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President Vladimir Putin: Good day dear colleagues!

Our meeting and today's session will largely be devoted to results: we must not only evaluate the results of work on the national projects and on the demographic programme, but I also think that we need to talk about the gas supply in Russia, because this is directly related to the well-being of millions of our citizens. And today we also need to determine the key directions of our future long-term endeavours.

In fact, we need to answer a crucial question: how will the national projects be continued? We have just discussed this issue with Dmitry Anatolyevich Medvedev and with the leadership of the Presidential Executive Office. I would also like to hear the opinions of Council members on this issue. We need to first of all answer the question of how best to use the experience we gained from the national projects to implement a modern social policy, a policy founded on the promotion of human development, the creation of an innovation economy and the formation of a harmonious society.

I would stress that the reassessment of the content and priorities of state work is also a result of the national projects. Let us remember that until quite recently, not everyone fully understood the value of an effective social policy for the economy, society, and the country as a whole. Social policy used to be perceived as social security in the bleakest sense, and in comparison with attractive and interesting topics such as financial assets, exports of natural resources, oil and gas, social policy was unattractive and, therefore, left behind. Nevertheless, as I have already said more than once, social policy is the most important thing for all levels of government and administration.

What exactly are we referring to when we talk about the innovative development of the economy? Why are we talking about increasing the country's defence capabilities and developing a number of sectors of the economy? All of this does not make any sense if individual people do not feel the impact, and the impact is felt precisely through social policy: education, health, housing, and a normal social environment in agriculture. As we know, about 40 million people in the Russian Federation have profound links with agriculture. Russia is a country that lived through fundamental social changes and now has a new market economy, but the remnants of the Soviet social system have lasted for many years.

Many said correct things at meetings and called for action, many sitting in the right places applauded these sentiments, but for years people's lives and the Russian social sector did not change. Even at the beginning of the 21st century the mortality rate was significantly higher than the birth rate, schools and hospitals continued to deteriorate, and truly high-quality health care and education were only available to people with high incomes, and whoever had such means generally preferred to travel abroad for these services.

The influx of new staff into schools and clinics virtually stopped, the prospect of having computers and the Internet in schools remained a distant dream, especially in rural areas.

I repeat that this is not a snapshot of bygone days, but rather a short excursion into our recent past. In 2005 when we announced the national projects, for the first time in Russia's recent history we virtually declared that the individual is our most important asset and our main priority. And we didn't simply say it: we also confirmed this position through political will, and concentrated considerable financial, material and administrative resources to this end. I wish to draw your attention to the fact that we did this wisely, slowly, and by taking into consideration the macroeconomic implications of the decisions we took. Last year inflation in Russian went beyond the expected parameters, but this had no connection to the implementation of the national projects, because expenses in these areas were calculated and, I repeat once again, included in the macroeconomic development indicators. I will not go now into specific figures and measurements – I think we will hear about these in detail from Dmitry Anatolyevich Medvedev. We will hear reports from those responsible for each area of work.

I will simply say that the vast majority of the tasks set out in the projects have been completed. Moreover, the projects have acted as an important impetus for the development of other sectors: science, high-tech and, yes, for the entire economy. We were able to resolve a number of social and economic problems and to restore confidence in the government in the most fundamental areas. In any case, people saw that at least we started to do something in these areas.

Making social responsibility a part of public life and providing real support for such significant social undertakings was extremely important. I see our most important result in the fact that we have developed a modern project-oriented approach to public administration and budgetary planning. I consider that these mechanisms should continue to be used and developed. Now the main work must be done at the regional and municipal levels with, however, the most effective participation by the federal government.

Dmitry Anatolyevich and I just talked about this: if we dissolve our current structure, our Council for the Implementation of National Projects, and it ceases to exist, we will not be able to effectively influence these topics in the regions. Because — and the leaders of the regions are here with us today — in the regions there are always a lot of different problems: you need to build, upgrade, buy new equipment. We know what accompanies all these investments. And the most important thing, the most important thing and one that has always lacked funding is social policy. Without due attention from the federal government, without financial, administrative and political support, we cannot see these activities through.

Today, it is reasonable to argue that we selected the right goals two years ago, and that they should continue to be our long-term national priorities, in fact, part and parcel of our ideas for Russia's development between now and 2020. The government is now working out the practical details of this concept.

Overall, the focus should be on creating a modern social environment for the individual, one that works to improve his or her health, education, housing, working conditions, competitiveness and personal income. Now I would like to identify the key aspects of this policy.

First of all, we need new mechanisms to include the institutes of civil society, experts and professional communities in the process of creating social programmes, as well as in evaluating their effectiveness. In fact, already today we have to start implementing a public audit of all the decisions and actions of the authorities in the field of social policy.

Secondly, we need to create a viable competitive environment in the social sphere. Until the state is actually competing with itself, we will simply be going in circles or, in any event, there will be no competition.

It is time to increase the number of suppliers of social services: this will provide additional choices for individuals, will force public employees to do better, and give a new impetus to the development of small business and entrepreneurship.

Thirdly. A new social policy must be implemented on the basis of the latest innovative technologies. I draw your attention to the fact that I am not only referring to the re-equipment of educational facilities, medicine, construction, or work in the agricultural complex, but the main thing consists in new techniques and methods of implementing social policy. Today we need to introduce modern management approaches and to employ highly qualified, forward-looking managers.

Of course, all of those involved must be personally active and select professional teams to help them achieve their goals.

First Deputy Prime Minister Dmitry Medvedev: Dear Vladimir Vladimirovich! Dear members of the Council!

From the outset I would like to express my appreciation to all those who in recent years have worked to implement the national projects. And they would not have achieved the results the President just mentioned without the support of civil society and various political forces, the participation of the regions and municipalities, and the professionalism and initiative of our citizens. In fact, everyone is somehow affected by these national programmes: teachers, doctors, construction workers and our villagers. At the same time, work on the projects' implementation has been closely linked to achieving goals at every stage of their realization. Work on the projects and the monitoring system have been designed according to this scheme.

Today I would like to briefly talk about the key results of our joint work. First and foremost the average life expectancy is increasing and is now growing by more than a year every year. In two years, mortality fell by nearly 10 per cent, and according to preliminary estimates, mortality in the working-age population fell by 20 per cent compared with 2005, and the growth of the birth rate was nearly 10 per cent. Extensive programmes for preserving and bettering the population's health, programmes that cover most Russian citizens, were launched. Within the national project 13 million people were able to receive regular medical check-ups, and 60 million people were vaccinated. Infectious diseases were significantly reduced. More than 2,5 million women and newborns received quality medical care through the childbirth certificate progamme. In general, judging from the feedback we received, the programme for childbirth certificates proved one of the most successful.

New diagnostic equipment has reduced the waiting time in queues and improved the quality of examinations. More than 300,000 patients received high-tech medical care, a huge difference compared to the figure prior to the implementation of the national project. Primary health care has been significantly updated and retraining of medical personnel has been undertaken on a large-scale.

Additional support for the best specialists and educational institutions has become a major focus of the national project, Education. One third of teachers have received additional training, one out of every ten schools has received funds for the implementation of innovative programmes. These schools have become centres for the introduction of new educational technologies in their respective regions. The process of equipping schools with the Internet has been completed, and this already represents an obvious step towards creating a new educational environment, towards introducing modern methods of education. Today we are trying to support in every way those teachers who are implementing innovative programmes in their work.

To do so we set up a programme of grants and more than 20,000 of Russia's best teachers received these stipends. At the same time, we offered encouragement to the best students and almost 11,000 students received federal support. We created business schools that are developing in accordance with fundamentally new educational programmes, as well as federal universities that should ensure that the regions receive qualified personnel and new technologies.

Next. Over the last two years the average increase in housing levels was 18 percent. This is three times higher than what it was in 2005. I would note that in 2007 alone more than 710,000 apartments and individual houses were built in Russia. A mortgage programme for young families started operating in all Russian regions and can be used by many public sector employees as well. Overall, the share of transactions that use mortgage credits increased to 14 per cent of the total number of transactions that citizens make when purchasing housing. This is already a significant factor in resolving housing problems. In 2006–2007 1,200 settlements and 4,4 million apartments and homes received gas supplies, and 23,000 public utilities and 5,000 rural heating plants switched to natural gas.

The national project concerning the development of agriculture demonstrates the serious potential for growth in Russian rural areas. People are willing and able to work, update and expand production, introduce advanced technologies, and enter the market with competitive products. And they believe that they can trust government support.

Let me give you some figures here too: in 2007 the average wage in the agricultural sector rose by almost a third in comparison with the 25 per cent increase which we witnessed in other sectors. Wages in agriculture are now average for the economy. The number of profit-making enterprises increased from 58 per cent to 73 per cent, the levels of profitability from 7 to 15 per cent. Behind these rather boring figures lies a huge amount of work. All of this once again demonstrates that there are no unprofitable industries and sectors, there are only unproductive working methods, and a reluctance to engage with things that have suffered from serious neglect over time.

Dear members of the Council! As Vladimir Vladimirovich just mentioned, the national projects are not a one-time event, but rather part of long-term policy. Investing in people and in their education, health, and quality of life have become key concepts for the development of the country. And now we have arrived at a new social policy based on the national projects, a policy for developing human potential, and one that must uncover a wide range of equal opportunities for the self-realization for our citizens.

What are the main directions of these actions? Primarily, this consists in the care and support for our people. Already in the next three to four years it is necessary to first stabilize and then promote population growth. At the same time, we need to drastically reduce the mortality rates of working age people and create the conditions for a long and healthy life.

I would particularly note that life as a senior citizen and old age should cease to be synonymous with poor health and helplessness.

Modern and effective medicine in developed countries already allows people in older generations to live a fully active life, and we must do the same in Russia.

Another priority task is the significant decline in maternal and infant mortality. The childbirth certificate programme, early detection of disease, and the provision of high-tech medical care to newborns must develop further.

In the near future we will open 23 new perinatal centres.

In Russia the value of important concepts such as family and the family home are now being actively revived. The Year of the Family that the President of Russia announced is intended to draw attention to these issues, critical ones for our country. And we know that the Year of the Family is being held in the regions under the same slogans which were announced here. And the most important thing is that these events are being carried out on the basis of regional programmes that are being established in the regions themselves.

In this regard, we will continue to develop all forms of support for families with children, including by indexing benefits and maternity capital as well as by expanding the network of preschool facilities.

With regards to improving health care, we should act in three major areas. The first involves changing the system of financing medical facilities: an insurance policy should become a universal prerequisite for receiving medical services at any level, and therefore health insurance should be the principal source of financing for curative facilities or organizations. This would operate in a similar fashion to how the childbirth certificate functions today and I have already mentioned its success.

In order for this system to operate fully we must engage in a large amount of preparatory work, work which we have already started on a trial basis in a number of regions. This includes the adoption of health and economic standards, in other words defining clearly and unequivocally how much a given medical service or cure for a given disease costs. Accordingly, we must create programme backed by state guarantees and necessary funding. Ultimately, competition should be established among all forms of health care organizations. We must give people the right to choose the type of service and, accordingly, organization and medical staff they prefer – and give people the right to a decent wage that corresponds to the volume and quality of services rendered.

Secondly. We need to therefore engage in the training and retraining of medical personnel so that their skills correspond with the most recent requirements of modern medicine.

Third. We need to provide the technology necessary for the re-equipment of the industry, and not only through public funds, but also from extra-budgetary sources and private capital. And finally, we must not forget the delimitation of powers in this field.

I would like to pause on a number of other important aspects of medical care.

The availability of high-quality, specialized and high-tech medicine should not imply the construction of surgical centres in every village: this would simply be impossible. Rather, it means something else, namely that every person, regardless of his or her place of residence, may receive a given service and that they may choose a doctor themselves.

Next. Expensive equipment which we have quite actively installed in the regions should be put into operation instantlyand never stand idle. We must achieve full benefits from this equipment. And this equipment should also be replaced in due time because it has value only when it is consistent with the most contemporary medical ideas.

And there's more. Highly qualified specialists, surgeons and others should not carry out one operation per week: they must work as their foreign counterparts do and perform operations several times a day. At that point both wages and skill levels will change as well.

Finally, we need a large movement within society that advances the idea of a healthy lifestyle. Already from childhood people need to take on a responsible attitude to their health and learn how to confront risk factors such as alcohol abuse, drug use and smoking in schools. Obviously, simply focusing attention and resources on prevention activities as well as creating comfortable and safe living conditions will benefit human health. This is much more effective than spending tens of billions of rubles on treatment later.

It is absolutely necessary to revive the traditions of popular sports and physical culture. We plan to create the conditions for a significant increase in the number of citizens who engage in sports. Before 2015 no less than 4,000 sports facilities will be built in Russia, mainly in educational institutions and in places of residence. As such, people will engage in sports in halls, stadiums, in other sports complexes within a so-called walking distance. Today this work is proceeding quite rapidly and our regions are making a great contribution to this work.

Dear colleagues! Good quality education has always been the key to success and has a value in that it provides the foundation for subsequent career growth and raises living standards in the family. Education is also the basis for individual culture and the formation of a person's outlook for years to come. But in today's society there are new and fundamentally different requirements for education today. We must seriously, constantly and vigorously work on improving education and all its components, ranging from preschool to higher education.

In order to develop preschool education and to make it truly public, we need to separate the financing of educational services themselves from expenses for taking care of children. Only then will we be able to move forward as we should. Today far from all parents send their children to municipal preschool facilities. One third of all children are at home with their mothers or nannies, and others go to private nurseries and kindergartens. This is in no small part connected with the fact that in the 1990s they trampled over the system of preschool education and many regions saw their network of kindergartens and nurseries destroyed. But it is our constitutional duty to ensure that all children have the opportunity to receive free preschool education, and to have the opportunity to receive the kind of modern knowledge that any child of that age requires. This includes preparing children for school and for a rapid adaptation to their life at school. Certain regions have such experience and there is nothing too complicated here. We simply need to work at this issue consistently.

The next level of education is school. It gives people a knowledge base and ensures their wider upbringing. The foundations that are laid during this period of schooling and the way a person is brought up has an inordinately large influence on their subsequent life. In fact, the state has an immense responsibility with regards to any person's future development. Despite the fact that today school is a municipal entity, the state as a whole – that is, the federal centre, the regions, and the municipalities – bear full responsibility for policies in this field.

About vocational training and higher education. We must prepare personnel that are truly in demand. To do so we will strengthen cooperation with potential employers throughout the educational process and continue to support innovative educational institutions so that they might act as original points of growth. In addition, we will work towards strengthening the material and technical base of the entire educational process.

Another critical area concerns the integration of the educational environment and science. In 2009 5 billion rubles from the federal budget will be allocated to support no less than 50 networks of innovative programmes such as interuniversity programmes and those realised jointly by different universities, research organizations and enterprises. This is a continuation of the work that we have done over the past two years with grants which were allocated to our leading universities.

Just like in the health sector we need to seriously reconsider approaches to financing educational institutions, this must be done so that the amount of money received is closely linked to the level and quality of services provided. We need to introduce a modern system for the remuneration of teachers according to the same principles, ones focused on results. This is actually what we have recently done in programmes which were carried out in pilot and experimental regions and a number of other territories.

And in conclusion with regards to the approaches that should promote the general modernization of education, health care and the social sphere in general. Our education and health care must be open and responsive to individual requirements and those of society as a whole. And we must first of all establish an efficient and independent system for evaluating the quality of services provided. Together with the professional community and other social institutions we need to work out, implement and constantly develop new standards in education and health, and they should be based on the best examples we have today.

The President just said that we should develop real competition in the social sector, including through the creation of tax incentives for various types of organizations. It is obvious that such competition will enhance staff motivation and will help squeeze low-quality services out of the market. Creating just prices in the social sphere is intrinsically linked to this.

Now with regards to the tasks in the field of housing policy. Today we already have different housing requirements: we need new quality housing that is comfortable and economical. By increasing the volume of construction we must not harm the historic and architectural heritage of our cities and towns. In my opinion, in some municipalities we could even abandon building apartment blocks and, therefore, practically abandon the erection of prefabricated houses based on models from the 60s and 70s. We can do this if we build modern prefabricated houses.

We need to strive to ensure that many more people benefit from the opportunity to build their own homes on their own land. With our vast land resources this is absolutely realistic. But to achieve these goals we need to fundamentally change our approach to housing construction and the way construction is presently organized in Russia. Projects aimed at the comprehensive development of a given territory should have all the necessary infrastructure for human life, including social and transport infrastructure, and roads. In general it is time to complete this work on comprehensive projects for urban planning documentation, something we have been carrying it out for several years.

We will continue to provide federal support to regions and municipalities as they carry out programmes to develop engineering and municipal infrastructure. And if this infrastructure is built with funds from private investors then it can also belong to them.

It is very important to reduce to a minimum the number of mediation procedures in construction. It must be clearly understood that at the end of the day any existing obstacles will be paid from the pockets of those citizens who are receiving housing. In many cases, it is precisely as a result of such barriers that corruption develops.

I would draw special attention to the creation of favorable living conditions for people with disabilities. In Russia there are still many people with disabilities who are simply confined within four walls, and a normal doorstep or curbstone is an insurmountable obstacle for them. In this respect we need to change various rules of design, and these changes will already be approved this year. And, of course, we will deal with other pressing problems of people with disabilities.

As we build more and build better, we need to remain mindful of the availability of housing and pay more attention to the social aspects of housing policy. People on the waiting list and people who have low incomes must be offered various forms of public assistance, including grants, support for their participation in the housing construction cooperatives, targeted assistance to young families, and preferential mortgage programmes. Along with this we should take into consideration existing international experience in this sector, and not forget about other countries' negative experiences. For example, we need to think about how to strengthen and protect our mortgage system.

Dear colleagues! Our long-term priority must be the integrated development of rural areas, both with a view to realizing the unique capabilities of rural Russia, as well as improving the quality of life for those living there, particularly through the development of infrastructure, job creation, income growth and the increased efficiency of farms. The state programme to facilitate these tasks has already been adopted. Funding for these purposes from the federal and regional levels will exceed, let's calculate, one trillion rubles of public funds, and no less than 500 billion rubles will be invested in the sector in the form of direct private investment – this totals no less than one and a half trillion rubles.

We plan to work on increasing the efficiency of field use, the main asset of Russian agriculture. Here I consider the most important thing to be ensuring that each parcel of land has an effective owner. It is necessary to finally resolve all issues related to the rotation of agricultural lands, including issues of financial and organizational support to regions to improve the system of field ownership.

I would note that in the coming years the rates at which the agricultural industry is being re-equipped must increase. Agriculture will receive more productive and resource-saving technology. We must also continue to work on the quality of rural life: modern schools, medical and paramedical stations, and recreation centres, are all part and parcel of life in rural areas, and we are also obliged to work to improve them.

And finally, a few words about the gas supply in Russia. The availability of gas ensures a completely different quality of life and is an indispensable aspect of well-being. Today around 60 per cent of the country has access to gas supplies and in 2008 more than 400 settlements will have gas. Already in the foreseeable future we need to plan on providing gas supplies to all of Russia but, of course, where it is technically feasible and required. This is the most important social task that faces the country.

In conclusion, I would like to share some personal feelings, mainly concerning the feedback I have had from people about the effects of the implementation of the national projects. Vladimir Vladimirovich talked about this in his opening speech.

I am not going to deny that when the work had only just begun I often heard absolutely skeptical opinions: that these projects are simply populistic, a way to allow the situation to stabilise for a while, keep social policy afloat, or simply pre-election PR for the authorities. Today the situation is different, it even has a different emotional connotation. People have seen changes, perhaps not incredibly significant changes, but nevertheless real ones, and feel that as a result of work done in these areas, life has begun to change for the better.

I think that this level of confidence from Russian citizens brings with it a great deal of responsibility and will give us the real opportunity to do better. I am confident that by working together we will be able to satisfy all these expectations.

Thank you for your attention.