Official website of the President of Russia

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Economic Development and Trade Minister German Gref on macroeconomic results for the start of 2007

German Gref: We have examined the economic development results for the month of January.

Gross domestic product grew by 7.2 percentage points this January compared to the same month last year, and by 0.2 percent compared to December 2006.

Industrial output was up by 8.4 percentage points compared to January 2006. The results for individual sectors show a very interesting structure with natural resources extraction up 4.2 percentage points and the processing industry up 17.3 percentage points. This is not a typical result for January and it shows quite a positive trend. Electricity, gas and water production and distribution were all down by 10.5 percent in January because of the weather conditions.

Real incomes rose by 13 percent in January and real wages were up 17 percentage points.

Inflation in January came to 1.7 percentage points, which is 0.7 percentage points lower than the result for January 2006.

We also have the data now for the first 19 days of February. Inflation was at half a percentage point (as compared to 1.7 percentage points in Febraury 2006). The results for the first two months of this year thus show that inflation will be around 1.5 percentage points lower than it was for the same period last year.

President Vladimir Putin: This is not a bad start.

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First Deputy Prime Minister Sergei Ivanov on the meeting of the Unified Aircraft Manufacturing Corporation’s (OAK) board of directors, and on the meeting of the Military-Industrial Commission

Sergei Ivanov: Today I will be holding the second meeting of the United Aircraft Manufacturing Corporation’s board of directors. We will be examining how to organise the holding’s work to modernise our country’s aircraft manufacturing sector. The priorities on our agenda include planning the board of directors’ work for the year and organising financing for the corporation through loans and borrowing. Among the items on the agenda today are approving the corporation’s financial and economic plan for 2007, coordinating conditions for lending agreements between the corporation itself and its numerous subsidiaries, and also approving a credit agreement with Sberbank, which will be lending to the corporation. We will also examine the principles for forming the boards of directors of the corporation’s subsidiaries. I remind you that by this spring, we plan to complete the process of reorganising two big industrial firms – the MiG Corporation and the Kazan Aircraft Manufacturing Company – into joint-stock companies, after which the entire holding will be established as was outlined in your decree.

Tomorrow, the Military-Industrial Commission will meet, and for the second time in a row this meeting will take place not at the Government offices, but on-site, at one of the defence industry enterprises itself. Last time we held such a meeting, we examined the question of developing information systems for high-precision weapons. Tomorrow, we will hold our meeting at the Almaz Research and Production Enterprise, which is part of the Almaz-Antei Holding, and we will be examining air and missile defence systems.

I would just like to remind you that last year, we commissioned the new S-400 system. This year, the system will actually be deployed and will be combat-ready. This is a unique and very effective system – the only one of its kind in the world. But the main issue we will be looking at tomorrow is the prospects for developing fifth-generation air and missile defence systems that will combine air, missile and space defence in one system.

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Foreign Minister Sergei Lavrov on steps to resume negotiations with Iran

Sergei Lavrov: We held a meeting of the foreign ministers of Russia, the United States and Germany last week, with Javier Solana, representing the European Union, taking part as well. We discussed our next steps with regard to Iran and agreed to continue working together in the Security Council, which has just received the latest report from the International Atomic Energy Agency, and, in parallel, to continue working, with the IAEA management’s participation, with the Iranians to try to find a basis on which we can resume negotiations.

Today, in accordance with the agreement we reached at our meeting, the deputy foreign ministers of the six countries working with Iran, that is to say, with the United Kingdom, France, China, plus the European Union, taking part, are meeting in London to look for a solution that, using every possible lever, would enable a resumption of negotiations.

This is not an easy task because, on the one hand, the Iranian leadership has still not provided satisfactory answers to the International Atomic Energy Agency’s questions, and on the other hand, there are increasingly frequent and worrying predictions that air strikes will be launched against Iran. In particular, the U.S. Vice President recently mentioned such a possibility.

We will therefore act in accordance with the line that you have set, in accordance with your appeals to the Iranian leadership and with your contacts with the leaders of the six countries working with Iran, to do everything we can to find a diplomatic solution.

Vladimir Putin: What are we talking about here — strikes that do not have UN Security Council authorisation?

Sergei Lavrov: None of those who are talking about such a possibility have mentioned any such authorisation. While he was in Australia, the U.S. Vice President said just recently that he does not rule out such a possibility because Iran cannot be allowed to ignore the international community’s opinion.