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President Vladimir Putin: I would once again like to thank the organisers of today’s meeting.

Looking around the room, I do not know all the Japanese representatives, of course, but I can see that this is a large and representative forum. I see also that the Russian side is well represented here. Indeed, the Russian and Japanese business communities have not ever gathered in such a format before. I hope that the meeting’s participants will have the chance to hold informal discussions once the part of the forum that I have participated in is over.

Our colleagues did not raise a lot of questions in their speeches, but the summary of the Japanese business community’s general positions that has been passed on to me sets out a whole series of questions that, clearly, are of interest and concern to our Japanese colleagues. These questions are divided into several parts and have been given the heading: “What we would like to see from the government of the Russian Federation”. At the top of the list are issues regarding legislation and the tax system, along with other systems and procedures.

I think it was Mr Anzai who mentioned in his speech that our Japanese partners consider it necessary to continue improving the tax legislation in our country. I think this is in part a fair comment. Any legislation should undergo continual improvement, be it Russian, Japanese or any other country’s legislation, because life develops faster than any legislation and often legislation is indeed a step behind. But I think that in the Russian context, what the country most needs at the moment is not so much to keep changing the legislation as to ensure its stability. We are always confronting government specialists with the need to end the frequent changes to the laws. I think that, ultimately, a stable legal environment is a lot more important for business, although there are of course areas that do require our particular attention and do need examination. This is a public process and our decisions in this area are transparent. The government keeps the public constantly updated on its plans aimed at reducing the tax burden. The overall tax burden on the economy in western Europe comes to around 38–40 percent, while we have made considerable efforts to reduce the tax burden over the last five years and have brought it down to around 34–35 percent. We plan to continue reducing it further.

We intend making improvements to the tax legislation regarding natural resource extraction and plan to introduce a differentiated tax rate for the mineral extraction tax. We also have other ideas and plans in this area and I want to assure you that they are all transparent. Information on all these plans is available on the Russian Federation government’s website and they are actively discussed with the business community, including with the Russian Union of Industrialists and Entrepreneurs, headed by Mr Shokhin, who was just recently elected to this post and is here today, and with representatives of the Russian Chamber of Commerce and Industry.

Regarding the question of simplifying and raising the effectiveness of various administrative procedures such as visas, official approvals and customs procedures, I fully agree. Concerning visas, these are procedures settled exclusively on a reciprocal bilateral basis. Whatever visa possibilities Japan offers us, Russia will offer its Japanese partners the same. This is the general principle the Russian Federation follows in its relations with all its partners. I hope very much that our two countries will come to the optimum decisions for settling this issue. We support full liberalisation in the area of visa procedures – on a reciprocal basis, of course.

Next, ensuring transparency and coordination of all administrative procedures, including the issue of approvals, licenses and so on – here I also agree. I think that we do indeed need to take the necessary steps to ensure that these issues are settled with as little red tape and as rapidly as possible. We are working on the corresponding decisions, including in the area of legislation, that will bring these issues to a considerable extent under the jurisdiction of civil law rather than administrative law. In any case, this question is under examination and we are aware that there is a problem in this area. The same goes for accounting and financial reporting regulations. Incidentally, compared to some countries with a so called developed economy, I think that we will manage a more rapid transition to international accounting and financial reporting standards.

Concerning infrastructure improvement and industrial development measures, I can say the same here as I said for improving the taxation system. We have a whole range of measures in this area and they are all transparent and known to the public. One point in this area is economic development of the regions. In my address earlier I mentioned that the Russian government has regional development plans for Siberia and the Far East. This is probably the only regional programme drawn up at federal level with the aim of supporting and developing the regions of the Far East. We will create all the conditions necessary for economic development, make sure the region offers particularly attractive conditions, and we will try to locate some of the special economic zones that I have already spoken about today in this region.

I would like to draw your attention to one other circumstance regarding infrastructure, and that is that railway transport tariffs have been calculated in such a way as to shift part of the burden of transport from the Far East and Siberia to the central regions and spread it across the tariff system in general. In other words, tariffs for long-distance transport from Siberia and the Far East are cheaper than for shorter routes in the European part of the country. In this respect, regions such as the Far East benefit from preferential treatment and this will continue in the future.

Regarding measures to attract foreign capital, as you know very well, this or that concrete measure is not enough; what is needed is to create an overall favourable climate, above all a positive macroeconomic climate. Political and social stability are equally essential. I would like to note that aside from the annual GDP growth of 7 percent that I mentioned, we have a double surplus in Russia today – a primary budget surplus and a foreign trade surplus. In order to maintain this macroeconomic stability, we are making use of the large flow of petrodollars into our economy and have created a fund for future generations that we have called the Stabilisation Fund. We have created this fund in order to limit the inflow of unjustifiably large amounts of money supply into our economy, fight inflation and maintain high growth rates. This, coupled with other measures taken by the government, including in the social sphere – here we have developed a whole series of national programmes in the areas of healthcare, housing and education – enables us to ensure both macroeconomic and social stability. I hope that our country’s citizens will feel the benefits of these plans as the government pursues their implementation.

People’s incomes are showing stable growth – real incomes are rising by 10–11 percent a year on average. This and other results give us reason to expect that the situation in Russia will remain stable over the medium and long term. It is this that creates a favourable investment climate for Russian and foreign capital.

Regarding the issue of increasing and broadening the amount of information we provide, I agree that we do not do enough in this area and we have not yet built up the relevant experience. As our economic ties develop, we will work to settle this issue.

Thank you very much for your attention. I would like to thank my colleague, Mr Okuda, for Toyota’s decision to begin a joint venture in St Petersburg. This is definitely the right decision and I can assure you that we understand the importance of this decision for your company and will provide all the support we can to help you carry out your plans and projects in Russia as successfully as possible.

Thank you very much for your attention.