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President of Russia Dmitry Medvedev: Colleagues,

I am pleased to have this opportunity to meet with you and hold this meeting on social and economic issues. I hope this will give us the chance to discuss the more important and relevant problems today.

I will not make lengthy opening remarks, all the more so as the problems are all well known. I was speaking just before with Mr Kanokov [President of Kabardino-Balkaria] about the development problems facing the North Caucasus and Kabardino-Balkaria in particular. We discussed the difficulties that last year brought, and also the steps forward that we have accomplished despite these problems, building new educational establishments and social and cultural facilities. The pace of development slowed down a little last year, but not disastrously, and we have made progress in some areas.

Some economic sectors have even shown better growth than before. We discussed just now development in the agriculture sector, in the country as a whole, and in Kabardino-Balkaria. This has been one sector that has demonstrated its competitiveness throughout the crisis period. This unquestionably offers opportunities for creating new jobs and developing new production that will generate profits and help us to resolve various problems.

We realise that the social and economic situation is problematic overall. This was why I decided to establish the North Caucasus Federal District. This meeting is attended for the first time by our new deputy prime minister and my plenipotentiary envoy, Mr Khloponin, who it is once again my pleasure to introduce. He is responsible for development in the Caucasus in general and for resolving a broad range of problems from social and economic to law enforcement and security. I hope that he will therefore be a frequent guest, and not just a guest but an active participant at all of the meetings and other events here.

We will now discuss the most important development aspects and perhaps identify areas of growth, something I think we need to do now, as we start emerging from the crisis.

I am pleased to see that not just the republic’s leadership but also municipal heads are at the meeting today. This is very important because you are in direct contact with the local residents. It is to you that they come with their grievances, and it is you who are at the forefront in resolving the most difficult problems that we face.

I will end my opening remarks here. Once again, I want to say what a pleasure it is to be here in Kabardino-Balkaria and have this chance to learn about what is happening in the republic today, and also about the problems that you and the other North Caucasus regions face.

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In the crisis situation, governments all around the world are getting more actively involved in economic projects. This does not mean that we should expand state participation in the economy infinitely. On the contrary, when the situation changes the state should reduce its involvement and private investors should get involved. In the current situation I think that public-private partnerships are justified. This is the guideline I have given to the new Deputy Prime Minister, who will be responsible for the North Caucasus.

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On the subject of credit histories and state guarantees, this is certainly one of the instruments that we can use, but we should remember that state guarantees are not a solution in themselves. One of the main problems we have faced of late, after all, is very high interest rates. What we need therefore is a comprehensive approach in the measures we take. In the case of some projects we probably need to look at subsidising interest rates, otherwise we might not get results even if we do provide state guarantees. You know yourselves just how sensitive these kinds of projects are to the cost of money.

Regarding the cardiology centre, as we agreed, I will issue the necessary instructions.

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There is another point I want to bring to your attention. We are talking today about big and important economic projects, but we must not lose sight of social issues too. We just visited a school, a good school, a new one. It is obviously a good thing to see that this new school has been built and that it provides children with decent conditions for education. I spoke with the teachers and they said that they are receiving their wages now. I had drawn this matter to the president’s [of the republic] attention, because, as you are well aware, there were problems with this at the start of the year, especially in the outlying districts. This problem has been settled now. Now that people are receiving their wages there can be no backsliding, no reduction of wages. This is a very sensitive matter, but if we take responsible steps forward we cannot go back on them, and I ask you all to remember this.

I support the idea of developing an educational cluster in the North Caucasus. It should include all kinds of educational establishments, starting with general educational schools, which need to be redesigned and receive new equipment. This work began under the national project and must continue now.

The next link in the chain is vocational schools. These establishments were all but forgotten in the 1990s, and the result was a shortage of qualified blue-collar workers. People in the North Caucasus are known for their love and ability to build things, and now there are new materials that workers simply must learn how to use. This is something that absolutely must receive attention. I call on the republic’s president and leadership, and the national government, to give this their attention.

The final link is universities. We have certainly had no shortage of universities over these last years given that all manner of dubious private establishments sprouted up all over the place. Unfortunately, rather than providing an education, these establishments often ended up causing all sorts of problems. This does not mean that we should now close down all of these establishments, but we need to reflect on their future, and the same goes for the establishments opened here in the North Caucasus, in Kabardino-Balkaria too.

How can we go about resolving this task? We need to develop big university centres. If all the preparations are made to develop such a centre in the North Caucasus Federal District, not on paper but in practice (incidentally, Mr Khloponin set up a similar kind of university centre back in Krasnoyarsk, and it was a success), I would be ready to support this project. But it has to be a university that really works, a university with professional lecturers and qualified professors, offering the kind of educational mobility that we discussed, bringing in teachers from other places, and providing decent conditions not just for teaching staff but also for the students. A university without sports facilities is already not a university. Driving through Nalchik earlier we saw that quite a large number of sports facilities are being built and this is very good to see. People may say that this is all a costly undertaking, but we cannot save money on our people’s health.

The second component is healthcare. Of course we need to pay attention to treatment centres, primary medical assistance and midwifery centres, and all sorts of out-patient facilities – all establishments that have undergone practically no development since Soviet times. This work also started under the national project. Some new equipment has been delivered, and I hope that it is installed and working now in the republic. But this is just the beginning. Of course, hospitals are also going to require a lot of attention. This is the most problematic component of the healthcare system, but we need to tackle these problems, work on optimising the number of beds and putting in place modern wage payment systems for medical personnel, just as for teachers.

On the subject of the rural areas, I remind everyone present, including the heads of the rural districts, that rural development is one of the biggest priorities here in Kabardino-Balkaria and in the North Caucasus in general. The cities have a high concentration of industry and big populations, while rural areas have traditionally received far less attention from the authorities. Their infrastructure is typically in a worse state and they also face bigger problems with unemployment, whether open or hidden. They have other problems too, which you all know well. Developing the rural areas and developing their agriculture businesses is therefore an absolutely top priority.

The last thing I want to say is that everyone has to take part in resolving the North Caucasus’ problems. I will hold several more meetings today. This cannot be the responsibility just of one deputy prime minister appointed specifically to this task; it is the entire Government’s responsibility. We cannot allow a situation in which a deputy prime minister is appointed and then everyone else simply washes their hands and says, “wonderful, someone has been put in charge, so we can relax and let them take care of everything”. Not even the best prepared and most qualified person can resolve all of the North Caucasus’ problems alone. Naturally, the Russian Federation Government is responsible for addressing these problems, and as far as law and order issues are concerned, this is the responsibility of our security and law enforcement agencies.

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I was very pleased to have had the chance to visit the school. We need to invest in this sector, build new schools.

We also need to revive village schools, small schools, because we cannot achieve development in the rural areas without them. They also need investment. Ideally, we need to build new schools, even if small ones. Those of our colleagues working on rural development know that if a village loses its school it starts to die. Rural schools are therefore a priority for preserving traditional ways of life and ensuring the survival and development of people in the countryside, and so I bring this issue of education to your attention once more.

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School meals are important too. Of course, living standards have clearly improved since the 1990s, but there are still low income families and we still need to provide schoolchildren with hot meals at the proper hours. This is a problem around the whole country and not a problem affecting just Kabardino-Balkaria or the North Caucasus as a whole. The situation is perhaps even slightly better here, but this is nonetheless an important matter that needs our attention.

Medical personnel in schools is another important matter, because, sadly, today’s children have poorer health than children in the past, and this is reflected in everything from general health statistics to our results in the Olympics.

Colleagues, I want to thank you for taking part in this meeting. We have another meeting today on law enforcement and security matters, and we will continue discussing the issues raised here. I wish you all success in the work you are doing. Until next time we meet.