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Opening Remarks at Meeting on Economic Issues

03 июня 2009 г.

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Good afternoon,

We have several subjects to discuss today. I will start with the budget address’ implementation. We agreed that it would be best to postpone the deadline for sending to the State Duma the draft law on the federal budget for this year and the period through to 2012, and also the draft law on changing the form of the budget for this planned period.

As I understand it, the amendments to the Budget Code will be ready very soon. I would like you to brief me on this work.

Coming to the second point I want to discuss today, what is happening in our economy depends directly on the state of affairs in the global economy of course, and on the development forecasts that we have now and that form the foundation of our budget planning. I propose therefore that we discuss the current trends that have emerged. This would also be useful with the St Petersburg Economic Forum and other events coming up here in Russia, including the Shanghai Cooperation Organisation summit, where these various economic issues will also be discussed, and then of course we also have preparations for the G8 summit in Italy. It is important that we ourselves have a clear understanding of the trends that will shape our budget planning over the coming period.

Of course, there is a big uncertainty factor, and assessments are changing all the time. The favourite question for analysts all around the world is when will the crisis hit the bottom, and everyone, except perhaps the most die-hard optimists, gives evasive answers. But even so, we still need to talk about the current evaluations and perhaps formulate our own views, talk about the positive signs too that have emerged on a number of markets, and about the negative circumstances that we also face.

Much in this area depends on successful action by the world’s leading economies, the key economic players such as the United States, China, the European Union countries and Japan, and our own efforts too of course. Much depends on the state of global currencies, the raw materials markets, and the situation with our closest neighbours and trading partners. But most important of all is what we do ourselves, the effectiveness of our own action, of the measures we plan to take.

There are a few issues I want to go over briefly at the start of our work. First of all, the budget address set the goal of making state support for business dependent on a number of specific conditions, namely that the businesses concerned undertake steps to modernise production, introduce new and effective technology, increase their energy efficiency, and raise labour productivity too of course – something we have all been talking about. These are urgent steps and we should not wait until the next budget cycle to start trying to motivate our business, our production enterprises, to work in this direction.

I think that the bylaws will have to stipulate criteria for future support for our companies taking into account the things I just listed. Otherwise we will not obtain the desired results from investing state funds in supporting business.

There were also a number of subjects raised during my recent meeting with business community representatives. They concern the obstacles in the way of business activity, obstacles that took shape a long time ago and unfortunately, are still here to this day. But there are also new barriers. In particular, I was told during the meeting about the obstacles that have emerged on regional markets.

I think that in this decade these kinds of practices are simply unacceptable. These regional decisions are something the prosecutors and the Government, including the anti-monopoly authorities, should look into.

How can we allow our market to be divided into fiefdoms this way? What kind of feudalism is this? No crisis justifies this. This is not 1993.

The issue of excessive accounting and reporting requirements for small businesses was also raised at the meeting. Whatever the situation, businesspeople always think these requirements are excessive and a waste of time, of course, but what the issue really boils down to, as the businesspeople see it, is this: if we have introduced a simplified system for calculating and paying taxes, either it has to be genuinely simplified, or else better not to apply it at all. This was a point raised by practically all the speakers from among those using this system.

Two other matters were raised. I already spoke about the effectiveness of the EGAIS system [Russia’s Unified State Automated Information System for controlling production and distribution of alcohol products], about unfair competition from foreign companies on our markets (another of the subjects raised) and about the lack of incentives for private companies to engage in geological exploration. I brought up all these points in order to come back to what was discussed with the business community representatives. Of course, I will sign instructions on these matters, but we can also exchange views on them during today’s meeting.

Another matter that I want to mention in conclusion is that we work in active partnership with our close neighbours, helping them to get through the crisis, including by providing them with considerable financial aid. Sometimes this makes it necessary for us to comment on the economic situation in these countries, on the effectiveness of the economic measures they are taking and on why they turn to us for help and support. But we have never and will never make personal comments on other countries’ leadership.

We think that this is unacceptable from the point of view of diplomatic ethics, and we hope that our close partners will share this view.

Let’s begin work.

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