.

Directly linked to this matter is the question of improving federal relations. This is a question of reaching an optimum delimitation of powers and functions. This is a fundamental issue for the effective implementation of our economic policy throughout the country in general and in the regions in particular.

As you know, this issue has been the subject of much debate over recent years. There was an objective need for such debate and it has been unquestionably useful. It has genuinely helped us to formulate the political and legal foundation for a new development of relations between all the different levels of power in the Russian Federation.

As you also know, we have analysed these issues regularly at the State Council, basing ourselves on the actual practice of federal relations and on concrete and diverse regional experience.

Now that the regions are already working in new conditions, we need to continue moving forward together and work on the tasks presented by this stage in the reform process. I am referring here to a change in the quality of the regional authorities’ work and a greater role and greater responsibility for them in all areas of social and economic life.

Speaking of this new quality of work, I would like to touch on a broader subject, that of optimising the state’s regional policy. It is clear that we need to find new conceptual approaches to this area of state policy. Now, when the regional authorities are becoming a more responsible and influential part of the state’s management, it is especially important to reinforce the unity of our national goals and together resolve the major national tasks we face, thereby letting ourselves be guided by our country’s strategic interests.

In this respect I want to especially note two fundamental tasks. First is to create a transparent system of financing of the regional authorities’ powers. Second is to put in place a mechanism of solidarity-based political responsibility for raising people’s living standards.

I want to add that I have signed a decree that yesterday we discussed at the State Council Presidium. I informed the Council memebers that the draft had been prepared and today I signed this decree on cooperation and coordination of the activities of the regional executive authorities with the federal organs of power in the regions. I hope that this decree will also contribute to successfully resolving the tasks I just mentioned.

Our meeting is taking place in the native city of the great German scholar and world-renowned philosopher Immanuel Kant. As you know, in his writings on the state and law, he particularly emphasised the importance of the division of powers and he saw this principle as being a key to harmonisation and the achievement of balance in the public authorities’ work.

These ideas still hold true today, and not just for Russia but for all countries without exception. Our goal in renewing our regional policy should be to create a balanced, stable and effective system of federal relations. In carrying out a careful delimitation of powers we come closer to making our federation stronger, to optimising economic life in the regions, and ultimately, to achieving greater economic growth throughout the entire country.

Today, we are also to discuss a series of issues concerning delegating a number of additional powers to the regions. As you recall, we discussed the need for this work at the two previous sessions of the State Council. You have the list of 114 powers that the State Council’s working group drew up and thinks should be transferred to the regions. The federal executive authorities have already approved this list. We discussed this aspect of our work in detail yesterday at the Presidium meeting and I agree with those colleagues who spoke yesterday in favour of expanding this list. This is not an exhaustive list. I have discussed this matter with the Prime Minister and with the heads of the ministries and many of them agreed with the conclusions of the regional leaders on the need to expand this list.

But once we have settled on what has been prepared a no less important phase in the transfer of these powers will begin and we must be completely legally and financially prepared for it. Based on the results of our work, the government will receive the instruction to draw up the necessary normative-legal base over the course of two months. Amendments will be made to laws where needed and government decisions, and if necessary, presidential decisions, will be prepared as required.

As you can see, we are moving ahead according to plan on the division of powers. We must ensure that it is clear who has responsibility for what and that powers not end up floating in suspension between the different levels of authority. We must make absolutely sure that this situation does not arise because these powers represent the fulfilment of concrete commitments to our citizens.

I want to make it clear that this decision to delegate additional powers to the regions is not an aim into itself and not the result of some kind of itch to make administrative changes. Our primary goal is to establish the conditions for economic growth throughout our country and create more room for management initiative. But we only need initiative that encourages entrepreneurial freedom and under no circumstances will be used to stifle this freedom.

I think that you understand very well that authority means above all responsibility. This is why the federal authorities, in handing over part of their powers to the regions, will monitor very closely how they are used. I think you will agree with me that in the event of a negative assessment of how these powers are being used, the appropriate measures will be taken, including taking back powers that are not being adequately executed.

Furthermore, considerable steps have been already taken at federal level to stimulate regional economic growth. The new political mechanisms that increase the role and status of the regional authorities were created with precisely this objective in mind.

All of these mechanisms – the new procedures for electing the chief executive officials in the regions, the measures taken to increase the authority of the regional legislative assemblies, the elections based on party lists and the decisions we will make today – should be used as much as possible to benefit people and to invigorate economic life in the regions.

It is precisely in this objective that we are to complete work on dividing revenues between the federation, the regions and the municipalities in order to provide new and reliable funding sources for programmes and also optimise taxation procedures. I know that there are still a lot of problems in this area, especially regarding municipal level and especially with regard to law 131. I would ask you to continue this work and not lessen the attention you pay it.

Measures such as these will enable us not only to unite our efforts but also to coordinate our positions more effectively in order to resolve the most pressing problems we face. Ultimately, they will help us reach our strategic objectives such as doubling the GDP and fighting poverty.

Nobody has removed these objectives from the agenda and we cannot do so until we have reached these goals. These are the tasks that stand before our country and they remain the greatest priority for the authorities. Based on this, we must develop a modern regional economic policy that meets the demands of the times.

We know that each of the country’s regions has its own long-term plans and management experience built up over the years. But we also see that, unfortunately, this daily work does not always bring visible results. In this respect, we will need to review and overhaul a whole number of management models that are proving ineffective and not holding up to our present demands. But an innovative approach alone will not be enough.

I hope that now that the regions have been given the broadest powers, you have received or are now getting the opportunity to make use of your unique competitive advantages by activating your internal growth sources and will then be able to carry out a quality overhaul of your regional development programmes.

These programmes should contain new effectiveness evaluation criteria, mechanisms for private sector-state partnership and new approaches to distributing the region’s financial resources.

These financial resources have increased significantly and are increasing all the time as the economy grows and economic growth picks up pace. Their allocation to genuinely promising objectives and strategic goals, therefore, is a political issue in the fullest sense.

I would also ask you not to forget about cooperation between the regions. The plenipotentiary presidential representatives in the federal districts should, of course, be your partners and allies in this work. Furthermore, work should also progress on consolidating public and political forces in the regions around resolving the tasks at hand.

Finally, a few words on the regional component of the federal government’s work. It is clear that renewal of regional policy requires a comprehensive approach to development and implementation of the government’s regional activities and the different ministries will not be able to resolve this task acting on their own.

In this context, the government should take on the task of developing the organisational, legal and financial mechanisms needed for a qualitatively new system of relations with the regions. I know that the Prime Minister shares this view and is working on putting it into practice.

In conclusion, I want to repeat once again that economic growth, social development and improvement of our citizens’ lives are our common and indivisible responsibility.

I now give the floor to Vladimir Alexandrovich Torlopov for his report.