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President of Russia Dmitry Medvedev: First of all, comrades, I would like to thank you all for your service, for the real work you have done, and for taking part in these strategic nuclear forces command exercises, Stability-2008.

It seems to me that you successfully fulfilled all your set tasks. Of course, this will all be gone through carefully and a separate report will be drawn up, but on first glance it seems that everything is absolutely in order. You have demonstrated a high level of coordination and combat skills. The objectives have been reached.

By the way, I would like to inform you all that part of the exercises involved launching a Sineva ballistic missile to test its range. The launch was successful and the missile travelled a distance of 11,547 kilometres. This is the best result yet achieved in tests of this ballistic missile and I congratulate all the participants in today’s exercises on this event. This is a good result and it shows that our Sineva ballistic missile has very good prospects.

Practically no other missile of this class has ever travelled such a distance. This is a good achievement. As far as the coordination between the different vessels and units goes, I would like to congratulate you all personally and thank you for your service.

Now we have a chance to talk and discuss the various issues of concern to all of you, officers, contract servicemen and those of you doing your compulsory military service. I am at your disposal and you can take this opportunity to ask questions, not only questions you prepared earlier, but any other matters you might want to ask too.

Please, go ahead.

Question: Comrade Commander in Chief, over these last few years our navy has become present again all around the world’s oceans and our vessels call in at many foreign ports. But the foreign currency allowances we receive when we go ashore have not increased from what it was in the 1980s-90s. In this situation it is hard not to feel…

Dmitry Medvedev: Hard not to feel like not going ashore at all? That’s understandable. What are the current allowances?

Reply: We get $1.5 each day for food and excursions, and 15 cents for entertainment. Of course, costs have long since gone up.

Dmitry Medvedev: Yes, costs never were at this level to begin with. You maybe don’t remember, but even back then it was impossible to do anything, to see anything, on $1.65 a day.

To answer your question, this situation is absolutely unacceptable of course, and we will revise these allowances. Anatoly Eduardovich [addressing Defence Minister Anatoly Serdyukov], you draw up proposals, because we are spending a lot more money on various other things, but we certainly need to put aside money for shore allowances for our ships’ crews too.

I am not sure what these allowances should be pegged to. You look into it and consult with the Finance Ministry. There should be some kind of correspondence with the scale of general civilian allowances that exists. Allowances should be decent enough so that our crews do not feel ashamed to go ashore in other countries.

Please, put your question.

Question: Comrade Commander in Chief, the cost of trips to military sanatoriums has gone up a lot lately and there are no preferential benefits for servicemen who spend long periods at sea and their families. Is this right?

Dmitry Medvedev: Thank you. I hope that some kind of benefits is available. I will discuss this further with the naval Commander in Chief and the Defence Minister. But whatever the event we will develop a system of benefits. What will this entail?

First, we will increase financing for part of the cost, so that servicemen and their families have the chance to receive these vouchers at preferential cost, using the coefficients that are affordable for servicemen and their families today. Second, we will expand the categories of people entitled to these vouchers for the sanatoriums. The Defence Minister has informed me that the principle now is that any serviceman who has been at sea should have the chance, and really the duty, to have a holiday. We will also expand the network of such sanatoriums.

Incidentally, I visited one of these sanatoriums during my visit of the Pacific Fleet. It restarted work only six months ago and now can be used for servicemen to restore their health after long periods at sea.

Finally, another opportunity that we should not overlook is that in a number of cases, when dealing with specialised sanatoriums, for example, or the need to travel somewhere in particular to restore one’s health, we can make the benefit available in the form of a cash payment for the serviceman and his family members. In other words, if the existing possibilities are not sufficient, we can use this cash payment form too. This gives us three different areas that we will work on and develop, including the system of benefits.

Question: Comrade Commander in Chief, the value of a square metre of housing space using housing purchase vouchers is 3–5 times lower than the market price. Will measures be taken to increase the value?

Dmitry Medvedev: Do you have one of these housing purchase vouchers or are you simply interested in general?

Reply: I’m interested in general.

Dmitry Medvedev: I understand. The issue of the housing purchase vouchers is well known and it is something that we have discussed many times during the different meetings I have held, including even those six months ago. The idea is simple: we bring the value of the housing purchase vouchers up to the market value. At the moment the vouchers have a lower value, although the difference is no longer as great as it was last year when Anatoly Eduardovich and I began working on this. Back then the difference could be as great as 20, 30 or 40 percent of the real market price. We will add some money to this scheme this year in order to bring the value per square metre closer in line with the real conditions in each specific location and the amount of the housing purchase voucher.

Given the various trends on the housing market, I think this process could go ahead ever faster than it has of late. The aim is simple: the housing purchase vouchers should be equivalent in value to the value of an apartment in a specific location.

This is something we will definitely do because it makes no sense to hand out vouchers that cannot be used to actually buy anything. So, this task will be fulfilled. We have long since set the common objective and taken the decisions on providing all officers with permanent housing by 2010 and service housing by 2012. These two goals will be achieved because this is part of the modernisation of the Armed Forces, modernisation of their image, that we are working on most actively. You know that, talking of modernisation, the ground forces held military exercises just recently. Today we are here as your guests and it is naval exercises that have just taken place.

We have two main goals. The first is to completely remodel our Armed Forces, develop new types of weapons and put them on combat duty so that they can be used in practical work. We will ensure the funds are available for this because it is extremely important for maintaining our Armed Forces’ combat readiness.

Our second goal, no less important but simply in a different area, is to ensure decent social conditions for our servicemen. This is a many-faceted task and it also includes wages, of course. You know that wages are due to increase as from January 1, 2009, for permanent combat ready units, and your ship is one of them. This will bring wages closer into line with the wages servicemen receive in other developed countries. Subsequently, all units will go over to this new scale of wages as they go over to permanent combat readiness in accordance with the programme we outlined and the decisions that I have approved as Commander in Chief.

The second component of the social package is housing, which we just spoke about. All the decisions regarding housing have already been taken. The main thing is to implement them on time and ensure a supply of quality housing. The housing that was made available 3–5 years ago was, unfortunately, Soviet-era small apartments, not very attractive and not very comfortable for living in. But we have already made all the agreements and taken all the decisions, and the housing being built now is all of a new kind. In the future we will continue to build housing using new technology.

Overall, of course, the social package should also cover another aspect of servicemen’s living environment, namely normal facilities and infrastructure in the military garrisons. These settlements should offer normal living conditions: schools, kindergartens – this is also very important and is something for which we need to make funds available.

So these are two plans that we have for the modernization of our Armed Forces and the Navy as well of course.

And now that we have got through the mandatory programme you can ask whatever want. As you think about what you want to ask let me say that I was very happy to tour around this aircraft carrier. Of course it makes a very powerful impression. I am here for the first time and this power is now felt everywhere. I will not speak in platitudes. We need to build new aircraft carriers. This is obviously the most important area for the future development of the Navy. This is how things are developing throughout the world: all major states with powerful defence systems and a powerful navy are doing this and we will also do so. Naturally this will not be completed in a year, but all necessary decisions on this subject will be taken.

Why do I say this? Because you serve in such a big house and you live here for a long time, away from home. Therefore it is certainly important that you benefit from normal living conditions. We went in and looked at the gym. The gym is normal, but still not ideal. Therefore I want to tell you that we will finish equipping the second part of the gym – the one underneath — with modern training equipment. If you need something else there tell me about it directly and we will do it.

Reply: Thank you.

Dmitry Medvedev: What else do you need there? Are there any ideas?

Of course you should have no doubt that the exercise machines we’ll install there will be absolutely modern and very comfortable. I myself use them a little bit so I will personally be involved in the selection. You should have no doubt that the machines will be good ones. You will all be able to go there – whoever wants to can go every day and work out everyday – and those who just want to build up their muscles a little bit can use it less.

But this is very important. Even though I already said to the Commander that simply walking around the cruiser is enough to feel like you get some exercise every day. 300 metres when you run from one side to the other, and you know that everything is fine.

Please, do you have any ideas or questions?

Go ahead, ask…

There are a lot of bosses.

Reply: We’re bothering them.

Dmitry Medvedev: Of course you are: they would ask me a question but they are afraid of you.

Reply: No, we are not that easily scared.

Dmitry Medvedev: Please, go ahead.

Question: Comrade Commander in Chief! You said that new aircraft-carrying ships will be built in Russia. And can you say approximately how long it will be before the first such ship, another beautiful aircraft carrier, will be assembled?

Dmitry Medvedev: That’s right: take the bull by the horns.

The question, in fact, is a very good one. We lost a lot in the 1990s – you are also well aware of this – and, unfortunately, did not build anything new. For that reason we now need to rebuild the very foundation of our fleet of aircraft cruisers and, in fact, the entire Navy because in addition to cruisers we also need more submarines. As a matter of fact, in the near future we will introduce two new ones and these will be very important events: Yuri Dolgoruky and Alexander Nevsky. Yuri Dolgoruky will be operational already very soon, as of next year. We are already running tests. Therefore we are rebuilding the submarine fleet.

But we absolutely need to restore the navy’s aircraft carriers – today we talked about this with the Commander in Chief– especially since without this the submarine fleet cannot perform all the tasks it needs to, especially given the fact that we have a vast country and we need to protect all its borders. Therefore I think that we will soon prepare a programme (in the form of instructions for the Ministry of Defence) to restore the aircraft carrier portion of the navy and identify places where new cruisers will be created. But this is not easy, because not all of our factories are ready to do this. Therefore we still have to determine where this will be done. In general, we do not have so many of these places, as you are well aware. We will think about how to organise this process in a rational way and will move to do so.

I think that in the next few years we will already make the first such decision on this matter. And we can also say that other decisions will be made even sooner. And as to the specific issues surrounding the creation of new ships, I think these will be addressed in the next year or two, but with the understanding that it might be better for us to create aircraft carriers even heavier than this class, as I understand it: is that right Vladimir Sergeevich?

Commander In Chief of the Russian Navy Admiral Vladimir Vysotsky: At least — nothing smaller than this.

Dmitry Medvedev: Nothing smaller than this. Such ships take five to seven years to create. Therefore the sooner we determine the production process, the quicker we will begin to build. Because if we speak frankly, for us now it is not a question of funds, even though there are certain crises in international financial markets, the question is rather where to build them, because unfortunately the country has become smaller and the opportunities available have also been reduced. But we will absolutely do this.

Therefore we need to count about five years after taking the decision. I think that we will have a normal result somewhere around 2013 to 2015.

How long did it take to build Admiral Kuznetsov?

Reply: It was started in 1982 and first went to sea in 1989.

Dmitry Medvedev: I mean how long was the actual construction phase? I thought it was three years.

Reply: A little more, it turned out there was a year interval. By that time stagnation had already gone.

Dmitry Medvedev: Yes, it was the 1980s after all. But in principle during the Soviet period, such ships (like the one we have here) were built in three or four years. Therefore I think that five years is a normal period. If we do this then of course we will do many things differently. It is clear that the power generating system should be nuclear. This will simply create other options: you who are in the military understand which ones. The electrical system should also be different. We are not going to talk about weapons because these things are classified, but of course they too must change. Although what we saw today, at the launch of the Sineva missiles, certainly represents an important improvement with regards to capacities. 11.5 thousand kilometers away — as I understand it nobody else has similar results measured by range.

Question: Comrade Commander in Chief! I am interested in whether the recruits in 2009 will have to serve a longer term or not?

Dmitry Medvedev: I see why you are asking this question. I have not made any decisions on this topic nor will I. We must now do everything we can to create a new image of the Armed Forces. We will wait and see what we do after a certain period, but right now we are not intending to lengthen anything. The decisions we took on how service will proceed will be the ones that are executed. The state cannot simply say one thing and then another. The length of service can change only in one situation and you know which one. Only if there is real fighting.

Let's have the last question.

Question: Comrade Commander in Chief, I was born in the city of Togliatti, a city whose development was driven by the Volga automobile plant, and wondered whether the domestic automobile industry has any future for?

Dmitry Medvedev: It is a good question, though a little off topic. Sit down please. I can tell you about my feelings on this subject because I started to think about it about 10 to 12 years ago. In the middle of the 1990s, I will tell you frankly, I had the feeling that our automobile industry had no future, because everyone began to buy — depending on their income — foreign cars and the products in our main enterprise in Togliatti looked worse and worse.

But events of the past 6 or 7 years have convinced me I was wrong. And precisely because consumption grew, people began to buy significantly more cars and already started to know what cars they needed. Now they don’t latch on to the first foreign brand. Our people want to buy cars that are suitable for our conditions, our long and, to say the least, imperfect roads. Of course they want to pay a normal price for a car because all the same the standard of living in Russia is not as high as we would like.

Therefore based on the rapid growth of automobile use and the decisions that were taken, I consider that Russia has the resources to develop its automobile industry and to create modern, good, functional automobiles for consumers, including in Togliatti. Therefore I am confident that if all goes well our automobile industry will revive, and we will work to make sure this comes about.

You can therefore safely return to Togliatti if you do not decide to serve in the military and start working. Everything will take off there.

Reply: Thank you.

Dmitry Medvedev: Well, so we talked about cars?

Once again I would like to thank you all for your service, for participating in the exercises. Good luck to you and all the best.

Question: A final one if possible: you participated in our exercises and led them: what evaluation did you give them?

Dmitry Medvedev: Excellent.

Reply: Thank you. We did not expect anything else.

Dmitry Medvedev: I actually did give you ‘excellent’.

You worked well. In fact everything that was planned was carried out. And that is not simply a required compliment because I came here as a guest. Actually, you did everything. This is of course particularly important because there is always a so-called ‘Commander Effect’. And the Supreme Commander does not come every time. But everything turned out well and I can honestly say that I am very happy about this.

Thank you.