President of Russia Vladimir Putin: Good afternoon colleagues, members
of the Federation Council, State Duma deputies, citizens
of Russia,
Today, as usual in these
annual addresses, I will speak about our tasks in the economy,
the social sector, domestic and foreign policy. This year’s address
will focus particularly on the economy, social issues,
and domestic policy.
We have to address all
of these different matters in complicated and highly unusual
conditions, which is not a unique event in our history.
The people of Russia have shown convincingly once again that they can
rise to the difficult challenges and protect and defend their
national interests, sovereignty, and independent course.
Colleagues, I have already said
publicly on other occasions what I want to say today, but let me
say it again now.
Our people have united around patriotic
values. We see this unity and we should thank them for it. They have
united around these values not because everyone is happy and they have no
demands, on the contrary, there is no shortage of problems
and difficulties. But people have an understanding of their
causes and, most importantly, are confident that together we can overcome these
problems. It is this readiness to work for our country’s sake
and this sincere and deep-seated concern for Russia that form
the foundation of this unity we see.
People expect at the same time
to have broad and equal opportunities for self-realisation
and for making reality their business, creative, and civil
initiatives. They expect respect for their person, their rights, freedoms,
and labour.
The principles of justice,
respect, and trust are universal. We are consistent in defending
these principles on the international stage, and, as we see, not
without result. But we must put the same effort into guaranteeing these
principles here at home, with regard to every individual
and to society as a whole.
People take any injustice
and untruth very much to heart. This is a distinguishing feature
of our culture in general. Our society resolutely rejects arrogance,
conceit, insolence and selfishness, no matter in who they see it. Our
people place greater value on qualities such as responsibility, high
moral standards, concern for public interests, and readiness
to listen to others and respect their opinion.
This was reflected
in the election campaign that took place this year. As you know,
I supported in my 2012 Address the idea of returning
to a mixed model for elections to the State Duma. This
was a principled step towards meeting public opinion’s demands.
I think that our course
of developing the political system, the institutions
of direct democracy, and of making elections more competitive is
completely justified, and will certainly continue.
The State Duma has bolstered its
role as a representative body and the legislative branch
of power’s authority has strengthened in general. We must support
and confirm this with concrete action. This concerns all political forces
represented in the parliament.
United Russia, of course, bears
particular responsibility here. Incidentally, the party is celebrating its
15th anniversary at this time. United Russia has
a constitutional majority in the State Duma and is
the Government’s main support in the parliament. We must
organise work together in such a way as to ensure that all
promises and commitments made to our people are honoured.
Our people decided the election
campaign’s result and chose the road of constructive
development. They proved that we live in a healthy society that is
confident in its fair and just demands, has ever stronger immunity
against populism and demagogy, and values highly the importance
of solidarity, closeness and unity.
I am not talking, of course,
about any kind of dogmas or a false unity put
on for show, and I am certainly not talking about imposing
a particular world view. We have already gone through all of this
in our history, as you know, and we have no intention
of returning to the past.
But this does not mean that we can
juggle eloquent words and use talk of freedom as a cover
for insulting others’ feelings and national traditions.
Someone might consider themselves more
progressive, intelligent and cleverer than someone else, but if this is
the case, be respectful towards others, and this would be
the natural thing to do.
At the same time, I think
it is unacceptable to take an aggressive attitude in return, all
the more so if it degenerates into vandalism and breaking
the law. The state authorities will respond with firmness
to such cases.
Tomorrow, the Council
for Culture will meet, and we will certainly discuss these issues
that provoke broad discussion, and will talk about the principles
of mutual responsibility of civil society representatives
and arts world figures.
But let me emphasise that whether
in culture, politics, the mass media, public life,
or in debates on economic issues, no one can ban freedom
of thought and the freedom to openly express one’s
position.
Let me say again that when we speak
of solidarity and unity, what we mean is conscious and natural
consolidation of our people in the interests of Russia’s
successful development.
Is it possible to achieve major
strategic goals in a fragmented society? Is it possible
to resolve our tasks with a parliament that instead
of productive work spends its time on competing ambitions
and fruitless argument?
Can we develop successfully
on the shaky foundation of a weak state and apathetic
government controlled from abroad and that no longer has the people’s
trust? The answer is clearly no.
In recent years, we have seen
a number of countries where this kind of situation has opened
the road to adventurists, coups, and ultimately, anarchy.
Everywhere, the result is the same: human tragedies and victims,
degradation and ruin, and disappointment.
It is worrying to see that around
the world, even in the seemingly most prosperous countries
and stable regions, we witness the emergence of an ever
greater number of new divisions and conflicts on political,
ethnic, religious and social lines.
This is all unfolding against
the background of the very serious migration crisis that
countries in Europe and elsewhere face today. We know well
the consequences that these great upheavals can bring. Unfortunately, our
country went through many such upheavals and their consequences
in the 20th century.
Next year, 2017, will mark the 100th anniversary
of the February and October revolutions. This is a good
moment for looking back on the causes and nature
of these revolutions in Russia. Not just historians and scholars
should do this; Russian society in general needs an objective, honest
and deep-reaching analysis of these events.
This is our common history and we
need to treat it with respect. This is something that the outstanding
Russian and Soviet philosopher Alexei Losev wrote about. “We know
the thorny road our country has travelled,” he wrote. “We know
the long and tiring years of struggle, want and suffering,
but for our homeland’s sons, this is all their native, inalienable
heritage.”
I am sure that the vast
majority of our people have precisely this attitude towards their
homeland, and we need history’s lessons primarily for reconciliation
and for strengthening the social, political and civil
concord that we have managed to achieve.
It is unacceptable to drag
the grudges, anger and bitterness of the past into our life
today, and in pursuit of one’s own political and other
interests to speculate on tragedies that concerned practically every
family in Russia, no matter what side of the barricades our
forebears were on. Let’s remember that we are a single people,
a united people, and we have only one Russia.
Colleagues, the basis of our
entire policy is to take care of people and increase human
capital as Russia’s most important resource. Therefore, our efforts are
aimed at supporting the traditional values and the family,
at [implementing] demographic programmes, improving the environment
and people’s health, and promoting education and culture.
You know, I cannot but say
a few words about what is happening in reality, about what we have
here and what we have achieved. The natural population growth
continues.
In 2013 –
the demographers have the term fertility rate – it was 1.7
in Russia, which is higher than in the majority of European
countries. For example, it is 1.2 in Portugal, 1.3 in Spain and Greece,
1.4 in Austria, Germany and Italy, and 1.5
in the Czech Republic. These are 2013 figures. In 2015,
the total fertility rate will be even higher in Russia –
1.78 – the rise is slight but it is still a rise.
We will continue to introduce
changes in the social sphere so that the system meets more
of people’s expectations and needs, and becomes more modern
and just. The social spheres should attract skilled professionals
and talented young people. That is why, we are raising specialists’
salaries and improving their working conditions.
Let me note that competition
to enrol in medical and teacher training universities grows
steadily (whereas not so long ago it was hovering around zero). In 2016,
it was 7.8 persons for the teaching professions, and after the 2016
enrolment the general competition for state-financed openings was
almost 28 applications per opening. God grant all of them –
the young specialists – good health and success in their
future pursuits.
I remember well how
my colleagues and I discussed hi-tech medical aid projects
and networks of perinatal centres, which we lacked at that time.
In 2018, Russia will have 94 such centres.
Today our doctors save newborns
in the most complicated cases. We have reached the level
of the advanced countries in these indicators as well.
Back in 2015, Russia’s infant
mortality indicators were 6.5 per 1,000 live births, whereas the European
Region of the World Health Organisation had 6.6; this means that our
[indicator] was slightly better. After 10 months in 2016, Russia reached
the level of 5.9.
Over the past decade,
the number of high-tech medical services has increased
by a factor of 15. Hundreds of thousands of complex
operations are performed not only at the leading federal centres but
also at regional hospitals. While in 2005, when we launched
the programme, 60,000 people in Russia received high-tech medical
assistance, in 2016 the number will be 900,000. It is also essential
to move forward. Still, compare: 60,000 and 900,000. Some difference.
Next year we will need to introduce
mechanisms to ensure stable financing of high-tech assistance. This
will make it possible to make it even more accessible and reduce
waiting time for operations.
On the whole –
to put it bluntly – problems in the healthcare sector
remain and there are still plenty of them. They are related mostly
to the primary care level. Its development should be given priority.
Patients are often confronted with
waiting lines, a perfunctory attitude and indifference. Doctors are
overworked and it is difficult to get an appointment with
the required specialist. What often happens is that outpatient clinics are
provided with the most modern equipment but medical specialists simply
lack qualifications to use that equipment.
Starting next year, regular retraining
programmes will be organised at federal and regional medical centres
and universities. A specialist will now obtain an advanced
training voucher and will be able to choose where to undergo training.
We will also continue to enhance the IT
level of the public healthcare system to facilitate
the procedure of scheduling doctor’s appointments and keeping
records. It is important to free doctors from routine tasks, from
the need to fill in bundles of reports and statements
and give them more time for attending to patients.
Information technology will also be used
to significantly tighten oversight over the market of vital
medications. This will make it possible to get rid of counterfeit
and illegal products and deal with inflated prices in the procurement
of medications for hospitals and outpatient clinics.
I propose connecting all
of our country’s hospitals and outpatient clinics to high-speed
Internet over the next two years. This will enable doctors even
in a remote town or village to use the advantages
of telemedicine and quickly receive consultations from their
colleagues at regional or federal clinics.
I would like to bring this
to the attention of the Communications and Mass Media
Ministry. The Minister has assured me that this task is absolutely
realistic and feasible.
I just mentioned this
in my Address, and the whole country will now follow
the issue carefully.
Considering Russia’s geography, its vast
expanses and certain poorly accessible areas, Russia needs
a well-equipped air ambulance service. Next year, the air ambulance
programme will cover 34 of the country’s regions, which will receive
funding from the federal budget.
First of all, I am referring
to Siberia, the North and the Far East. For this
purpose (the parliament members should know this, as it was partly
their initiative), in 2017, we will allocate 3.3 billion rubles
to pay for aviation services as part of the air
ambulance development project (the proposal should be adopted in the second
reading).
Colleagues, in every corner
of our great country, children have to be able to study
in a pleasant, user-friendly, modern environment, so we will continue
the programme for the reconstruction and renovation
of schools. There will be no more rundown and dilapidated school
buildings with no basic amenities.
It is necessary to finally resolve
the problem of the third shift, and hopefully eliminate
second shifts as well. We should certainly make extra effort
to improve the qualifications of teachers. As you know,
a programme is being implemented to expand the number
of students served by educational institutions in 2016. This
programme is planned for 2016−2025, with 25 billion roubles envisaged annually.
Incidentally, we all know that it is
primarily the regions’ responsibility. However, we decided to support
the regions in this important initiative. Overall, from 2016
to 2019, we plan to create 187,998 new openings for students
in schools.
At the same time,
the greatest concern for parents and teachers,
and the general public as well is the content
of the educational process and how well school education meets
two basic goals that Academician Dmitry Likhachev listed: to give
knowledge and to foster morality. He rightly believed that morality
is the basis that determines the viability of society: its
economic, public, and creative sustainability.
It is certainly important
to preserve the depth and solidity of national education.
Compositions have been returned to the school curriculum,
and more attention is being paid to the humanities.
Yet, the hours of tuition
according to the school curriculum will clearly not be enough here.
We need projects in the theatre, cinema, television and museums,
and on the Internet, that are of interest to young
people, that attract the attention of young people
to the national classical literature, culture and history.
Our schools must promote creativity.
The children must learn to think independently, work both
on their own and as part of a team, address unusual
tasks and formulate and achieve goals, which will help them have
an interesting and prosperous life.
Great many experiments have been held
in Russian schools and abroad. We should consider experiments
carefully, but we certainly must move forward. We must promote the culture
of research and engineering work.
The number of cutting edge
science parks for children will increase to 40 within two years. They
will serve as the basis for the development
of a network of technical project groups across the country.
Companies, universities and research institutes should contribute
to this, so that our children will see clearly that all of them have
equal opportunities and an equal start in life, that Russia
needs their ideas and knowledge and that they can prove their mettle in Russian
companies and laboratories.
We can see the success
of the Sirius educational centre for gifted children.
I believe that we need a network of such centres,
and I propose that the regional authorities consider creating
centres for gifted children at their best universities
and schools.
At the same time, there are
several things I would like to stress. Our education system must be
based on the principle that all children and teenagers are
gifted and can succeed in science, in creative areas
and sport, in careers and in life. Our task is to help
them develop their talents. When they are successful, Russia is successful too.
Colleagues, I view the young
generation as Russia’s reliable foundation in a turbulent
and complicated 21st century. I believe that they are
able not just to rise to challenges but also to make their
contribution to the development of the intellectual,
technological and cultural agenda of global development.
It is not surprising that so many
students at schools and universities take part in volunteer
projects in such vital areas as patient care, assistance
to the seniors and people with disabilities, education, sport,
culture, local history, search parties, and the protection
of nature and animals.
It is a trait of our times
that large numbers of people are now ready to contribute to all
kinds of charity initiatives, such as petitions on social media
and in the media to collect funds for treating
the ill or helping children. Many people are quick to respond
to such calls and do so sincerely without seeking to gain any profit.
Sometimes it is even surprising
to see that people who do not make that much money have the urge
to help those in need.
I ask the Civic Chamber
and the Agency for Strategic Initiatives to become
proactive in supporting volunteer organisations, charities
and non-profits. Through their commitment and generosity, people who
contribute to such projects promote collective efforts that Russia needs
so much right now. They create significant social potential that must be used
effectively.
It is necessary to remove all
barriers that undermine the development of the volunteer
movement, and also provide every assistance non-profit organisations might
need. The key decisions in this respect have already been taken.
Starting next year, non-profits with the required experience will be
authorised to provide social services funded from the budget.
Colleagues, I would now like
to call on many of you, and I want to be sure
that governors and municipal authorities hear what I say. I ask
you not to be, as they say, greedy, to refrain from working only
with state-run institutions, and enable non-profit organisations
to provide social services as much as possible. It is very
important to establish cordial relations with people. I propose that
we all keep an eye on these issues.
What we all want is to improve
the quality of social services by engaging non-profits
in this sphere. I instruct the Government
and the Parliament to finalise efforts to devise
a clear legal framework for non-profit organisations
as providers of socially important services and establish
requirements in terms of their competence, without creating
additional red tape, of course. We must value the people’s demanding,
engaged and proactive attitude in this respect.
I would like to once again
address many of you with the appeal to not hide in your
offices and not fear dialogue with the people, but go to meet
them, speak with them honestly and openly, and support their
initiatives. This is particularly important on urban development issues
and matters concerning preserving the historical appearance
and creating a modern living environment.
Unfortunately, such issues are sometimes
decided in the corridors, and when this happens, it is hard not
to ask, “Are you sure that what you are proposing, based only
on the opinions heard in officials’ offices, is the best
proposal? Is it not better to consult with the people and ask
them what they want to see in their streets, yards, parks
and embankments, sports fields and children’s playgrounds?”
Next year, we will send 20 billion
rubles for urban development programmes to the regions,
including in the single industry towns. It is a matter
of principle that residents should take part in deciding how this
money should be spent and which projects should take priority. I ask
the Russian Popular Front to take an active part in this
work too. We need to organise effective oversight of this work so
as to ensure the concrete results that people want to see,
and we must support people who wish to join in these urban
development projects.
It is important that civil society takes
an active part in deciding issues such as improving
environmental protection legislation, protecting rare plant and animal
species, and establishing a humane system for dealing with stray
animals.
We have declared next year, 2017,
the Year of the Environment. I am instructing
the Government to draft programmes for protecting such unique
symbols of Russia’s nature as the Volga, Lake Baikal,
and Lake Teletskoye in Altai.
Throughout the country, we need
to clean up polluted areas and clear the dumps that have grown
up on the outskirts of many towns, as we heard recently
from Russian Popular Front activists. This problem exists not just in big
towns but also in small settlements.
Moscow and St Petersburg are
already carrying out large-scale road modernisation programmes. Starting next
year, we will begin similar projects in other big cities too,
in urban areas that are home to around 40 million people. Over
the next two years, at least half of the roads should be
modernised. I will not go further into the details now.
The decision has been taken and the needed funds earmarked. Now,
we just need to work effectively.
We will also pay the needed
attention to important federal roads and to building
the bridge to Crimea, which is an infrastructure project
of national importance. This bridge’s construction is going
to schedule.
Colleagues, two years ago, we
encountered serious economic challenges and a difficult situation
on global markets. We found ourselves facing sanctions that were
an attempt to get us to dance to another’s tune
and ignore our own fundamental national interests.
But let me say again that the main
reasons for our economic slowdown are to be found above all
in our internal problems, and above all in the lack
of investment resources, modern technology, professional human resources,
insufficient competition, and shortcomings in our business climate.
The real sector of the economy has stopped falling now
and we have seen a small increase in industrial production. Last
year, our GDP fell by around 3.7 percent, but I think that this year,
the figure will be small. Over the first 10 months of 2016, it
came to 0.3 percent, and I think the final figure will be
close to this.
The support programmes
for a number of industrial sectors, including the housing
market, have played a big part. I will say more about this now. We
see the increase in industrial production, and it is small, but
the trend is a positive one and we should certainly work now
to keep it going.
Concerning the housing market, more
than 85 million square metres of housing came onto the market
in 2015. This was a historic record for our country.
This housing must be sold now,
and of course, we need to increase people’s purchasing power.
I will say more about this too, in relation to our mortgage
support programmes.
We shall continue to provide
targeted assistance to economic sectors still facing a negative
situation. I already mentioned that modest growth in industrial
production is underway now.
We have seen a slight overall
decline in the automotive industry, although trucks have shown
an increase of 14.7 percent, light commercial vehicles, up 2.9
percent, and buses, up 35.1 percent. In railway engineering, there is
a 21.8 percent growth, and freight cars are up 26 percent.
Agricultural machinery and equipment have shown very good momentum, 26.8
percent. The light industry is also demonstrating an upward trend.
We have ensured macroeconomic stability,
which is very important, and have maintained financial reserves.
The Central Bank gold and currency reserves have not decreased, but
have even grown. Whereas on January 1, 2016 they totalled $368.39
billion, now they stand at $389.4, almost 400 billion. Here, too, we can
see positive dynamics.
We expect a significant decrease
in inflation by the end of this year, to below 6
percent. Here, too, I would like to cite a few figures. If you
remember, the inflation rate in 2015 was 12.9 percent. I hope
that it will not rise above 6 percent this year, will stop around 5.8 percent.
Obviously good, positive dynamics.
Allow me to remind you that
the lowest inflation rate was recorded in 2011, 6.1 percent.
I will repeat, this year it might be even lower. This means that next
year, we could really achieve the target of 4 percent. This is
a very good prerequisite for achieving substantial growth relying
on a healthy economy.
However, I would like to emphasise
that stabilisation does not mean an automatic transition
to a sustainable recovery. If we do not address the underlying
problems of the Russian economy, if we do not launch new growth
factors at their full force, it will stagnate for years, and we
will have to constantly scrimp and save, to delay development.
We cannot afford that.
We will follow another path, which
requires a clear statement of objectives and phased,
system-based work towards achieving these objectives. This approach has yielded
significant positive results more than once, and in a fairly
short period of time. There was a time when we thought our
agriculture issues would exist forever. We know what was said about this
and how it offended our farmers when we spoke about agriculture
as a kind of black hole that can swallow any amount
of money and still produce no results. No, it turned out, even that
sector could be rearranged. We found weighted solutions, adopted a state
programme, created a flexible system of support for agricultural
producers and agribusinesses, and today farming is a successful
industry that feeds the country and is gaining international markets.
But as the proverb goes, every
cloud has a silver lining. Our partners imposed the sanctions
I mentioned, and we took measures in response
and at the same time ended up helping our agricultural producers
on the domestic market. They should remember though that this cannot
and probably will not continue forever, and in any case,
consumers need a competitive market environment. Our producers should
therefore make the most of the current favourable situation.
Agricultural produce exports bring
in more revenue today than arms exports. Only recently, we would probably
have scarcely imagined such a thing possible. I have already spoken
publicly about this and can say it again here today. Incidentally,
as far as our arms exports go, we are still a serious contender
on this market. Our exports came to $14.5 billion in 2015,
and our agricultural produce exports came to $16.2 billion. This
year, we expect a figure of $16.9 billion, which is very good. Let’s
thank our agriculture sector workers for this result.
Much depends on the regions
when it comes to developing the agriculture sector. I think we
should give them greater independence in setting the priorities
for using federal subsidies for the agriculture sector.
The volume of subsidies should be pegged to increases
in cultivated land, yields, and other quantitative indicators
of effective production. This would encourage producers to bring idle
agricultural land under cultivation and start using advanced agricultural
technology.
Here, I want to stress that if
we give the regions more independence in using federal budget money
and federal support, this places greater responsibility on them
for producing results, effectively investing the resources received,
strengthening their own economic base, resolving social problems
and problems in the housing and utilities sector.
In order to give our farmers
greater opportunities for finding markets, we need to pay greater
attention to supporting agricultural cooperatives. I ask
the Agricultural Ministry, Rosselkhozbank and Rosagroleasing
to work on this matter, as well as the Corporation
for Small and Medium Business Development that will receive
a capital injection of 13 billion rubles next year.
We have carried out far-reaching
modernisation at our defence industry enterprises. This has resulted
in increased production and, particularly important,
in a significant increase in labour productivity.
The defence industry has posted very good results and gives
a good example. In 2016, we expect growth in the defence
industry to reach 10.1 percent, and a labour productivity
increase of 9.8 percent.
We must direct the defence industry
to produce up-to-date competitive civilian products for healthcare,
energy, aviation and shipbuilding, space exploration and other
high-tech industries. The share of civilian products must increase
to at least one-third of the defence industry’s total
output within the next 10 years.
We have recently held a meeting
on this issue, or rather several meetings, and I want
to share our plans with you. In 2016, civilian goods will reach 16.1
percent of the defence industry’s output, and we plan
to slightly increase this percentage by 2020. The increase will
be relatively small because the Defence Ministry has placed many
rearmament contracts with the industry. The share of civilian
goods will reach 30 percent in 2025 and at least 50 percent
in 2030.
I instruct the Government
to organise systemic work to achieve these goals with support from
our development institutions, including Vnesheconombank (VEB), the Russian
Export Centre and the Industry Development Fund.
The IT industry is one
of the most rapidly developing sectors, which is heartening. Russian
IT companies have doubled their exports over the past five years.
I have just cited the figures for the defence industry
and agriculture: the figure for the defence industry is
$14.5 billion. Our IT exports were almost zero only recently, but they have
risen to $7 billion now.
The IT industry has also improved
other performance indicators, such as revenue and tax payments,
in part due to reduced insurance payment. The Finance Ministry
has not recommended me to say that all these achievements were due
to incentives, and so I am telling you that we also used other
support instruments, although it should be admitted that incentives are very
important for supporting our IT companies. This instrument has allowed
them to effectively use their innovative intellectual potential.
At the beginning of their development in 2010, the IT
companies’ tax payments amounted to slightly over 28 billion rubles, while
two years later the figure reached 54 billion rubles. You can judge
the growth for yourself. Considering the incentives,
the national shortfall in revenue was only 16 billion rubles. In other
words, even the federal budget benefited from the IT companies’
growth. To maintain this positive trend, I propose that we extend
these incentives to 2023. I am confident that the IT industry
can become one of our key export sectors within 10 years.
On the whole, we have good
potential for increasing non-commodity exports. At the same time
we see protectionism growing in the world and, unfortunately, trade
barriers being raised. I can tell you that I recently had
a meeting with my colleagues in Lima, Peru and we discussed
world trade issues. One of the main problems is growing
protectionism. But what does this mean for us? It means that we should
fight for access to external markets more actively
and decisively. Intense international competition will temper
and strengthen our economy and ensure Russian companies reach
a new level of efficiency, the quality of goods
and services and labour productivity.
The examples I cited earlier
show that we are already changing the economic structure
in a focused way, modernising corresponding sectors and creating
new ones, and establishing modern companies that can work
on international markets. It is essential to continue moving
in this direction systematically and assertively. What is needed are
not abstract scenarios, which are mostly irrelevant, but a professional,
thoroughly calculated development forecast. It is important to define
clearly how a better business climate, major investment projects,
an expansion of non-commodity exports, and support
for small and medium-sized businesses will contribute
to economic growth and what the role of regions
and particular production sectors will be.
I direct the Government,
together with the leading business associations, no later than May 2017,
to develop a detailed plan of action through 2025,
the implementation of which will make it possible to achieve
economic growth rates higher than in the [rest of the] world
as early as 2019−2020, and therefore strengthen Russia’s positions in the global economy.
Ladies and gentlemen,
to reiterate, it is important that this plan be supported and trusted
by the business community so that entrepreneurs become actively
involved in its implementation. Today, there is obviously a growing
demand in society for an expansion of economic freedoms (we
have talked about that more than once), stable, steady and predictable
rules of doing business, including the tax system.
It may be recalled that in 2014 we
took the decision not to change the existing tax requirements
for business over the next four years. We did not review them despite
the changes in the economic situation and that, without
a doubt, has had a positive impact on companies’ performance.
At the same time, we should
steer our tax system to work toward the main objective:
to stimulate business activity, ensure economic growth
and investment, and create a competitive environment
for the development of our companies. It is necessary
to streamline the existing fiscal benefits, making them more
targeted, and abandon ineffective instruments.
I suggest that within the next
year we carry out a detailed and comprehensive review
of proposals to fine-tune the taxation system, and we
should by all means involve business associations in this effort.
Despite the domestic political timetable, we still need to draft
and adopt in 2018 all relevant amendments to laws
and the Tax Code so that they can come into force
on January 1, 2019, setting new, stable long-term rules.
At the same time, I am
asking the Government to explore ways to improve mechanisms that
guarantee stability of the budget and public finances, while
delivering on all our commitments regardless of external factors,
including the price of oil and gas.
Moving on, we have overhauled
the legal framework that regulates business activity.
At the current stage, it is important to ensure that
the adopted provisions are enforced, especially in the regions.
Let me draw your attention to the fact that in every region
of the country the basic services provided to businesses,
such as construction permits, infrastructure access and so on and so
forth, should be consistent with the requirements as per
the federal laws and the best regional practices.
Colleagues, we discussed this issue
during a recent meeting held, I believe, in Yaroslavl. This
issue cannot be treated superficially. This is an extremely important area
for our joint work. We will monitor developments in the regions
very closely and evaluate the performance of regional
authorities using these indicators. This is a major task that has
to be achieved as early as next year. By doing so, we will
make sure that all Russian regions operate within a single business
environment and all provide quality services to the business
community.
For many years now, we have been
discussing the issue of streamlining the activities
of supervision and regulatory bodies. Beginning next year, they will
become much more transparent by releasing to the public data
on who inspects whom, how frequently, and what are the results
achieved.
This will provide an opportunity
to promptly respond to abuses and every violation
of entrepreneurs’ rights by an inspector. I will not go
through the list of all the decisions that were adopted
to this effect. There are quite a few of them, so all we need is
to make sure that they are implemented. We must do away with instructions
that have nothing to do with the quality of services
or security, while creating unsurmountable barriers for businesses.
Let me draw
to the Government’s attention that the regulatory
and supervisory bodies should speed up their work to introduce
a risk evaluation-based approach that makes it possible to reduce
substantially the number of inspections while making them more
effective. I add that the inspection bodies should concern themselves
not just with identifying violations, but also with prevention, and not
just through formal measures, but in substance and, particularly
important, provide consultative assistance to entrepreneurs, especially
to those who are just starting their business.
I have already given
the direct instruction to make sure that self-employed people’s work
is not considered unlawful business activity. We should not start creating
problems for these people for invented pretexts. In order
to exclude the possibility of this kind of situation
arising, I ask you within the coming year to formulate
a clear legal status for self-employed people and give them
the chance to work in calm and regular fashion.
Every person engaged in honest
business, whether self-employed or as hired labour, should know that
the state authorities and society are on their side. Justice is
not about putting everyone in exactly the same conditions. It means
giving people greater freedom, creating conditions for pursuing activity
that brings respect, prosperity and success. Everything that limits these
opportunities and violates people’s rights is unjust.
In last year’s Address,
I spoke about pressure on business from some people
in the law enforcement agencies. This sort of action often leads
to successful businesses collapsing and people having their assets
taken from them.
I want to thank
the deputies for supporting the draft law that considerably
toughens criminal penalties against law enforcement personnel
for fabricating cases, including with the aim of hindering
the work of businesspeople.
I want to say a few words
about the fight against corruption. Over recent years, we have seen
a fair number of headline-making cases against officials
at the local, regional and federal levels. I stress that
the vast majority of civil servants are honest and decent people
who work for the good of our country. But neither one’s office,
nor connections in high places or past services can serve
as a shield for corrupt officials. At the same time,
and I want to stress this point, no one has the right
to pronounce a person’s guilt or innocence before the court
has delivered its verdict.
Unfortunately, it has become common
practice here to raise a fuss in the media over these
headline-grabbing cases. We see that people from the law enforcement
agencies are often also guilty of this. I want to stress
the point that the fight against corruption is not a show. It
requires professionalism, and a serious and responsible
approach. Only then will it produce results and receive society’s broad
support.
Colleagues, it is obvious that
the external constraints and domestic borrowing rate increase have
reduced the availability of financial resources for businesses
and individuals. Nevertheless, the banking system has been able
to replace foreign loans to our companies and stabilise
the situation, and this is an obvious fact.
Now we need to reinforce business
activity, the implementation of major economic projects,
the available funding, especially since inflation is going down
as I already said – this creates objective conditions
for making bank loans cheaper. I repeat, the situation has
improved slightly, but only for individual sectors. Overall, lending
to the economy is still showing unstable dynamics.
We injected 827 billion rubles into
the banking system as part of the 2015−2016 anti-crisis support programme.
According to estimates, this resource allowed banks to significantly
increase lending to the non-financial sectors.
However, the volume of these
loans has not grown this year, but even went down slightly. I know about
the calculations in rubles and in foreign currency, but
the decline is still there, even taking into account the exchange
rate difference. I would like those experts who believe the exchange
rate differences are important to take note of this.
Indeed, it is clear that the ruble
rate has changed against the dollar and the euro, and this
must be taken into account, but even with this in mind, all the same,
the decline in lending is evident.
There is certainly no doubt that we need
to stimulate lending to the real sector. But the key
question remains, what methods and means should we use to do so?
Obviously, only stable banks with a solid capital reserve are
in a position to develop lending.
This year, Russian banks have regained
their profitability. The sector’s profit for the 10 months
of last year was 193 billion rubles, and rose almost four-fold,
to 714 billion rubles for the same period this year.
Furthermore, thanks
to the Central Bank’s consistent and decisive efforts,
the banking system is being cleared of outfits that break
the law, violate clients’ rights, and carry out dubious financial
operations. Many of them, at least the weak players, have left
the market. The Central Bank has made an effort to clean up
the banking system and continues this work now. This forms
a good foundation for rapid pick-up in the economy
and for developing lending to the real sector.
A number of countries have
offered banks incentives to stimulate lending to the real sector
of the economy. Some countries are also discussing the possibility
of setting limits on how much borrowed funds banks can place
in financial instruments.
I am not saying that we should copy
blindly everything that is done abroad, all the more so
as the Russian economy and its structure differ considerably from
other countries that are taking these measures, but we can and should
analyse these practices and borrow what would be suitable here.
In many countries,
a non-banking financial sector works with success. We should develop this
sector here too, as this would enable us to bring more money from
investors and citizens into the economy through bonds and other
mechanisms.
This is something we have been
discussing for quite some time now. I hope that the Central Bank
and the Government will draft proposals on developing
the financial market. Of course, this work should focus on our
economic growth tasks and any changes made should not lead
to the emergence of macroeconomic imbalances
or to bubbles in the economy.
It is very important to support
lending for small businesses. This lending continues to fall
for now. What additional steps should we take to change this?
The financial authorities think that this situation can be remedied.
Big banks, for reasons
of the scale and complexity of their operations, apply strict
requirements in accordance with international standards (some experts
think that these standards are overly strict for our situation, but let’s
not go into the details of this debate now), but small regional banks
that carry out the vital function of lending to small businesses
and the general public usually have simpler banking operations
and so could work according to simplified regulations
and requirements. These banks account for only 1.5 percent
of total banking assets, and so this would not create any risks
for the banking system as a whole. This kind
of differentiated banking system regulation would enable clients
to go to the bank that best suits their needs, and small
businesses would not have to compete with big companies for credit
resources.
Of course, our fundamental
requirement has not changed: each level of the banking system must be
healthy and stable, so that the clients and investors will be
confident of the safety of their funds.
Colleagues, to move up
to a higher development level in the economy
and social sector we need our own advanced research and scientific
solutions. We must focus on the sectors where a powerful
technological potential is accumulating for the future, that is,
digital and other cross-cutting technologies that now determine all
spheres of life. The countries that generate such technologies will
get a lasting advantage and an opportunity to generate huge
technological revenues. Those who fail to do this will be placed
in a dependent and disadvantaged position. Cross-cutting
technologies are technologies that can be applied in all sectors, such
as digital, quantum, robotic, neural and other technologies.
However, we should be wary
of the inherent risks of the digital technology. We must
strengthen our protection against cyber threats and greatly enhance
the stability of all infrastructure elements, the financial
system and state governance.
I propose launching
a large-scale system-wide programme to develop an economy
of a new technological generation, the so-called digital
economy. We will rely on Russian companies and Russian scientific,
research and engineering centres to implement this programme.
Russia’s national and technological
independence, in fact, our future depend on this. We need
to conduct an inventory to remove managerial, legal and any
other barriers that hinder the advance of our business
to existing and emerging high-tech markets. We must allocate
sufficient financial resources for these projects, including
by setting this task to the refurbished VEB (Bank for Development).
We will need skilled personnel,
engineers and workers, who will be ready to fulfil next-generation
tasks. This is why we are cooperating with businesses to create
an up-to-date system of secondary vocational education and college
and vocational school teacher training based on advanced
international standards.
We will increase the percentage
of state-financed students at engineering, IT and other key
departments on which our economic development depends. Next year, our
leading universities, including in the regions, will establish
competence centres, which will provide intellectual and personnel support
to projects that are connected with the emergence of new sectors
and markets.
Fundamental research is a powerful
factor in accumulating scientific and technological expertise
required for economic growth and social development. It faces
a dual task: to assess and predict future trends and offer
the best solutions to the emerging challenges.
In science, just
as in every other sector, we will promote competition
and support the strongest, those who are able to produce
practical results. The Russian Academy of Sciences and all
research organisations should take this into account. We will continue building
the research infrastructure that will allow us to perform large-scale
scientific tasks.
Over 200 laboratories have already been
established under the mega grants programme. It would be no exaggeration
to say that they are operating on a global level. They are led
by scientists who determine the trends of global scientific
development (incidentally, many of them are our compatriots who went
abroad in the past).
Recently I met with a group
of such researchers. Now many of them are spending most of their
time in Russian laboratories. They are successful and enjoy their
work. They can see for themselves that Russia is setting interesting
scientific tasks, and creating a sound research base and decent
working conditions.
But, of course, people have
the right to understand that there is a horizon of work
and planning and in this context I would ask you
to ensure long-term funding for productive research projects, in particular,
using the resources of the Russian Science Foundation.
It is very important to support Russia’s talented young
scientists and there are many of them. They should have
an opportunity to establish their research teams
and laboratories. A special category of seven-year grants will
be launched for this purpose. Another 3.5 billion roubles will be
allocated for these purposes, as well as the development
of the research infrastructure and the opening of new
laboratories in 2017 alone, in addition to the already
announced budget for science.
Needless to say, the activities of research
centres should be closely integrated with the education system,
the economy and high-tech companies. We must turn our research
projects into successful commercial products. This has always been a weak
spot for us. A lot of time passes from developments
to their introduction and sometimes even… This applies not only
to our time, and not even to the Soviet time. Things were
the same in the Russian Empire. We must overcome this trend
and we can do this. To resolve this issue, we launched
the National Technology Initiative two years ago. It is called upon
to ensure the leading positions for Russian companies
and products in the most promising markets
of the future.
Colleagues, all of what I said now, all of these
priorities are set out in the National Science and Technology
Development Strategy. I have signed the executive order approving it.
You all know that we have encountered attempts to pressure
us from abroad over these last years. I mentioned this twice. They have
used every means: from spreading myths about Russian aggression, propaganda
and meddling in others’ elections to persecuting our athletes,
including our Paralympic athletes.
But, as I said, every cloud has a silver lining,
and the doping scandal, I am sure, will help us to put
in place the most advanced system here in Russia
for fighting this scourge. I say this based on the fact
that our national doping prevention programme will be ready
at the start of next year.
What I want to say is that everyone has more than had
their fill now of media campaigns carried out to order,
the fabrication and publication of compromising material,
and moralising lectures. If need be, we can lecture whoever, but we
understand our responsibility and we have a sincere desire
to take part in resolving global and regional problems,
in situations, of course, where our involvement is fitting, wanted
and needed.
We do not want confrontation with anyone. We have no need
for it and neither do our partners or the global community.
Unlike some of our colleagues abroad, who consider Russia
an adversary, we do not seek and never have sought enemies. We need
friends. But we will not allow our interests to be infringed upon
or ignored. We want to and will decide our destiny ourselves
and build our present and future without others’ unasked
for advice and prompting.
At the same time, we desire well-intentioned
and equal dialogue and we affirm the principles of justice
and mutual respect in international affairs. We are ready
for a serious discussion on building a stable system
of international relations for the 21st century.
Sadly, the decades that have passed since the end
of the Cold War have been wasted.
We support security and development opportunities not just
for the select few, but for all countries and peoples,
and we support respect for international law and global
diversity. We oppose any monopoly, whether it be a claim
to exceptionality or attempts to bend the international
trade rules to suit one’s own needs, limit freedom of speech and,
in fact, introduce censorship to the global information space.
We were always reproached for supposedly imposing censorship here
in Russia, but now we see that others are taking this road themselves.
Russia is proactive in promoting a positive agenda
in international organisations and informal associations, including
the UN, the Group of Twenty and APEC. Together with our
partners we also promote our own frameworks, such as the CSTO, BRICS
and the SCO. Further strengthening cooperation within
the Eurasian Economic Union and with other CIS countries has always
been a foreign policy priority for Russia.
Russia attaches great importance to the idea
of building a multi-level integration model for Eurasia
in the form of a Greater Eurasian Partnership. We are
already discussing this idea on various international and regional
levels. I am confident that we can have conversation with
the European Union countries, where the demand for political
and economic independence is currently on the rise. This is what
we see judging by election results.
There is great potential for Russia in terms
of cooperation with the Asia-Pacific region, as we saw
at this year’s Eastern Economic Forum. I ask the Government
to make sure that all decisions regarding the development
of the Russian Far East are implemented without exception. Let me
reiterate that Russia is proactive in its Eastern policy not because
of any momentary considerations we may have, not because of the cooling
in relations with the United States or the European Union,
but for the reason that it serves Russia’s long-term interests
and is consistent with the global development trends.
In today’s challenging environment, the comprehensive
partnership and strategic cooperation between Russia and China have
become one of the key factors in ensuring global
and regional stability. This partnership can be regarded
as a model for shaping a world order free from
the domination of a single country, no matter how strong it is,
and taking into account the interests of all countries
in harmony.
Today, China is about to become the world’s largest
economy, so it is very important that every year adds new large-scale projects
in various areas, including trade, investment, energy and high
technology, to our mutually beneficial cooperation.
Developing a special privileged strategic partnership with
India is another major foreign policy priority for Russia. In October
2016, Goa hosted Russian-Indian top-level talks, confirming that our countries
have great potential for strengthening cooperation in a number
of areas.
Russia also expects to achieve substantial progress
in relations with Japan, our eastern neighbour. We welcome
the commitment of the country’s leaders to promote economic
ties with Russia by launching joint projects and programmes.
Russia is also ready to work with the new US
Administration. It is important to put bilateral relations back
on track and to develop them on an equal
and mutually beneficial basis.
Cooperation between Russia and the United States
in addressing global and regional issues will benefit the whole
world. We have a shared responsibility to ensure international
security and stability, to strengthen non-proliferation regimes.
I would like to emphasise that
attempts to break the strategic parity are extremely dangerous
and can lead to a global catastrophe. We must not forget about
it even for a second.
I certainly count on joining
efforts with the United States in the fight against real rather
than fictional threats, international terrorism being one of them. That is
the task our servicemen are fulfilling in Syria. Terrorists have
suffered significant losses. The Russian Army and Navy have shown
convincingly that they are capable of operating effectively away from
their permanent deployment sites.
By the way, we also appreciate
the work that special services and divisions are carrying out inside
the country to combat terrorism. We have suffered casualties, too.
All of that is certainly in the focus of our attention. We
will continue this work. I want to thank all of our military
for their professionalism and dignity, their courage
and bravery, for the fact that you, Russian soldiers, cherish
your own and your country’s honour.
Colleagues,
When people feel they are doing
the right thing, they act in close solidarity, and advance with
confidence along the chosen path. In recent years, we have had
a hard time, but these trials have made us even stronger, truly stronger,
helped us better and more clearly define those areas in which our
efforts must be even more persistent and vigorous.
While overcoming the current
difficulties, we have created a foundation for further movement
forward. We never stopped working on the development agenda, which is
extremely important. That is, we did not get bogged down in some trivia
of the day, like dealing with survival issues, but we thought about
the development agenda and contributed to it. This agenda is
coming to the forefront today.
The country’s future depends
on us, on all our citizens’ work and talent, on their
responsibility and success. We will certainly achieve our goals, resolve
the challenges of today and tomorrow.
Thank you very much.
(Anthem of the Russian
Federation.)
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