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Vladimir Putin:

Good day dear colleagues!

We meet regularly, this has now become a traditional meeting, designed to discuss many different aspects of public policy. Today I would like to begin with the results of the State Duma elections. You know the political landscape that emerged as a result of the expression of the will of the voters. I very much hope that the representatives of all parties in the lower house of parliament and the two chambers of the Federal Assembly will work constructively together in the coming years, just as they have in the previous ones.

At this point it is essential to ensure continuity in the course of the sustainable development of Russia, and to deliver on the election promises to Russian citizens. It is all the more important since the country has entered its second election campaign, this time for the President of the Russian Federation. It is natural that during this campaign priority attention will be paid to issues of social policy. This is especially true since an effective social policy – and the entire measure of the success of our activities – is judged by whether we satisfy the vital interests of Russian citizens. Along with this I would like to draw special attention to the fact that there is no room for populism in this work, nor for empty, shallow promises. For that reason I would ask you to act very realistically and responsibly when considering social issues, and to refrain from using unsecured ressources, something that is devastating for the budget.

Further. In recent years we have been able to achieve consistent growth for the incomes of Russian citizens, as well as improve benefits and pensions. This work is not proceeding without certain problems, nor without faults, but, nevertheless, the policy we have chosen is the right one and is producing results. When I speak about problems, I am not going to recall the sad facts of the previous years. Systemic problems also occur and I have in mind the Government's failure to retain inflation as it had planned. The consequences of this are not catastrophic but are nonetheless considerable, particularly in the social sphere, including the impact on the real income and material well-being of its citizens. I want to draw your attention to the fact that as a consequence we have witnessed a small reduction in the amounts of money placed in savings banks. (Just yesterday we were discussing this with economic officials in the Government.) People react immediately to these things: once inflation starts to affect the money in people’s pockets, they instantly start saving less. People react very quickly to this because they understand perfectly well what is happening. Let me repeat that this is not all that bad. We’re moving in the right direction, the macroeconomic indicators in general are strong, the economy is developing positively, and we can deal with these problems. All this is obvious, but we must proceed with great care. I mentioned inflation deliberately. It is easy to promise everything to everybody and even to deliver on such promises in a technical sense, but the result of such promises, if we don’t think everything through, can be the reverse of what we expect and have a real impact on the welfare of our citizens.

The next point is that in recent years economic indicators have consistently improved and business incomes have seen sustained growth. This is also a very important factor, which is in the final analysis has an effect on the nation’s prosperity. This is what gives us the opportunity to develop programmes such as demographics, housing, and sport for everyone, and to involve our citizens in the development of cultural and spiritual values. Overall, we really have embarked on a major investment in people.

Let me remind you that we are facing a very serious challenge: by 2020, we want to have one of the five largest economies in the world. We are absolutely capable of meeting this challenge, and we must. But being one of the top five is not an end in itself: we know that the state's capacity to deal with these social issues will depend on our economic growth. This means that to ensure this dynamic progress for Russia, we must now start to make the transfer to qualitatively new social policies, policies of social development.

What is involved here is much more comprehensive than just the payment of benefits and financing social institutions. We are talking about the formation of a modern social environment for the individual that actually enables him or her to improve their health, education, housing, working conditions, competitiveness and earnings. In the final analysis, this is about the development of the Russian people, not just maintaining the status quo but the development of the Russian people. For every person this means that he will be able to count on affordable and high-quality medical care; that he can get a decent education, one that will allow him to enter the professions and make a good living; and that he can unleash his creative potential and make a contribution to the cultural wealth of the nation.

We should actively encourage the introduction of mechanisms of state support and of financial instruments with which people will be able to buy or rent housing. Sport must be made accessible to everyone, all the more so because, as you know perfectly well, in 2014 we will be hosting the Olympics. This is a great opportunity for us to keep this idea of sport in the public consciousness.

Finally, the basis of any social policy must be an adequate level of income for people. In the coming years we need to eradicate poverty among pensioners, to raise the average pension above the subsistence minimum, and to bring the level of pay in the social sphere up to the average level of wages in each of the regions of the country. Of course, we should develop and aggressively support the family, motherhood and childhood. I deliberately mentioned the regions because the upper chamber represents the regions of the country. In any case, you are and must be in constant contact with the regions. I ask you to pay special attention to this aspect.

I believe it is important to focus on the following. First: we already have the experience of social sector development in the progress of working on the national projects. Dmitrii Anatolevich [Medvedev] will certainly have something to say about this today. He has been engaged in this work for several years now and I must say that it has been a success. In fact, he has developed a modern design approach for the effective management of resources, personnel and finance. I believe that this arrangement should be extensively used in the future. It makes sense not to phase out these national projects in the coming years but to transform them into state programs aimed at achieving specific, socially significant results.

Secondly: in the near future, we need to address in detail a system upgrade of social benefits for the full implementation of the principles of accessibility and quality in social services. This work must be done in a constant dialogue with civil society, business and professional communities.

Thirdly: we need to finally get rid of the hackneyed notion that the social sphere is the exclusive domain of the state. There are already examples where private business has been involved in the social sector's work, and the results have been better quality and reduced costs.

Ultimately, no matter where service is provided, in a public, private or municipal facility, the most important thing is the person’s ability to choose what suits him best. And the state should pay for the services provided the amount determined by government guarantees.

The involvement of business should facilitate the development of effective competition in the social sphere, which means a new system of remuneration to motivate workers to provide quality services to its citizens. In the social sphere, as in the economy, we must come to terms with the idea of a competition to better serve the consumer.

Incidentally, it is in the social sphere that there is huge potential for the development of small- and medium-sized businesses and the creation of thousands of new jobs. Therefore, you must reduce red tape in the social sphere and remove all sorts of administrative barriers, without adversely affecting those areas where state guarantees ensure the quality of services provided. The social sphere should consist of a committed partnership between the state, businesses and public institutions in the implementation of their joint programmes.

In concluding my opening remarks, I would like to point out that to make the system works on social fronts, we must meet a lot of regulatory challenges, at the federal and regional, and local levels. Of course here I am looking forward to the constructive work of the Federation Council and the Legislative Council, which Sergei Mikhailovich [Mironov] is heading.

Thank you for your attention. Let us go back to work.