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President Vladimir Putin: I would like to talk about tomorrow’s State Council meeting, since you head the working group.

Alexander Khloponin: We carried out a very in-depth analysis as part of the preparation for tomorrow’s meeting. More than 50 regional heads took an active part in this work. The subject matter is complex and quite new – approaches to strategies for social and economic development, particularly the regional aspect. The legal framework that we have in this area is based in large part on laws dating from 1995, on government resolutions, decisions and sector-based strategies. But though we have this framework we see very clearly that there is absolutely no link between the main sides with a stake in carrying out this strategy – the federal authorities, the regions, the big state corporations, private business and the public. This is what worries us the most at this point. Looking at strategies as they apply to the regions, it is not clear today what direction is being taken. The only example of a quality strategy with a regional aspect is Gazprom’s strategy for connecting the regions to the gas supply. But the Economic Development and Trade Ministry’s three-year strategy, for example, devotes just two pages out of a total 30 to the regional aspect. It is entirely unclear from this document what strategic directions the federal authorities are pursuing in the area of infrastructure development. We don’t know where the oil and gas pipelines will be laid, what capacity will be allocated, how much energy capacity will be available, where and how production resources and labour will be located.

But at the same time we are being told that the regions should plan their social and economic development strategies. So I write, for example, that I want to build the Bochuganskaya hydroelectric power station, but if I cannot find any interest at state level and my plan is not included in the state strategy, then the Bochuganskaya hydroelectric power station will not get built. That is one aspect.

A second aspect is that we have analysed the regional strategies of 250 private corporations and have come to a unique conclusion. There are investment projects worth a total of around $440 million in Siberia and the Far East today. Private business wants to invest, but the main problems in the way of carrying out projects are the lack of infrastructure, lack of roads, railway lines, energy capacity and so on.

Through our studies we have drawn three main conclusions.

We need to adopt a federal law that will above all clarify the definitions. Everybody is speaking different languages today and interprets terms such as ‘strategy’, ‘concept’ and ‘forecast’ as they see fit, shaping them to their own needs. The need for clear definitions is particularly important in a federation such as ours where there is a division of powers between the federal and regional authorities. This is a big country and each part of the country – the European part, Siberia, the Far East – should have its own specific development situation, its own guidelines. It is clear, for example, that we cannot develop the car-making industry in Siberia because we are too far away from sales markets, but it is equally clear that Siberia is a valuable source of energy resources, raw materials and high technology. Siberia also offers opportunities for developing mainline transport routes. And we need to plan our labour resources accordingly.

The need to develop a regional strategy based on a federal strategy is a key task today. We have examined Western experience and have also looked at how things were done during the Soviet years. Of course, it makes no sense now to go back to command methods because life has changed and so have our objectives. The United States has a strategic planning committee that coordinates the regional strategies so that they link up. They must take three main aspects into account – social justice, political stability and, most importantly, economic efficiency. Working through investment mechanisms, the state fine tunes individual regions and territories in accordance with these strategies. Then people start to move to where jobs are being created, and those who remain also have normal conditions. In developing regions investment comes through investment fund mechanisms and investment projects.

We have drawn up proposals in all these areas and will present them at the State Council meeting tomorrow.