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President Vladimir Putin: Good afternoon, dear colleagues,

As we agreed, we are here today to discuss the decisions needed to develop Russia’s shipbuilding industry.

This sector is underpinned by an extensive production and development base, genuinely cutting-edge technology and strong positions in certain segments, especially in military shipbuilding. But even so, this is far from sufficient to make the sector truly competitive over the coming years. We need to take action to help Russia’s shipbuilding industry enter new market niches. The Government recently discussed a development strategy for the industry for the period through to 2030, but the final decisions have yet to be taken.

The state is naturally interested in ensuring that the state arms procurement programme is completed in full, but from the point of view of our economic growth, it is no less important to develop the civilian shipbuilding sector and international cooperation.

Looking here at information I received from the Government, from the Industry and Energy Ministry, if we take the total tonnage of all the civilian ships built for Russian ship owners over the last ten years, 94.4 percent were built at foreign shipyards and only 5.6 percent at Russian shipyards. According to the ministry, Russia’s shipyards could have built 28 percent of this total at the very least. Why was this not the case? It was not the case because we have not put in place the necessary conditions for the industry’s development and did not react in time to events taking place in the Russian and world economies. Though, as I said, the industry does have a good base upon which to work and there are good examples of effective work.

One such example, an example of projects already underway, is the construction of platforms for developing off-shore oil and gas fields, and the construction of certain types of tanker. Given the growth prospects for the Russian energy sector, these sorts of projects could become key directions for the sector’s work and our manufacturers could occupy these and other niches. We have already talked about these possible niches – specialised vessels, ice-breaking vessels and so on – areas in which we have already got good work underway and have clear competitive advantages.

Competition on the world markets is extremely intense and we have practically no time left now for making decisions. I propose that we identify our strategy in at least two main areas today. First, we need to outline our policy principles, including on the formation of integrated structures that would be able to implement the state development strategy. Second, and just as important, we need to outline the structural state measures – tax procedures and tax measures – that we can use and that some countries are still making use of today. This also includes measures such as subsidies and loans, healthy protectionism, the sort of protective measures that would not undermine market mechanisms and competition in the sector, but would enable our shipbuilders to take the needed first steps towards strengthening their positions.