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President of Russia Dmitry Medvedev: My first meeting following our long, ten-day holiday period is with you, the leader of our trade unions. All throughout last year, we worked quite energetically and harmoniously with the trade unions to reduce the negative effects of the financial crisis, first and foremost on the labour market.

We made a series of decisions. Naturally, some of them worked fine, while others were not as successful as we had expected. In any case, as I openly admitted during my recent interview with Russian national television channels, I anticipate that this year, unemployment will remain the most complicated social challenge facing our country.

I think that we should continue joint efforts aimed to reduce the strain on the labour market, which we saw growing at the year end. This may be accomplished through concerted action, amendments to the legislation, and implementation of various state programmes.

Though we have discussed this issue many times, I would now like to address it again, as for both the government and the trade unions this problem is most acute and complicated right now.

chairman of the Independent Trade Unions Federation Mikhail Shmakov: You are absolutely right.

I must say much was accomplished last year. Most of the government measures designed to ease the impact of this crisis on the labour market and on workforce were effective. It is certainly true that they did not result in a job increase in the country, as unfortunately many companies have been going through difficult times and last year they had to make layoffs. However, we also have positive examples where we were able to help prevent mass layoffs in many companies.

Regretfully, all economic theories state that after a crisis, the labour market is the last element of the economy to return to normal.

Dmitry Medvedev: Yes, it takes longer.

Mikhail Shmakov: Indeed. Now, we are seeing signs that the financial system is recovering and industrial production is returning to normal, but we are concerned that there may be no increase in new jobs in the next six months, because even reinvigorated industries need some time before new jobs can be created.

True, there are some general positive trends in the national economy, such as implementation of new technologies when following the crisis the companies stop employing outdated technologies. The newer technologies may result in fewer jobs, but we still have many jobs that require retrained employees – the very same workers who were laid off earlier and are now unemployed. Respective programmes have been introduced, and I think it is imperative to continue running them this year, or perhaps even to expand them.

We often discuss this at meetings of the Russian Tripartite Commission [for Regulation of Social and Labour Relations]. Unfortunately, our official registered unemployment figures for the end of last year and the beginning of this one are 2.05 million; furthermore, based on the International Labour Organisation’s methodology, our overall unemployment is 7.7 million. In this respect I would like to bring up again the issue I mentioned at our meeting last year, that of ratifying the International Labour Organisation Conventions, since the USSR did not ratify many of those conventions because the country had a different economy for which these conventions were rather irrelevant.

Dmitry Medvedev: Indeed, it was generally assumed that there was no unemployment whatsoever.

Mikhail Shmakov: Yes, that’s how it was back then. The economic views and approaches were different. Now, in a market economy, many International Labour Organisation Conventions are certainly more applicable in our everyday life. I believe their ratification should be accelerated.

Dmitry Medvedev: I should say you are absolutely right in describing the crisis mechanisms and in expecting the labour market to be the last element to return to normal. This is not just true in Russia, but in other nations as well. Still, this should not serve as an excuse for the nonfeasance by the Government, the trade unions, or the employers. No doubt, new jobs should be created more energetically.

I was insistently making this point to regional governors throughout last year. At every meeting with governors and heads of federal constituent entities, I always bring up two key issues: the region’s unemployment level and owed back pay.

Indeed, in many regions various sorts of new jobs were offered. In some places, this helped resolve the unemployment problems, and in other places, the efforts were less successful, but at the very least, the efforts helped to improve the situation somewhat. We therefore must methodically continue creating new jobs. Incidentally, in certain cases, we must not forget about public works, just as we discussed last year.

These works were not as widespread as we had hoped, but overall, they had a positive effect in a number of places. People were employed and they were paid while the authorities were able to pursue their economic objectives. Thus, I hope that we will really be able to regularly exchange information on this issue both within the framework of the Tripartite Commission [for Regulation of Social and Labour Relations] and during our routine consultations.

As for the [International Labour Organisation] Conventions, after we discussed this issue last time, all relevant instructions were given and now, the Cabinet is implementing them. I think that at least some of the Conventions may soon be ready for ratification. By the way, I signed several documents at the end of last year related to implementing international conventions on employment.

Mikhail Shmakov: Mr President, I would like to draw your attention to a certain problem. You were absolutely accurate in describing the owed back pay – which, incidentally, did not increase thanks to concerted efforts by trade unions and active involvement of the Prosecutor General’s Office and, in fact, in many cases, it was reduced, except in certain chronic cases which, unfortunately, we were not able to resolve last year.

Dmitry Medvedev: This situation is better than the one with regard to unemployment, as a direct result of the unrelenting efforts of the government, the trade unions, and law enforcement agencies. Indeed, nearly all corporate debts of businesses have been monitored, and in some cases, the owners of companies were simply obligated to pay the money to their employees.

Mikhail Shmakov: We are also setting a major goal for ourselves: not to allow pre-crisis conditions to be lost in the new labour contracts. When the crisis broke out, certain employers tried to cancel some of the conditions and guaranties set in labour contracts, but in most cases, we were able to prevent them from doing so.

Now, with an incipient recovery underway, we are setting the goal of not allowing conditions to deteriorate when it comes to collective agreements with companies. True, every entrepreneur is interested in reducing wages and labour costs. However, we do not believe that this is the path to be followed in the development of our economy, state and society.

Dmitry Medvedev: I agree.

Finally, I feel that the economic modernisation I declared last year and the course that we are now following should not result in fewer jobs; instead, it should lead to new jobs in high-tech industries. I think this is also one of the most significant challenges we are facing. We must either create new jobs at modernised companies or upgrade existing jobs to make them more productive and advanced and improve their overall status.

Mikhail Shmakov: This is the goal for the trade unions, too. We even have a national and international programme, Worthy Labour. First and foremost, it involves creating worthy jobs in high-tech industries that require good training and education while providing a good salary. In other words, all of these things are connected, and in this regard, we are all moving in the same direction.

Dmitry Medvedev: Well, let’s continue our efforts.