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Prime Minister Vladimir Putin addressed the 11th Congress of the United Russia party
Esteemed Mr Dmitry Medvedev, esteemed Mr Boris Gryzlov, fellow party members and guests:
Among those present are 36 foreign delegations. Let us greet them too. Thank you.
During the past year we have all gone through serious trials and have withstood a tough, hardening test.
As you may remember the situation was very tense and nervous, I would say, complicated. At the time the crisis was gathering momentum. The number of uncertainties in the world economy was rapidly multiplying. There was a surfeit of gloomy forecasts.
United Russia declared that it was assuming political responsibility for combating the crisis. We promised to do everything to prevent a recurrence, in our country, of the collapse of 1991 and 1998.
Yes, there are still many problems. But today we can confidently say we have kept that promise.
We have kept our promise. We kept the economy under control and the banking system stable; we shielded them, like the social services, from destructive shocks.
The banks continued to facilitate settlements between enterprises, no financial clogs or "epidemics" with debt arrears occurred.
Of course, at the height of the crisis, interest rates on loans became fairly high, sometimes even prohibitive, one has to admit it. They are still very high, but they are in a downward trend. The banks are again vying for clients. Such competition is a sure sign that the credit system is recovering.
We have supported the real economy by increasing Government demand, subsidising interest rates, in some cases by buying into the capital of enterprises, and by Government guarantees on loans.
It has to be admitted - in general we should be self-critical with regard to what we do - in this case one has to admit that at the first stage, the state loan guarantee measure was not effective enough. So we had to adjust that mechanism.
The Government guarantee programme will be fulfilled by the end of the year. I think it will be completed in full, to an amount of 300 billion roubles, just as planned. We will continue the programme in 2010 when more than 500 billion roubles worth of credit will be made available to enterprises.
We are watching the situation in the single-industry cities. We have put in place a system of quick response for the more difficult situations; we have tackled the problems as they arose literally in manual control mode - surely not the best approach, but there is no other option in this situation.
Needless to say, financial rehabilitation procedures were used throughout the country. That is a proper and necessary tool. However, I would like to stress that not a single systemically important enterprise went bankrupt.
Those who lost their jobs received help. All those who wished to avail themselves of employment programmes were able to do so.
Of course temporary jobs and public works do not require high skills, nor do they bring great income. That goes without saying. Our aim in this event was much more modest, but no less relevant: to provide temporary relief to someone who has found himself in a difficult situation.
We had promised to safeguard our people's savings. We did not allow the degradation of social services. Today one can safely say that our people have not lost their bank savings because of the crisis. The national currency has stabilised; the rouble has grown stronger and continues to grow stronger.
We have supported those who faced problems with paying their mortgages. A deferment was granted to those who had lost their jobs or part of their earnings. People were also allowed to use the so-called maternity capital ahead of the prescribed time. More than 80,000 people availed themselves of this opportunity.
As a result our citizens, with rare exceptions, managed to keep the flats they had bought on credit. In some cases people have probably lost their property. However, unlike in some other countries, this did not happen on a massive scale. That is a fact.
We could not of course help all the students at private higher education institutions. The commercial segment in our education system has grown substantially during the past decade. However, the best students were able to transfer to publicly supported institutions and study free of charge. This number is not large, of course. It is pity. One wishes it were larger.
We promised that we would not allow the global crisis to demoralise our society, and we have managed to uphold the main social gains of recent years.
Perhaps the best indicator of how the nation feels is demographics. This is a litmus test of the state of society.
January through September 2009, 1,321,000 children were born in Russia, 3.7% more than last year. The death rate has dropped by 4.2%.
To be sure, it is too soon to speak about results, which are still modest. But the dynamics we have witnessed recently makes it safe to say that as many people will celebrate the new year in 2010 in our country as on January 1, 2009.
By way of comparison, during the 1998-1999 crisis the birth rate dropped by 5.5%, while the death rate, on the contrary, spiked by 8%.
Much of the credit for what we have managed to accomplish during this year must be attributed to the mood of the Russian people, their confidence in what we have been doing. That is very important. A great Thank You is due to our people for their confidence.
I am sure that we would not have been able to act as resolutely and promptly if we did not have a solid majority in the federal parliament and in the regional parliaments, if the Government did not lean on such a powerful and effective force as United Russia.
There is no doubt in my mind, I know and I am confident that all the political forces in the country, all our parties represented in parliament, and all the active political parties that have come up with suggestions, genuinely wish things to be better, for Russians to live better, for people to be wealthier and for the economy to develop faster. Everybody wants that.
Esteemed participants in the Congress,
The country's economy is showing early signs of recovery.
Nevertheless it is too early to say the crisis is over. Difficulties, serious difficulties, persist in a number of areas.
At the end of the year the GDP has not dropped as much as we had expected. We were predicting about 10%, perhaps even more. Actually, it will be less, around 8% or 8.5%. Yet even that is too much, more than in some other countries.
Judging from current trends, the inflation rate in 2009 will drop substantially and that of course is a plus. While in 2008 inflation ran at 13.3%, by the end of this year it will be in the neighbourhood of 9.6%, in any case certainly less than 10%, which is among the positive indicators since 1992.
Even so, 9% and 10% is still a lot, inadmissibly so. That is why a tough anti-inflationary policy will continue.
The crisis has not prevented us from paying regularly and even increasing the pensions, benefits and public sector wages. I would like to remind you that the wage fund in the federal public sector was increased by 30% as of December 1, 2008. In fact the main effect of that measure only kicked in for 2009.
Nevertheless, one has to be frank, and in general one should always conduct dialogue with the people, with society honestly, in this case we must admit that on the whole real income in the country has dropped.
We should do everything we can to change the situation as soon as possible. Of course we could not help everyone who experienced the impact of the crisis. That was objectively impossible.
However, we should always think about those who found themselves in a difficult and complicated situation, who have not yet received or have not sensed the assistance on the part of the state.
We have no right to forget the people who expect us to help them and we must do everything to make that help more effective.
I have to tell you that I am personally very aware of this responsibility and I want it to be transmitted to all those sitting in this hall, all the members of our party, all the people who, in these hard times, have assumed the responsibility for the destiny of their country.
Let me stress that the end of the recession does not mean that the problems we have faced will automatically go away.
So we will continue implementing targeted measures aimed at further reconstruction and post-crisis development of the economy. We propose to concentrate on the following key areas:
First, we must ensure the stable operation of systemically important enterprises, driving forward the programmes of their technical renewal and modernisation.
Second, stimulate hi-tech exports.
Third, develop housing construction.
Fourth, support internal demand, including the most important and embattled industry, the automobile industry.
And of course, there is the challenge of unemployment and the problems of single-industry cities.
Unemployment in Russia has been declining for several months: from 7.1 million in February to 6 million in October. However, the situation in the labour market is still strained. Seasonal trends are also a factor.
You may have noticed that unemployment inched up again in October. I hope this does not set a trend. Overall, unemployment is dropping. So next year we will allocate 36 billion roubles for employment programmes, that is a little less than in 2009 - 43.4 billion, but it is still a sizable sum.
Finally, the budget stipulates an anti-crisis fund of 195 billion roubles which, if necessary, will be used to react promptly to possible problems. In other words, we have an additional "safety cushion" against an extreme situation, if some unexpected problems crop up.
I will dwell in more detail on some of the above mentioned areas of effort.
But first I would like to say that in the next two or three years we will not only have to fully restore the economy to pre-crisis levels, that of course is a must. Similarly, we must restore the incomes of our population. But it is far more important to achieve qualitative changes.
The existing model of development, which hinges on high commodity prices and cheap credit from foreign financial institutions, is a model which worked in its time and helped us to solve some important problems.
We restored the economy, substantially increased the living standards of millions of people and put an end to mass poverty. We have managed to accumulate resources to boost key social services such as education, healthcare and local sports. And also to revive the national culture which of course deserves more attention than we have been giving it.
However, it was clear even before the crisis that the old growth drivers had practically exhausted themselves. We repeatedly spoke about it, and we put it in the Concept of the country's development until 2020 and the programmatic documents of the United Russia Party.
The crisis has also served as a stark reminder of the cost to the country of rejecting innovation and of low labour productivity, wasteful use of resources, and a hidebound and slow moving bureaucracy.
In his Address to the Federal Assembly the President of the Russian Federation, Dmitry Medvedev, urged the need for all-round modernisation. He identified five key areas...
He identified one task to overcome a chronic backwardness and take the country to a new and higher level of development.
I am sure this appeal reflects the mood of all of Russian society. People's desire to have broad opportunities to fulfil themselves, to secure their children's future, their desire to live in a prosperous and successful country that occupies a worthy place among advanced states.
Let me be clear: the tasks facing us today are difficult, but I think they are absolutely realistic and feasible.
Dear colleagues, in order to move forward we must clean up the economy of hopelessly outdated and wasteful production facilities, identify and support a genuinely competitive nucleus in the real sector of the economy. We have such a nucleus.
Yes, it often involves fairly painful processes, but if we want to live on revenues from a modern economy and not subsist on rent from raw materials there is no other option.
We should come to terms with the premise that the key factors of development in the coming years will be internal resources: the optimisation and retrofitting of industry, increasing labour productivity and an effective employment structure.
Infrastructure monopolies and major companies with government participation must adopt internal programmes aimed at achieving an international level of efficiency and standards of transparency that shed the risk of corruption.
These are the issues which government representatives in the management of these companies must come to grips with.
It is time for business to start working in a different way. Unfortunately, many are used to following a simple rule of thumb: squeeze everything out of outdated equipment and incur debt in the hope that the government will come to the rescue and eventually pull them out of this pit. This mentality - the mentality of time-servers - is not one that can build a modern economy.
At the legislative level it is necessary to formulate requirements that would induce business to seek to improve its effectiveness day in and day out.
The parliament, with your participation, has already passed a law on energy saving. It contains a range of stimuli to introduce new resource-saving technologies and modern equipment.
Additionally, the new technical regulations are aimed at making our companies more competitive. They should be introduced in most all sectors of industry.
Construction norms and standards need to be updated very soon. We cannot afford to carry out multibillion rouble infrastructure projects based on 1970s standards which are unreasonably costly. That amounts to squandering resources.
In addition, to save money and do away with corruption it is necessary to introduce electronic tenders in concluding state contracts for infrastructure development. Objectively, we are prepared for it; there is nothing that stands in the way. All we need to do is to do it. Some regions are already doing it: in Tatarstan Sberbank is doing it and Moscow is doing it. We should move forward more vigorously. We must get it done.
A new programme to promote competition was adopted in 2009. We have seriously renewed antimonopoly legislation, tightened sanctions for wilful and deliberate violation of the law. And cartel collusion is now a crime. You know that this law had a rough go of it. I very much hope that it will work and will become an important instrument in combating unjustified price growth.
Why is a healthy competitive environment so important for the development and modernisation of the economy? Because in open and honest competition in the market the enterprises that are really the strongest and the most advanced should win. They should win through the introduction of innovation and effective management and not through collusion, behind-the-scenes lobbying or bureaucratic patronage.
If this situation persists, those who introduce innovation will remain in the shadow and will not benefit from their innovations. This cannot be allowed on any account.
The crisis has highlighted the need for profound modernisation of all industries, the prospects of many companies, including those that are systemic for the Russian economy.
I would like to stress that the past achievements and services of enterprises cannot in and of themselves provide grounds to seek government assistance. One cannot encourage a free-ride attitude, perpetuate technical and managerial backwardness.
Hundreds of companies during the past year have shown and proved that they are capable of growing in the most difficult conditions, coping with current problems, and that they have coherent modernisation plans. You know, I have seen many such companies during the past year. Sometimes I couldn't help wondering how people achieved such excellent results in difficult financial conditions. These are the people who need to be helped in the first place.
One serious task is stimulating domestic demand as well as providing assistance to our producers in breaking into foreign markets.
We intend to pay close attention to import replacement. This is not an end in itself and not a cure-all. First of all, of course, it is necessary to do it in those sectors which essentially ensure the country's security and also those in which we have competitive advantages. I am talking about microelectronics, pharmaceutics, machine-building, the light and wood-working industries and some other industries. This calls for a whole range of measures. What measures?
First, competent customs and tariff regulations and - let me stress it, I have spoken about it more than once -- putting customs in order. We cannot tolerate contraband or faked copies that occupy nearly 40% of the light industry market. I am often told: "look, the same is done in other countries and in Europe." Yes, that is so. But this is not an example to be followed.
Second, new technical regulations and effective monitoring must protect our citizens from inferior goods.
Third. We should fully use anti-dumping procedures to prevent unfair competition on the part of our foreign partners.
Fourth. As part of anti-crisis measures we will continue to support enterprises. We will subsidise interest rates on credit and, as I have said, improve the production infrastructure.
Next. Further development of special economic zones and the creation of regional industrial parks. Positive examples exist: Tatarstan, Kaluga Region and other regions of the Russian Federation.
And finally it is necessary to change the system of government procurement in order to provide real assistance to Russian producers by increasing government demand and with government money. Of course it goes without saying that the principles of competition should be observed and price growth should be prevented. That can be done.
I would like to stress that our aim is not to artificially close the market, of course not, that would hurt the Russian consumer the most. To the contrary, our aim is to create conditions in which genuinely competitive industries spring up that produce quality goods for which there is demand.
Now regarding the promotion of domestic products in foreign markets. Next year we will spend about 60 billion roubles (over $2 billion at the current exchange rate) to support hi-tech exports through state guarantees. Another 3 billion roubles will go to subsidise interest rates on export credit. And finally, a government agency for insuring foreign trade contracts will be created. We plan to finance it to the tune of 13 billion roubles.
The Customs Union of Russia, Belarus and Kazakhstan will be in effect on January 1, 2010, opening up new opportunities, new markets for business and producers from the participating countries.
Our agenda includes forming a common economic space together with our partners, with free movement of goods, capital, services, labour, a space that has a huge growth potential.
We welcome foreign capital investment in our science-intensive sectors. In turn, we will promote Russian investment abroad, including the purchase of high technology foreign assets.
We seek open and equal partnerships so that the mutual exchange of technology can proceed naturally and to mutual benefit.
In giving pride of place to the task of greater effectiveness we should pay particular attention to the spheres in which Russia has been the leader and where we can build on the powerful achievements of previous decades.
In 2010 civilian space programmes will be financed with more than 100 billion roubles, the nuclear industry, 96 billion roubles and aviation, 22 billion roubles. All in all more than 400 billion roubles will go into hi-tech industries.
You will see that next year's budget already shifts the emphasis noticeably in the direction of modernisation projects. We intend to follow this line steadfastly in the future and to make active use of development institutions' resources.
Science and education are among our undoubted priorities.
Unfortunately, we have to admit that even major universities and research centres in our country still lag behind world leaders in terms of equipment. Serious results in research, breakthroughs, including the development of new equipment, have been achieved, but so far they are few and far between.
We have already embarked on a systematic effort to modernise science, including at higher education institutions. In this we will support and strengthen all that is the best and most advanced. The Government recently approved five-year programmes that would create 14 research universities. They will be financed with approximately 50 billion roubles, with at least half of the money to be disbursed from the Federal Budget.
After assessing the available resources we came to the conclusion, very recently, just two or three days ago, that some additional steps need to be taken.
Therefore I propose to direct over the next three years a further 90 billion roubles to support the country's leading universities (30 billion roubles every year).
That money will be spent to renovate the research and laboratory base, the programme of scientific exchange, to bring the best scientists from abroad, including our fellow countrymen who are currently working elsewhere. This is an additional challenge for the Ministry of Science and Education: the procedure of financing must be worked out and the research and educational institutions must be selected.
As a result such universities should move to advanced standing in world education and science ratings and become an important element in the national innovation system.
We will also continue working to create powerful competitive research centres. One such centre was recently formed on the basis of the Kurchatov Institute. I believe it is possible within the next three years to allocate an additional 10 billion roubles for its development so that the centre can receive not only organisational and administrative assistance but also financial aid from the state.
Traditionally the defence industry complex has been one of the drivers of technological progress in Russia. That role should be greatly strengthened and Russia should be guaranteed independent access to critically important defence technology.
The Government has identified support of the defence industry complex as a key element among anti-crisis measures. The steps that have been taken have proven effective. I mentioned the overall slump in the economy, which is regrettable, but the defence industry has registered a growth of about 4% during the year. This is the result of Government support more than anything else.
In 2010 the state defence order will be increased by another 8.4% to 1.175 trillion roubles.
I will not review the quantitative parameters of arms procurement for the needs of the armed forces and navy. I would like to mention something else. I believe that the increased defence order is a key tool in the modernisation of the defence industry complex and also of related industries, a stimulus for forward-looking scientific development and the production of new materials and components.
Much has been done in recent years to rebuild the defence industry. Large integrated holding companies have been created.
We now have to move forward.
Among other things, we should systematically work to prepare personnel for the defence industry. I mean engineers capable of creating advanced products and managers who can competently organise the financial and economic activities of enterprises. We cannot, as in former decades, keep huge production facilities heated, maintain useless infrastructure and cling tenaciously to everything that drags the enterprise down. That is not right, that is not efficient.
The defence industry must at long last learn to work in a competitive environment, get rid of uncomfortable and unnecessary assets, non-core assets, push ahead with modernisation and dramatically improve the quality and durability of their products.
Our steps to restore the auto industry merit particular attention. The fall in demand in this sector has been the most dramatic, not only here, but all over the world. We are not an exception. The drop in demand has been great and of course it has affected production. The production of cars here has dropped by more than 60%. That is why anti-crisis measures in this sector should not only be preserved, but expanded.
In addition to subsidising car loans, purchase of vehicles for federal and municipal needs - let me remind you that in 2009 we have earmarked 12.5 billion to buy vehicles for government needs, and then added another 3 billion and then allocated 25 billion more for municipal needs. We will continue these programmes in 2010, but we will launch another programme, a programme of used car trade-ins.
Any citizen who takes a car older than 10 years to a junk yard will get a check for 50,000 roubles to use in the purchase of a new car.
It won't matter if he buys a Russian-made or a foreign-made car as long as it is assembled in Russia.
People often ask questions about the spearhead engineering and car-making concerns, such as KAMAZ and VAZ. You know that I, and many of my colleagues, regularly visit these enterprises, meet with their workers, the trade unions, the management of the enterprises and the regions.
Regarding KAMAZ, its management admits that it survived 2009 due solely to Government support. But I hope that next year the market will start recovering and things will be easier for them.
VAZ is in a more difficult situation. It has already received massive assistance. I am confident that given profound modernisation, the company still has a future. We would be willing to clear up its debt and solve the social problems and employment issues.
We will work with all the shareholders of AVTOVAZ, including foreign investors. We hope that they will come up with a realistic strategy for the development of the enterprise on a state-of-the-art platform and will treat with a sense of responsibility not only the fate of the enterprise but also its employees.
Apart from everything else, Tolyatti will be the first city where pilot projects of comprehensive development of single-industry cities will begin. We are talking about a new infrastructure, roads, land for new production facilities, industrial parks and business incubators.
However these projects will only be truly successful if the regions, the municipalities and the business communities take an active part in them along with the Federal Government.
I suggest that the development of single-industry cities be included in the list of priority projects of United Russia.
These are the most complex problems, the most sensitive and challenging. So, this is a serious task that must be attended to effectively.
I would like to mention another sector which is of prime importance. It engages millions of people and meets vital needs for the country and its citizens. That sector is agriculture.
Because we have shifted our focus to hi-tech enterprises, the creation of modern farms and agricultural enterprises, the agro-industrial complex in the country has been fairly stable even in the context of the crisis.
It has hardly experienced a decline. Indeed, Russian agricultural produce has strengthened its position both in the domestic and foreign markets. We will continue to pay close attention to the development of the agro-industrial complex and rural territories.
You know, frankly, I had my doubts when we were investing huge amounts of money in that sector of the economy. But when you look at some of the enterprises you feel like saying, thank you to those who accomplished it all, it makes you feel good. I have flown over the Belgorod Region and from above you see only new roofs. When you look at the inside you find modern equipment and technology, management, young and efficient people. It's great.
The crisis temporarily eased the load on our transport, roads and the power industry. However, infrastructure problems, the bottleneck of the economy, still exist. They are still the ultimate cause of huge costs and direct losses, the high price of domestic products and overall economic inefficiency.
One should also bear in mind that beginning from 2010 the freight traffic volumes and demand for electricity will start growing again. They are already growing. There are heads of companies here, and they reported to me just recently that growth is resuming little by little.
So we will work to ensure that investors meet their commitments to build new electric power plants and generators. About 20 GW of generating capacity is to be launched before 2012. That is roughly the same amount as in the previous 10 years. And of course the Sayano-Shushenskaya Hydroelectric Power Plant must be fully restored.
Road construction, modernisation of airports and sea and river ports remain priorities. Thus, we will spend 324 billion roubles on roads in 2010, including budget credit. That is a little less than in 2009. But you have to bear in mind that in 2009 part of the allocations were made in the form of anti-crisis measures. But in 2010 more will be spent to build roads than in a stronger 2008. It is not a bad indicator.
Let me add that at the initiative of the United Russia party, the budget loan for the building of regional roads has been increased by 25 billion roubles to 50 billion roubles.
The first line of the East Siberia-Pacific Ocean oil pipeline will be in operation within a month. Russian oil will flow directly to the huge Asia-Pacific market.
The construction of the second part of the Baltic Pipeline System is moving ahead at a rapid pace.
We continue working on the new natural gas export routes, the Nord and South streams. We appreciate our foreign partners who have supported these plans.
Yes, there had been some doubts and attempts at political speculation and, as you know, open ill-will in certain circles. But, as we had expected, pragmatism and economic feasibility gained the upper hand.
There are several reasons that make the implementation of such major projects important.
First, we are creating conditions not only for increasing export of commodities, but also for the creation of new processing centres in the Russian Federation.
An example is the Sakhalin-Khabarovsk-Vladivostok gas pipeline. In effect, that is a part, only the beginning of an ambitious eastern programme of the large-scale gasification of Russia's Far East. Modern developments in the gas-chemical industry will be created there. Eventually the gas transportation systems of the country's west and east will be linked into one.
Second. By diversifying transportation routes we objectively make the Russian economy less dependent on fluctuations in various segments of the world markets. Where there are many buyers there are fewer chances for imposing unfavourable terms on us.
Third, the implementation of major joint projects will undoubtedly lend a greater impetus to the post-crisis recovery of the economy in Russia and abroad, in the countries that are our main, traditional and strategic partners.
I think it is a fact of fundamental importance that in spite of the problems caused by the crisis we have not renounced our strategic line of investing in man, in the quality of life or the well-being of Russian families. About 70% of budget spending in 2010 will have a pronounced social character.
You know that early in the year there were heated discussions - among the deputies, with our colleagues in Parliament and within the Government - about the modernisation of the pension system.
And still I am convinced and I am glad that we have made the only right decision, to raise the incomes of our senior citizens, to raise them dramatically. That decision has been taken and it will be strictly adhered to.
As a matter of fact, in ten days, from December 1, the basic part of the pension will be increased by 31.4%.
In 2010 pensions will grow by an average of 46%. As a result of the re-evaluation of the pension entitlements of those who earned these entitlements back in the Soviet times, the average old-age pension will exceed 8,000 roubles. We will no longer have elderly people whose incomes fall short of the living minimum.
Over the past six years life expectancy in Russia has increased by four years to almost 69 years. Experts will tell you that this is a spectacular result over four years.
It became possible partly due to major investments in the healthcare system. This year almost 230,000 patients will benefit from hi-tech medical assistance. The figure will increase to 255,000 in 2010. But of course we would like it to be still higher. To remind you, that the figure in the otherwise good year 2005 was just 60,000. In other words, we have seen a fourfold growth between 2005 and 2009. You would agree that this is a positive result.
We also had long arguments as to whether new hi-tech centres should be opened in various areas of the country, in the Russian regions, or whether it would be better to concentrate all the money in Moscow and St Petersburg. In the end we decided to go ahead and set up hi-tech centres in the Russian regions. I think it was the right decision.
New medical clinics with brilliant staff are already doing very good work. People from Moscow and St Petersburg move to the Russian regions not to make "fast bucks", but to be able to work and help people. Professionals who have devoted their lives to it welcome the opportunity we have given them: to work with modern equipment and technology.
New medical clinics are already operating in Penza, Astrakhan, Cheboksary, Kaliningrad and Irkutsk. A Cardio-Vascular Surgery Centre is to be opened in Chelyabinsk before the end of the year. In 2010 similar centres will be opened in Krasnoyarsk and Perm, a Neurosurgery Centre will open in Tyumen and an Emergency Surgery Centre in Barnaul.
The quality and affordability of medicines is one of the topics that worry people. A restriction on allowing inferior drugs to enter the market should be enforced, high standards for production must be set, the share of domestically produced medicines should be expanded, which ultimately will help cut their price.
People should not overpay for imported drugs whose retail price in Russia is sometimes multiples of what they cost in other countries. It is speculation pure and simple.
All these tasks have been included in the Strategy of the Development of the Pharmaceutical Industry and are in the draft law on medicines. We will shortly introduce this bill at the State Duma. I urge you to support this law.
I also ask United Russian deputies to secure the adoption of legislation that will protect minors from alcohol, beer and cigarettes and, in addition, stop abuses in the production and sale of alcohol and liquor.
Tens of thousands of people in this country still die every year from problems related to alcohol abuse, from smoking and from consuming inferior alcohol products.
The Government has launched preventive programmes to address these acute social problems. I hope very much that they will yield results.
At the same time I am sure that this work should actively involve people beyond those who do it for a living: medical professionals, teachers and social workers. What is needed is the effort of society as a whole, of religious organisations and all the people concerned. And of course huge responsibility rests with families. There is nothing like the example of parents and family values.
More should be done to promote a healthy way of life. Incidentally, not all the Russian regions have adopted programmes for the development of fitness and sports. Some regions have them, but there are still many regions where there are no such programmes. I believe that our deputies in the regional legislatures should rectify this mistake. Please pay close attention to this.
In recent years many Russian families have been presented with a real opportunity to solve another long-standing Russian problem: the housing problem.
We are committed to keeping this area within our purview. We must fulfil our commitments to individual categories of citizens to make housing more accessible and promote buying with mortgages, the most universal instrument used throughout the world. Every effort will be made to maintain the current pace of housing construction.
Modern housing standards should be introduced.
The outdated prefabricated "boxes" should be replaced with comfortable, energy-efficient and environment-friendly homes, including low-rise houses. Unfortunately, we have not been paying enough attention to that topic.
What we need is essentially a programme of large-scale construction of inexpensive housing. Its share in the total housing stock is now about 5%. It should be brought to 25%, let me stress, not less than 25%.
The key issues are the development of the construction industry, the introduction of new construction technology and the allocation of land for development and the building of infrastructure.
That is why the Housing Construction Fund must work more effectively. This year alone it has prepared 1,500 hectares of federal land for development on which 6 million square metres of housing will be built.
Now a few words about the problem I just mentioned as one of the main instruments used in the world to solve the problems of housing. I am referring to the mortgage. It is poorly developed here. Why? The answer lies on the surface: it is expensive; the interest rate on loans is high. The average rate is 14-15%. For mortgage loans to reach the level that would make them affordable to a larger number of people the rate must drop to 10-11%, in the opinion of experts, both Government experts and our foreign colleagues whom we bring in. But for mortgage to become cheaper the banks must have a "long" and cheap resource, so-called long money. Do we or do we not have such sources? We do have them.
Frankly, there are not many. But we certainly have two. They are the resources of the National Welfare Fund and the pension savings in the management of Vnesheconombank.
Just two days ago we were reviewing the results of the analytical work that was done in the previous months and we have assessed the potential.
Today, with your permission, I will report to you the results of this work, the specific decisions that we propose and which in my opinion should play an important role in increasing the amount of effective housing loans issued.
Part of the pension savings in the management of Vnesheconombank will be invested in reliable mortgage bonds of Russian banks. We are talking about 163 billion roubles.
Also, Vnesheconombank will allocate a further 50 billion roubles of its own money, and 40 billion will come from the Housing Mortgage Agency.
As a result, in 2010 we will be able to raise an impressive 250 billion roubles to support mortgage loans. The money will be invested in such a way that the end cost of a mortgage for clients will not exceed the desired 10-11%.
My colleagues are telling me that they will be able to launch the programme no later than February next year. But I think that if it gets going in the first quarter of next year, the task will have been fulfilled. I hope that it will greatly expand the opportunities of home mortgage crediting.
Moving on, according to many specialists, Government experts and the heads of regions, the programmes of the Housing and Utilities Reform Fund have proved to be among the most effective. They were conceived before the crisis and, honestly, few people believed that in the current difficult economic conditions, with financial resources in short supply, we could continue that programme. And yet we made it, we have continued it.
As a result more than 10 million Russian citizens moved to better housing in 2008-2009. Before the middle of next year 150,000 residents of decrepit and unsafe housing will move to new flats. It is important that simultaneously we have supported the building industry and preserved thousands of jobs.
As you know, the programme of the Housing and Utilities Fund is intended to end before 2011. Considering how effective it is, I think it is possible to extend it until at least January 1, 2013. We should do everything to rescue people from slums, from houses in which it is not safe to live. We should solve this problem in the main.
In 2010 we will meet all of our commitments to provide Second World War veterans with housing. We will provide flats for all the veterans who need them, including those who did not join the waiting list before the earlier deadline of March 1, 2005. After all, war veterans have earned the right to state support and care with their whole lives, and not simply by making it to the waiting list on time.
I would like to say that the paper work involved in obtaining a new flat is still very complicated. Those present surely understand that this is an administrative process. One should know the base, the number of people, the number of flats and the amount of money that must be disbursed in a timely manner so as to make the money available to buy or build housing. The sooner we have this base the better.
However, elderly people find it difficult to obtain all these documents. So, you can consider it to be my direct instruction: the local deputies, the United Russia representatives in the local governments must help veterans do all the paper work as quickly as possible. You have enough opportunities to influence any bureaucrat or any bureaucratic institution. These institutions would do well to meet people half-way sometimes. I very much count on the support of the Russian regions over this matter.
As part of the preparations for celebrating the 65th anniversary of victory in the Great Patriotic War, additional social security measures for veterans are planned. They will get the necessary medical assistance and a lump sum by May 9. Nearly 5 million people will be eligible for this lump sum: veterans of the Great Patriotic War, disabled peoples, those who worked for the war effort in the rear and former concentration camp inmates.
I have no doubt that along with government programmes dozens of citizens' initiatives to support veterans and preserve the historic memories of the great victory will be implemented.
United Russia will take part in this noble work.
We will complete, strictly in accordance with the time frame, another key housing programme, the provision of permanent housing for servicemen and retired servicemen.
In 2008, 22,000 flats were built or bought for them. Those who have been involved in this know that until recently it seemed an impossible task. But we tackled it together, we are moving forward and we are determined to carry it through. The target for 2009 and 2010 is 45,000 flats every year, which will completely solve the problem.
The servicemen of other security agencies will get permanent flats before the end of 2011.
As I have said, this year more government housing certificates were issued to servicemen than in any other year.
Perhaps some of them won't manage to collect the money due to them before the end of December. Mechanisms will be put in place to enable them to use their certificates next year. Servicemen can be assured that they will be able to exercise their right and move into new flats.
To prevent such a problem from arising again, the Ministry of Regional Development and the Defence Ministry have been instructed to complete the issue of 2010 certificates during the first six months. But perhaps it would be better if they did it in the first quarter of next year.
The accumulation-mortgage system is already up and running. Under this system several thousand servicemen have acquired flats. Beginning next year 10,000 servicemen will enter the military mortgage system each year.
In other words, young officers, those who have decided to devote themselves to military service and the defence of their country will not have to wait for years before they get their own flat.
While we are trying to make the economy and social services effective, we cannot but expect the same from the state. The decisions already taken have brought substantial changes to the principles on which control and supervisory bodies operate. There are fewer inspections of all kinds. In the most important spheres it is enough now to provide notice of a new business rather than seek permission to do so.
However, the topic has not been closed.
Certainly, most of the people who work in the federal and municipal civil service are honest, decent and conscientious people. At the same time some officials are still mired in red-tape, use every pretext to demand that business obtain permits, which are essentially meaningless and are very burdensome for business.
New steps are necessary to relieve businessmen of "bureaucratic pressure".
At present 78% of the goods sold in the country are subject to mandatory certification. We will cut that list by 50% at the next meeting of the Government. But even that is not enough.
Our guests from the European Union countries know - and some of them are present here - that in the EU countries, with their tough standards, only 15% of products are subject to mandatory certification. In all other cases the producer independently declares that his goods comply with the safety and quality standards. The principles of self-regulation and liability insurance are widely used.
Our domestic businessmen should not be obliged to spend a lot of time and effort to obtain permits and certificates in order to bring their products to the market.
As I said, the Prosecutor General's Office recently scrutinised the agencies that have control and supervisory functions. The inspection revealed that the issue of permits, various certificates and chits has become a lucrative business involving questionable firms and all sorts of dubious schemes.
That area should be put in order, it is necessary to get rid of the numerous middlemen who stuff their pockets by taking advantage of their close ties with the Government and management agencies.
To this end the Government will shortly approve an exhaustive list of paid services required to execute legal documents.
A ban will be imposed on the transfer of such services to private firms. Government organisations will no longer be allowed to set arbitrary prices for these services.
Most importantly the applicants will not have to pay for any actions not stipulated by the procedure. Attempts to exact such payments will be considered an offense punishable by administrative measures and sanctions. We will introduce the relevant amendments very soon and we ask you to support them.
The Electronic Government project has long been a subject of discussion. That project is now moving into the implementation phase. It is called upon to raise the quality of government services and make these services cheaper and less time-consuming for people.
As early as 2011 it will be forbidden to require citizens to present any documentary proof if the necessary data are already available at some federal or municipal information banks. They were created in the first place to relieve people of the need to collect the same documents again and again.
The Government intends to expeditiously adopt a comprehensive plan to enhance the quality of government services, shed unnecessary functions and further bring down administrative barriers. Similar plans should be developed in each agency and each region and municipality.
I ask the members of United Russia to take an active part in a full-scale "revision" of the Russian bureaucracy.
In addition, all the ministries and agencies have been instructed to prepare proposals on cutting their own costs. From the results we will see what ineffective and ill-advised costs are unnecessary today and can be discontinued.
At the same time much greater benefits could accrue from the creation of long-term incentives for the central and local governments to use their resources rationally and improve the quality of public services.
That would involve the introduction of new mechanisms in budget administration, the transition to performance-oriented financing, modern remuneration systems and improvement of the state procurement system and budget investment technologies.
The pace of such transformations must increase dramatically at the federal, regional and municipal levels.
Before the end of the year the Government will submit to the State Duma a draft law that will grant greater autonomy to budget institutions, most importantly motivate them to spend budget resources more effectively.
It is necessary to continue to divide the expenditure commitments between federal and local governments. The current model is far from ideal. It must be constantly improved. We have already done much towards that end, but we must move forward.
In addition, a reform of federal and municipal control should be carried out concentrating on the evaluation of the performance of government bodies and officials. As it is, many "supervisors" cannot get around to it. It is far more lucrative, comfortable and pleasant to supervise business.
Dear colleagues and friends,
I have been speaking about things that may appear to be rather boring. The improvement of government mechanisms, streamlining the work of the civil service is a hard, painstaking work that sometimes is not visible to an outsider.
However, at the end of the day it determines how useful for citizens these huge resources will be, the resources that we put in the public sphere, what the quality of education, healthcare and other public services will be. How comfortable people who engage in business will feel, whether business will get real assistance from government or merely "spokes in the wheel".
Whether any person will be able to easily and comfortably obtain the necessary government service or whether he will have to knock endlessly on the doors of various offices.
That is why the task of making government mechanisms more efficient should be constantly within the purview of United Russia.
Esteemed participants in the congress,
Our party has more than once tackled important and tough challenges that confronted the country and Russian society.
United Russia was instrumental in "putting the state together" in the early 2000s, in putting an end to anarchy and restoring a common legal space in the country. It is true that much still remains to be done. But much, very much, has already been done.
Our party can claim the credit for laying the foundations that enable the country to go through this crisis year without dramatic upheavals and to preserve the potential for post-crisis economic recovery.
United Russia holds the political initiative securely in its hands. We are ready to work in an open and competitive political environment, we should not sidestep the most acute topics or be afraid of political debate or open political struggle.
Each of us is called upon to give his best. A lot depends on our ability to achieve results, on our efficiency.
At the same time, I would like to warn those who have come to see the party as an elite and prestigious club membership which paves the way to furthering one's ambitions, one's career and solving other problems.
United Russia is a political force, which should continue to serve the development of the country and commit all its resources to fulfilling its plans.
We should know and feel the mood of the people, understand their problems. That is vital, for honest and objective assessment of the actions of the authorities as a whole and of the party itself.
I appeal to all the members of United Russia, to the deputies of all levels, the heads of regions, whom we have promoted and supported, and to local activists who are contributing to the implementation of the party's projects.
Arduous work lies ahead for all of us. We must all contribute to it. Everyone in his place should do his job honestly and effectively, as it should be done. It is our duty to achieve success in the interests of Russia and its millions of people.
I have no doubt whatever that we will succeed.
Thank you very much for your attention.