Vladimir Putin answers questions from government pool journalists

Transcript of the conversation:  
Question: What, in your opinion, was good about the past year?
Vladimir Putin: The good thing is that we did all we promised to do, including for the victims of fires. This is potent proof of the country’s potential. When under pressure, we can do it. As I’ve said before, we have the financial strength and we can deploy our administrative resources as well. I liked the way everybody worked to complete that task. They did a great job – honestly – the regional leaders and the builders. Frankly, it was great to see how these people were giving their all. Plus there was a positive public reaction and that is also important.
Question: I am sorry, was this effort on manual control, which of course is necessary at a time of crisis, or were all the governing levels performing as they should on their own? Were you aware of their commitment at the time?
Vladimir Putin: Once they got their act together, I felt it immediately.
Question: Were cameras necessary to make them work expediently?
Vladimir Putin: That may be so. It was a tool to influence everyone involved, it contributed to the results. Actually, I didn’t invent anything. This is what the IAEA does; it sets up web cameras that operate around the clock. If a camera is switched off it is treated as an emergency and an IAEA commission is sent to the site.
Question: In other words, you will make it a practice here?
Vladimir Putin: You know that this was also an emergency situation. It called for hourly monitoring. I actually did the monitoring and watched. I came every morning, pressed the button and then clicked the mouse to see what was happening in the regions. In several cases I looked at new sites and I saw that there was action, people were walking, builders were moving around on scaffolds, but on other sites there were no moving vehicles, and there was silence, everything was at a standstill.
Question: On the eve of your arrival I also watched the cameras. The place you were heading for was a scene of horror during the night: rescue workers were suspended from the roof…
Vladimir Putin: You know, it is not only fear that drives people, sometimes it is conscience. And the builders in particular and experts were really eager to help people and they did it. So I give a toast to all those who did their job this year against all the odds: To you. You also had a hard time this year: you travelled a lot and moved about, so it was a year that counted for two as far as you are concerned.
Question: The next year promises to be very much the same.
Vladimir Putin: Like working on the frontlines. First of all, I would like to thank you for your cooperation. I hope you too found it interesting and useful, because we have been to many parts of our country together. It’s a large country, and you saw firsthand what we are doing and how, and you witnessed what was accomplished and what was not. Most importantly, of course, I would like to thank you for the information support, for your unbiased assessment of everything that took place in the country, everything that the government does. A happy new year to you.
Remark: Thank you.
Question. Everybody is worried because we have the uncanny habit of greeting every new year…
Vladimir Putin: One should get rid of bad habits and traditions.
Question: We were just wondering about the chances for avoiding energy problems this year? There are no signs of anything like that, are there?
Vladimir Putin: There is a chance, but I don’t know whether it will become a reality. In any case, today we have agreements with all our main partners to work in keeping with the understandings achieved. We have contracts with all our main partners, with our neighbours (Ukraine and Belarus) we have effective contracts which have been signed and have been honoured so far. We hope it will be the same from here on out. We have done much to meet our partners halfway, we have done a great deal for them and it cost us quite a bit. As you know, we paid Ukraine a huge sum of money for the Sevastopol base and we will go on paying. We are discussing various options for our work in the future. You are aware that I have proposed a merger between Gazprom and Naftogaz of Ukraine. I think it is a worthwhile idea. If you put emotions aside and do some calculating… yes, it is true that in the event of a merger, Naftogaz of Ukraine will be a minority shareholder, but it will be the largest company in the world, in which Naftogaz will be represented and will have a serious voice which will always be heard, as it will be a united company. After all, Naftogaz is the largest transporter of our gas to our European consumers. Therefore, if we grow in general, they will be a part of the joint work, including production. They have a lot to gain, that’s one thing. Second, of course we will develop our transportation potential via Nord Stream, South Stream, to the Far East and to the North. We have positive and ambitious multibillion rouble plans. There is a lot of work to be done toward the south, toward China.
Question: Economic results were reviewed today, and looking ahead… What would you say to a possible transition in the future to a free-floating rouble? When do you think that may happen?
Vladimir Putin: The economy must be ready for it. Of course, that is a good thing: it makes the economy more mature and able to react to developments in a more flexible way. If we look at the peak of the crisis, late 2008 and the first quarter of 2009, if we had had a free-floating currency it would have “flown away” at once and people would have woken up, like in 1998, in a new economy and a new life, with no money in their bank accounts. We have prevented this. Yes, we have suffered some losses: our sovereign wealth reserves have become more modest, but they are being restored, they already stand at 500 billion. So, this is the price we have paid for stability in the country and for social justice. It was a justified measure under the circumstances. But over time, of course, as the economy matures and becomes more stable and more market-oriented, there will be more balances inside the economy, people’s incomes and savings will be different and then we would be able to gradually move on to this.
Question: So, it would be desirable?
Vladimir Putin: This is a desirable future perspective.
Question: But not in the short term?
Vladimir Putin: We shall see. Everything depends on how the economy develops. Certainly it won’t happen tomorrow. But we must move in that direction little by little. We have discussed this many times with the Central Bank. We have a common position.
Question: In the light of recent events do you think political destabilisation in the country next year is a possibility?
Vladimir Putin: Who is interested in this?
Remark: There are some influences… You know that these influences…
Remark: What happened on Manezh Square...
Vladimir Putin: I am not aware of these influences? What is it?
Remark: So this is unlikely?
Vladimir Putin: I hope it won’t happen. What is the point? Nobody needs it.
Remark: Opposition, football fans, other groups…
Vladimir Putin: Football fans a) are not opposition; and b) they are not homogeneous. Basically these are people who are into sport. If they don’t play sports themselves, they follow sports. You know that this is a European trend: radical elements try to blend with sports fans, use them as a ram like the Teutonic knights used the “pig” formation to break enemy ranks. Of course, they are young people, but they are not brainless. I hope they understand that somebody is trying to use them. I will say that when fans are united they never permit this. On the whole, they have always stayed out of politics and not allowed themselves to be manipulated. I hope that common sense will prevail this time too.
Question: There are many social programmes and you referred to them today as successful. Is it possible that they will be curtailed once the elections in 2011-2012 are over?
Vladimir Putin: No. Why should they? Look, for ten years we have been consistently moving from one stage to the next, step by step. In fact, in launching new programmes we always proceed from what has been planned and done previously. I have discussed this with Dmitry Medvedev just today. In his address this year the president spoke about motherhood and childhood and devoted much time to schools and education. But we already had in place national projects, including one in the field of healthcare. We had deployed a huge demographic programme. So, basically it is yet another step in the direction which we had named as a priority earlier. I hope we will go on moving in that direction. We have a programme for the development of the country and its economy until 2020. You will find everything written down in that programme. We are proceeding in the framework of that programme.
Question: In 2004 and 2008, on the eve of elections, there were major changes in the cabinet. Do you feel that the same will happen in 2011?
Vladimir Putin: In principle, it is undesirable. It may or may not be done. Better to do it after the presidential election when the new government is formed. To form the entire government, to show to society and to the nation the people who will implement the plans that already exist and that may be formulated in part in 2011.
Personalities matter, especially if we talk about the government; the economic views of the people who are implementing economic policy do matter.
Question: What about elections? You have said many times that what is needed now are concrete deeds. And regarding elections, will you run? It is a question for the future. When will you be able to make your decision or announce it?
Vladimir Putin: As both Dmitry Medvedev and I have said repeatedly, we will do it together. We will consider it together and see. It is too early to discuss it now. You understand that as soon as you start talking about it people will stop working. We don’t want to see that happen.
Question: Why?
Vladimir Putin: Everybody expects changes and reshuffles.
Question: Will you head up the United Russia electoral ticket in 2011?
Vladimir Putin: I have already said that I don’t rule it out.
Question: So, you have not yet made a definite decision?
Vladimir Putin: Not yet.
Question: Regarding elections, not here, but in neighbouring Belarus. These were controversial elections which met with a mixed reaction.
Vladimir Putin: A mixed reaction where?
Remark: A mixed reaction in the media, a mixed public reaction, both in Belarus and in Russia, because protesters were dispersed rather brutally. At the same time, assessments vary as to whether or not the elections were legitimate. I understand that considering your official position you are not free in your assessments…
Vladimir Putin: If you understand this then why ask me?
Question: Perhaps you can tell us as much as you can on this, and assess the elections in terms of whether they met the standards of a democratic society?
Vladimir Putin: I did not follow these elections. But the number of votes speaks for itself. We have to respect the choice of the Belarusian people. As for assessing what accompanied the elections, I am not prepared to comment on that. That calls for a closer look into the details.
Question: There are still some things I don’t know. During your video phone-in…
Vladimir Putin: What are you saying? Sometimes when I read, I feel that you know everything and that you are even holding some things back.
Question: During your live phone-in you said that you yourself had picked the question: “Are you not ashamed?” and replied that you were not ashamed. Obviously, you knew the implications of that question and what it was that you were not ashamed of. But could you explain more clearly what you don’t feel ashamed of?
Vladimir Putin: Yes, of course. If we look at what is within the competence of the government, you may or may not be ashamed of this, of what constitutes the immediate duties. I would like to repeat what we have said before: unemployment and measures against it are among the critical social indices of the work of any government in the world. 1.2 million new jobs, or even more, according to the latest statistics, have been created. An indicative figure, isn’t it? The number of people living beyond the poverty level has dramatically reduced in Russia – even despite the crisis, when so-called developed market economies in Europe cut pensions and wages several-fold. We have not merely avoided this – on the contrary, we are steadily increasing and indexing all social grants. We have increased pensions by close on 40% this year! What have I to blush for?
However, there are problems that might have been solved quicker and more efficiently, as we have said, for instance, the system of state guarantees of loans to the real economic sector at the beginning of 2009. To be honest, I said then that the system would not work to great effect. However, my colleagues insisted that it would work. I do not want to shift the blame on anyone now – but it did not work, in the final analysis. On the whole, the arrangement brought some fruit over a year or a year and a half. Still, we would like it to be more rapid and effective.
Then, many were apprehensive of and prejudiced against our measures to support the banking sector. Really much was said about it! Practice has shown, however, that it was the right thing to do. We channelled more than two trillion roubles into the banking sector. Was it much? Yes it was, but no banks were ruined, with slight exceptions, and we acquired the banks that were in dire straits for token sums and so prevented their bankruptcy. What are we doing now? We are restructuring those banks. I have already quoted the figures: 98% of the two trillion allocated by the Central Bank has been repaid. Only four banks have not reimbursed the money – one, Mr Sergei Pugachev’s known bank, and another three. However, first, this does not mean that the money is lost: the government and the Central Bank will track down assets worldwide, if need be, and regain them. Second, the bank has earned 150 billion while unpaid debts make mere 48 billion. The bank made 150 billion profit on interest and repayments.
As for VEB, it began purchasing shares in the falling market and so backed it up and prevented these shares from final plummeting. Then, when the market started rising again, it began selling these securities piecemeal, very discreetly, and made $400 million on them. Was it bad? We spent half the money to support the reduction of mortgage interest rates, which was thoroughly considered at every stage, in a situation that was rather complicated due to restrictions that were, generally speaking, connected with finance. There are also restrictions here. Still, we dared reduce interest on one, two and three occasions – and we were success! We did it, don’t you see?
Question: As far as I understand, you can be not only persuaded but forced into a move you consider wrong, and everyone sees later that you were right. Is that so?
Vladimir Putin: Why forced? We have people bearing direct responsibility for decisions. True, the prime minister and the president are held responsible for everything, in the final analysis – but there are people directly supervising one sector or another. They are considered top experts though there is a president and a prime minister. These experts are regarded as topmost leaders in a particular field, and we reckon with them.
Question: Do you occasionally have no final say?
Vladimir Putin: Never. The final say is up to us but we agree with experts.
Question: Mr Putin, allow me to ask two questions about one instance and your general opinion of it. The Auditing Chamber announced yesterday that a huge sum of 202 billion roubles had been misspent on road construction in Moscow. Minority shareholder Navalny recently came up with sensational accusations of Transneft. Are you abreast of the situation? Do you know that about $4 billion has been as good as pilfered during the construction of the Eastern Siberia-Pacific Ocean pipeline? If you have something to say about the pipeline and Transneft, say it please. On the whole, my question is: how can Russian officials who have government money at their disposal be made more…punctual, let say? How to change the situation?
Vladimir Putin: It is a matter not so much of punctuality as of using the latest methods of contracting and access to government money. After all, we are efficient enough in introducing online auctions. Speaking of which, Law No. 94, so much discussed now, is far from perfect and has ample room for amendment. The cabinet is thinking about it. The Ministry of Economic Development and the Antimonopoly Service are working together to improve it. But, good or bad, this law is an anti-corruption tool. You must have heard that it helped us occasionally to drop bids by 300%, believe it or not, from the start of an auction to its finish. So we will go on improving such tools. Online auctions are surely very effective. As for particular instances, everything must be checked, see? I cannot now say anything precisely about the Eastern Siberia-Pacific Ocean pipeline and how much has been spent on it. But let us not forget that suspicions do not come out of thin air. Construction costs differ from site to site. But there is nothing in the area where the pipeline is being built – no roads, electricity and water, so construction might be very expensive there. It has to be checked. If the Auditing Chamber thinks that costs are bloated…
Remark: Not the Auditing Chamber. There is merely a paper concerning the pipeline, which a minority holder has made public. Probably some information has come his way…
Vladimir Putin: A minority shareholder always has his interests – larger dividends or anything else. Every instance requires a check, even if it involves only a dissatisfied minority holder. We know, and I repeat it once again, that minority holders are always after larger dividends. However, a check is necessary. Let the prosecutor’s office and other inspecting agencies, of which we have enough, make it. We will have an all-round inspection. It concerns road construction, too. We must see.
Remark: All these are serious problems. The situation is really tangled…
Vladimir Putin: You see, road and other construction businesses are always open to corruption but we should never make unfounded accusations. We must look into every detail. Take construction. There are different estimation standards in Europe and Russia. Look how they make estimations in Europe. Do they proceed from the width of the road or from anything else? Have a close look! We will make conclusions only after we see it all for ourselves, and prosecute and punish culprits. If their fault is proved, they must be necessarily punished. Such matters should be carried through to verdicts of “guilty” when there is pilfering and other misdemeanours. But no one should be victim to unfounded accusations. Let us not forget about presumption of innocence. Or are we to treat all people in this country as thieves?
Remark: Mr Putin, you mentioned START ratification in your address today, and said that it…
Vladimir Putin: I think it is indisputable foreign political success of President Medvedev.
Response: But you said that ratification will bring closer our domestic social and economic goals…
Vladimir Putin: Not ratification in itself but as a critical part of our relations with the world because friendly environment is one of the pivotal factors of peaceful and sustainable domestic development.
Question: Do you trust your American partners more?
Vladimir Putin: More and more and more. My trust in them is getting ever stronger. Not that it has reached an absolute so far but it is growing...
Question: Russia expects to join WTO next year. Are we to see it as another confidence building step? Or are there problems, as you said today?
Vladimir Putin: There are problems, really, but we should expect it all the same. But then, what does “should expect” mean? We have had long negotiations with WTO, and have coordinated almost everything with it. I have no idea on what grounds Russia might be denied admittance now. But then, if someone is very anxious to deny us admittance, some pretexts may be found.
Question: When we were accompanying you on trips, you said at many industrial plants that car customs duties are growing…
Vladimir Putin: There are problems yet, as I told you. But then, these problems have solutions. There are problems with cars and especially trucks because our partners in the United States, China and Europe have much tougher tariff shelters in the aspects they find relevant than what Russian laws demand. Still, we can invent the ways to protect ourselves if we really want it – and we do want it. So if we see that our automobile industry is victim to unfair competition, we will find how to protect it.
Question: How?
Vladimir Putin: Through nontariff measures, though they are stipulated by so-called technical regulations, which all WTO member countries comply with.
Question: Do they come under regulation too?
Vladimir Putin: Not quite: they have loopholes one can use.
Question: Our Kyrgyz colleagues have quite recently said they want to join the Customs Union. Other former Soviet republics are also getting eager to do so, which means that the Customs Union is gaining in influence. What if WTO will get reluctant again to admit us for this reason? It’s an open secret that the establishment of the Customs Union hinders the process.
Vladimir Putin: On the contrary, the establishment of the Customs Union not hinders but promotes our joining WTO, believe me. There are several reasons for it. First, our colleagues see that though we are willing to join, we can also do without WTO. They are also eager to see Russia among countries that use unified economic rules and interpret them similarly. So they are pacing up the process of Russia’s admittance of their own free will. That is why the establishment of the Customs Union speeds up, not brakes down, our movement to WTO. So much for my first point.
Second, the Customs Union and the Common Economic Space are arranged on WTO principles. So, even though Russia is not yet a WTO member, it has approached WTO closer in terms of economic practice. More than that, Belarus and Kazakhstan have the same stance in their economy, so WTO members will find partnership with them simpler now. That was why when I was in Germany, I said to many of my friends (I started many friendships there over the years): “You needn’t be apprehensive about the Customs Union and the Common Economic Space, which we have established. You’d better thank us. Go to the shop for a bottle of Schnapps, quick!”
Remark: Did they?
Vladimir Putin: Not that they did but they wanted to pour me a glass.
Thank you very much! Happy New Year!
Response: Happy New Year!
Response: May next year be not so tough on us!
http://premier.gov.ru/eng/events/news/13668/