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President Vladimir Putin:

What I would really like to see happen is for the realisation of the ideas at the foundation of the national projects to go beyond the boundaries of official structures and agencies, including government bodies. I would like this work to take on a much broader dimension so that the public and the diverse professional communities not only understand, feel and see what is being done, but can have a direct practical impact of their own on this work. In this way, as we work towards the objectives in the priority areas we have set, we can expand the scope of our work together on the most important issues facing our country.

Technology makes it possible for us to be in direct contact with the regions and, more importantly, to listen to the views and assessments of the people directly involved in the projects’ implementation.

I would like to note that we have already achieved some results that can now be analysed and discussed. Education and healthcare workers are now receiving additional payments and we have selected the universities that will receive state support to carry out innovative programmes.

An agricultural loans system is gradually being developed. What is important is that the agricultural enterprises themselves are now starting to receive money. Overall, we have put in place the required regulatory base, and I would add in this respect that we have managed to do this despite the serious administrative problems that unfortunately still exist in the existing management system.

It is the project management approach that allowed us to develop a model that binds the Federation, the regions and the municipalities together in a common mechanism working towards a common result. But I would like to make it clear straight away that this does not represent a move away from the division of responsibility principle. As has already been said, this cooperation will continue to be based on clear planning and the definition of perfectly concrete tasks for each of the participants in the projects, as well as the obligations of the authorities, including financial ones.

Dmitry Anatolyevich, you have the floor.

Dmitry Medvedev: Thank you, Vladimir Vladimirovich.

The national projects are one of the key issues in the Government’s work from day to day and from week to week. We have drawn up the parameters of the national projects and set the results that we seek to achieve over the coming two years of work. As you already said, the projects are directly linked to resolving the more global issues our country faces, including the demographic problem. This is reflected in the work on the draft budget for next year and we hope that future budget planning will continue to take it into account.

The main components of the projects’ management have been put in place now and, though we faced certain difficulties, the legal base for our work has been created and we have begun implementation of all the projects. Work in the regions shows that people are taking a real interest in carrying out these ambitious undertakings. Surveys show that the number of people who are quite well informed about the projects has doubled. What is particularly important is that more than half of the respondents say they expect the implementation of these projects to bring positive benefits, and it is now our job, of course, to ensure that our work lives up to their expectations.

Coming now to the concrete results that have been achieved so far and the problems we are currently working on.

First, concerning the project in the agriculture sector, federal budget expenditure on agriculture has increased by almost 75 percent this year compared to 2005, that is, from 18.8 billion roubles to 32.5 billion roubles. Now we are starting to see the initial effect of support measures in the agriculture sector, both for large enterprises and for small private farms.

A sum of around 50 billion roubles will be allocated under loan agreements already concluded for carrying out projects to establish and modernise livestock complexes. Loans for approximately another 50 billion roubles are in the process of being drawn up at the moment. This makes total loans of around 100 billion roubles for the agriculture sector. We expect that by the end of the year we will have exceeded the target figures in this area.

I note that three quarters of the selected projects are in the cattle industry – milk and meat production. Rosagroleasing has begun delivering pedigree cattle and equipment on a leasing basis. Around 13,000 head of cattle have been purchased and agreements have been concluded for 38,000 head of cattle.

Preferential loans for farmers, for people engaged in small-scale private agriculture production for retail and for the cooperatives they set up are in demand. This is a new kind of state support programme but we have already made loans of more than 7 billion roubles, which represents a third of the planned annual total, and the rate of issuing loans is continuing to accelerate. Now, just through Rosselkhozbank alone, we are issuing more than 3,000 loans a week.

The Presidium of the Council for the Implementation of the National Projects has taken the principled decision to examine the question of increasing state support. Vladimir Vladimirovich, we intend to put forward a proposal to allocate another 500 million roubles from the federal budget for this purpose this year and we ask for your support in this.

Vladimir Putin: We have discussed this question. Of course, you need to work with the Finance Ministry and with your other colleagues, but overall, the proposal is timely and justified and I hope that it will be carried out.

Dmitry Medvedev: We think that we can achieve more effective results in this area not just through increasing expenditure but also through making use of additional instruments. This is why we are working now on settling the problem of collateral guarantees for loans, because this is the main sticking point in the countryside, and we hope to expand the scope of use of these collateral guarantees and, in accordance with your instruction, to develop the banking infrastructure in rural areas. At the moment we have a situation where the old Soviet system has disintegrated, that is, where it actually existed in the first place, and a new infrastructure has not been built to take its place. Now we are working on creating this infrastructure.

Furthermore, we are completing work on amendments to the land laws. This work aims at making it a lot easier and cheaper to complete the process of registering plots of land, including agricultural land. This is one of the acute problems we need to settle today because the land is certainly out there, but we are not managing to put it to effective use and realise its investment potential. This is clearly due to the notoriously bureaucratic system and the high cost of registering plots of land. These are the main obstacles. A draft law in this area is ready for submission to the State Duma and we hope that the deputies will put it through its first reading before the current parliamentary session ends.

The next main area of work in this project is the development of agricultural cooperatives that would enable agricultural producers to organise normal processing of their products, which has always been a problem area, and thus compete more effectively on the market and earn more money. According to the information we have at our disposal, some 900 cooperatives have already been established as part of the project.

We should not forget that the Russian village has managed to preserve the tradition of large families. In spite of all the difficulties, there are 17–18 children for every ten families in rural areas, while there are only 12 children for every ten families in urban areas. This represents an important potential that we should make use of, including in resolving our demographic problems.

Another area of great importance in the rural areas is providing housing for young families and young higher education graduates. We have already issued the necessary acts in this area and the budget has set aside around 7 billion roubles to support housing provision this year for 16,000 young higher education graduates who are so desperately needed in the rural areas.

That then is an overview of the situation with the agriculture sector project.

Now I would like to say a few words about the system of support for the education sector. Federal budget expenditure for work carried out under this project has increased considerably, as can be seen by looking at the figures for this year.

At the same time, serious work is underway to develop a regional support mechanism that will encompass new systems of financing the education sector, increased wages for teachers and development of the equipment and technical base. Changes to the education sector, to the way education is funded in general and to our policy in this area must be directed at raising the quality of education and giving it an innovative character.

As part of the project work we have completed the selection of innovative higher education centres. We had practically a fifth of the country’s higher education establishments take part in the tender and the top 17 establishments were chosen. Total spending on development programmes for the selected establishments will come to 10 billion roubles over this year and next year. But our work in this area does not stop here and next year we hold further tenders.

Also as part of the project we are organising the selection of the best schoolteachers and the most progressive schools. The results of these competitions will be announced this autumn and the winning schools and teachers will receive premiums and grants.

It has been said on many occasions that educated people in the modern world need to know their way around the information space. We originally planned to develop the relevant education technology tools as part of the education project, but following discussion on the matter we decided to take this component further and set the goal of providing all schools with broadband access to electronic education systems within two years. In other words, all schools without exception that do not have Internet access today, and that is more than 50,000 institutions, will get this access and this will mean that every single Russian school will be connected to the Internet and thus will gain a ‘window on the world’. This will create at national level the necessary technical base for introducing new technology.

Now, coming to the Affordable Housing project, in particular regarding the issue of low-scale housing. Following the Council Presidium’s discussions, I reported that we had formulated some basic decisions that mean a certain amount of change to the work on the project.

What are these decisions?

Firstly, we have selected the regions in which low-scale housing pilot projects are being carried out. These regions take in all areas of the Russian Federation. Practical work will begin next month on these projects. We hope that we will get federal support in the form of state guarantees and compensation for interest rate expenses on loans for engineering infrastructure. All the necessary decisions have already been made.

Furthermore, in accordance with the Budget Address, we are examining the question of providing federal subsidies to develop the road network in new residential areas, including in areas of low-scale housing.

Secondly, three federal districts will carry out a comprehensive low-scale housing development experiment; and this on a large-scale basis. These plans include the creation of modern timber processing and housing construction facilities and comprehensive land development, including the construction of social infrastructure, because we can’t build housing without providing the things that go with it. If we just build houses but don’t pay attention to social services, we will end up with empty villages, empty settlements. We are also working on methods of developing low-scale housing construction within existing urban environments.

Thirdly, we are examining in parallel adjustments to the current legislation in order to encourage low-scale housing construction. Making this kind of housing genuinely affordable is of particular importance: it should be affordable for all groups of the population, for young families, for military servicemen and for other groups who acquire housing with the help of state subsidies.

Mortgage loans should become the main mechanism catering for the general public in acquiring housing, and the Affordable Housing project is based on their development. I note that work in this area is proceeding at quite a rapid pace overall and that so far this year mortgage loans totalling around 116 billion roubles if not more have already been made.

Another very important matter is that of making land available for housing construction. The problems in this area are well known: land allocated for housing construction often remains unused and often becomes the object of land speculation deals. In a number of cases the situation is simply intolerable, and you have also pointed this out, Vladimir Vladimirovich, on a number of occasions during our day to day work.

We have now formulated proposals for concrete steps in this area.

Our idea is first to settle through legislation the matter of maximum deadlines for concluding rental agreements for land reserved by municipalities through preliminary site development agreements. The idea is that if such agreements are not signed, the land in question then comes back onto the normal land market. We also propose looking at tax incentives to encourage the owners of sites to develop them rapidly and make it at the least disadvantageous to simply keep the land sitting idle.

Now for a few words on implementation of the Healthcare project. This is the costliest of our national projects. Overall, as you have already said, we are seeing an improvement in the human resources situation regarding general practitioners and local medical services. Over the last six months or even less, more than 3,500 doctors have begun work and around 2,000 medical school graduates plan to work in this area. This is something we also need to note.

When we plan these projects today our idea is that the payments made should boost the quality of medical care provided and not simply create better working conditions. We need to take into account the performance of healthcare personnel. This work has already begun and we are drawing up the relevant criteria and hope that these new procedures will be introduced in practice.

The next point we need to address is that of providing medical centres with diagnostic equipment and emergency services with ambulances. Through a process of tenders 2,200 more items of medical equipment were purchased than had been originally planned, and 660 more ambulances than had been planned. We therefore improved on the target figures we set for the tender process. Deliveries of medical equipment are now being made to 65 different regions and 11 regions have already begun receiving ambulances.

I must note that the regions are actively involved in preparing for commissioning and operating the new equipment. We have repeatedly drawn the regional leaders’ attention to the need to ensure that this work is carried out in more organised fashion so that the equipment delivered can be put to work immediately and not stand idle.

The mass vaccination campaign, which is also part of the national project, likewise calls for coordinated action between the regions and the federal authorities. The introduction of childbirth certificates is ensuring that doctors pay closer attention to the health of future mothers and is helping to better equip pregnancy centres and maternity homes and raise the wages of personnel. We can say now that since the childbirth certificates were introduced the standards of medical care have improved and a significant number of newborns were able to obtain the care they needed thanks to this childbirth certificate system.

In your Address [to the Federal Assembly] you noted, Vladimir Vladimirovich, the need to use this programme to help resolve the demographic problem. We expect that the draft budget for next year will allocate funds to increase the value of the childbirth certificates, as is shown also on this slide.

Concerning high-tech medical assistance, almost 30,000 people have received such medical care so far this year – half of last year’s total figure – so the results are not bad so far and we are progressing at a faster pace than planned.

In conclusion I would like to say that at the Council Presidium’s upcoming session we will conduct a comprehensive examination of the projects’ continued implementation and the financial backing for this work. The preparations have already begun and will be closely tied in to the budget formation process. Of course, there is a great deal still to do and our work has only just begun, but we will try to ensure quality in our work, make it effective and keep within deadlines.

Thank you.