Wednesday, March 22, 2017

Meeting with President of South Ossetia Leonid Tibilov.

Vladimir Putin received President of South Ossetia Leonid Tibilov at the Kremlin. President Tibilov is in Moscow at the Russian President’s invitation.



The discussion focused on the prospects for developing bilateral relations, primarily in the socioeconomic field, and the upcoming elections in the Republic. Also addressed were security issues in the Trans Caucasus Region.

* * *

Russian President Vladimir Putin:

Mr. Tibilov, I am very glad to welcome you here.

Russia and South Ossetia have built truly allied bilateral relations. We develop our relations on the basis of our basic Treaty; in addition, we have signed documents on various sectors – all of them are being implemented, on the whole.

As always in a large-scale effort, there are issues that require our special attention. We are generally pleased that the situation in your country is stabilising. We can even say it has stabilised now.

Along with issues of security and greater defence capability, the agenda certainly includes socio-economic issues such as improving the standard of living. I think we will mainly concentrate on this during our conversation today.

I am referring to the most important domestic political event, the presidential elections in early April. By the way, I wish you good luck. I hope the voting will proceed in accordance with the current constitution, in strict compliance with the laws of South Ossetia, and will ultimately lead to a new, favourable environment for development.



President of the Republic of South Ossetia Leonid Tibilov:

Good afternoon, Mr. Putin. I am happy to have this opportunity to meet with you.

First of all, I would like to note that since March 18, 2015, when we signed the Treaty on Alliance and Integration, we have developed a tradition to meet almost annually to discuss various aspects of the bilateral agenda, including, of course, our alliance and development, as well as integration between South Ossetia and Russia.

Today, I would also like to say that major and successful work has been done over these two years to implement the Treaty: it is filled with new agreements, many of them are already in effect, and the people have already felt the results of these agreements. You know, these agreements are not just about a specific area of work: they also mean security, confidence in the future, continuation of work on the country's socio-economic development, and cooperation in the humanitarian sphere.

I often recall our first meeting, when I just started working. I remember that I spent a month in office, and the picture that I had ‒ the state of affairs in South Ossetia ‒ was, of course, appalling. Five years later, summing up the results, I can say responsibly that with the full-scale assistance provided by the Russian Federation, South Ossetia has changed for the better.

I can specifically say that the city of Tskhinval, the capital of our republic, and other towns and villages and regional centres have changed, and the people already have a different outlook on life, whereas our interaction and cooperation with our colleagues from Russia and relevant experts in numerous programmes, including investment programmes, has yielded a tangible result.

Today, we can already talk about hundreds of square metres of new buildings, new roads and social facilities in our republic. These are all tangible results. Of course, we owe all of that to great Russia.

Mr. President, I would like to express my gratitude to you personally for the trust that I received over the years. Today, I can confidently say that all the help that went to South Ossetia always found its target. This, I believe, is important, and I always considered this to be the most important thing in my work. Thank you very much.

I wish good health and prosperity to great Russia!

Vladimir Putin:

Thank you very much.

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Link: http://en.kremlin.ru/events/president/news/54082

PHOTO:
Vladimir Putin.
Russian President Vladimir Putin at the meeting with President of South Ossetia.
President of South Ossetia Leonid Tibilov.
President of South Ossetia Leonid Tibilov.
Vladimir Putin and President of South Ossetia Leonid Tibilov.
Vladimir Putin and President of South Ossetia Leonid Tibilov.

Council for Strategic Development and Priority Projects meeting.

Vladimir Putin chaired a meeting of the Presidential Council for Strategic Development and Priority Projects at the Kremlin.

Participants in the meeting reviewed progress in the implementation of priority projects in healthcare, as well as measures aimed at enhancing labour efficiency.

Russian President Vladimir Putin.
Russian President Vladimir Putin.


 Transcript of the meeting of the Council for Strategic Development and Priority Projects.

President of Russia Vladimir Putin:

Good afternoon, colleagues,

This is the Council’s first meeting in 2017. We will focus on issues that directly affect the quality of life and wellbeing of families in Russia, and are vital for the emergence of a strong, competitive economy. We will consider the development of healthcare, as well as issues related to enhancing labour efficiency.

I will start with healthcare. Over the recent years, substantial progress has been achieved in this area. Of course, life expectancy is a key indicator. It has now reached 72 years. Let me remind you that life expectancy increased by 6.5 years over the past 12 years, from 65.4 in 2005 to 71.87 in 2016. Men now live 7.7 years longer on average and women 4.6 years longer. As you know, over this period infant mortality declined from 10.2 to 6 per 1,000 births, and stood at 5.1 in January 2017. As for maternal deaths, the figures are even better, since the mortality rate dropped more than threefold.

An effective maternity and childcare system has been created, and medical facilities have benefited from significant upgrades alongside the development of high-technology medical care.

I would like to remind you that the number of patients who received high-tech medical assistance increased from 60,000 in 2005 to 963,100 in 2016, or nearly 15-fold. The number of medical facilities that provide such assistance has increased more than 10-fold, from 90 to 932.

We must definitely keep moving forward. We have the conditions to increase life expectancy in Russia to 76 years by 2025 and to considerably reduce the mortality rate among the economically active population.

I would also like to point out a few elements that give cause for concern, such as an increase in the death rate among the economically active population in 2015. The increase was not critical, but we must take note of this nevertheless.

For the situation to continue developing in the right vein, we must create a modern healthcare system at all levels, from elementary facilities to federal clinics, a system that will meet the highest international standards.

We must admit that there are still many unresolved problems, despite the positive changes. People say rightly and with good reason that there are not enough doctors, especially in small towns and villages. It is not easy to make an appointment with specialists or to have a medical examination quickly, and front desk employees are often unfriendly. In the Address to the Federal Assembly, I spoke about installing computers at healthcare facilities but this is only the technical aspect of the problem.

I would like to say again that we not only need to connect outpatient clinics and hospitals to the internet, but also to create conditions for people to make appointments with specialists and undergo medical examinations quickly and calmly, including senior citizens who have little knowledge about information technology and electronic records. If we do this, our doctors will have less paperwork and more time for their patients, for improving their professional skills or for receiving online assistance from their colleagues at regional and federal healthcare centres.

We need to elevate the prestige and status of medical workers, improve their financial well-being and safety net, including legal protection. Just like education, healthcare is more than a service, since the work that doctors and teachers do is vital to the future of the country and its people.

Let me emphasise that the key criteria for success in any project related to healthcare is to achieve the meaningful, tangible results that people expect: prompt and precise diagnostics and effective treatment, a considerate, human attitude toward patients, availability, quality and efficacy of medical drugs.

In the Address to the Federal Assembly, I spoke about the need to develop medical airlift services. This is about fair treatment and equal opportunity when it comes to accessing medical services across the country, which is especially relevant given how vast our country is.

Of course, we have to think long-term as well, and use the potential of Russian researchers to achieve breakthrough results in genetics, personalised medical care and biomedicine, Big Data processing, and the adoption of best practices at all levels of healthcare.

One more thing: it is important not only to treat people, but also to prevent them from getting sick and to promote a healthy lifestyle. We have to keep up our efforts in this area as well.

These goals and objectives call for effective management approaches, and substantial financial resources. I expect Ms Veronika Skvortsova [Minister of Healthcare] to make a detailed presentation on what needs to be done.

With regard to the second item on our agenda concerning labour productivity enhancement, clearly, this is a key issue that underlies economic growth. Notably, our targeted efforts have already helped us achieve steady productivity growth in certain economic sectors. For example, according to Rosstat, labour productivity in the aviation industry increased by 15.6 percent in 2012, 27 percent in 2013, and 29 percent in 2014. The figures for 2015 and 2016 are more modest, but overall, Russia’s productivity is generally less than 50 percent of the productivity of the truly efficient economies. Thanks to powerful progress in technology, this gap could drastically increase if we do not respond to it in a timely manner. According to the OECD, in 2015, the contribution of one worker to the GDP was $23.18 per hour in Russia, whereas in the OECD countries it was $46.53 per hour.

We need to increase labour productivity by at least 5 to 6 percent each year. These figures would be indicative of increased efficiency in the economy and at specific enterprises, the creation of modern jobs and decent wages, meaning that if we resolve this issue, personal income will also increase, and employees will be able to provide for their families and children.

Many professional opportunities will also open up to the young people who are just entering the labour market. Working with the regions, and with companies and businesses, it is imperative to build a clear-cut working system for supporting employment and labour mobility.

There must be one approach: if an old inefficient job is cut, then at least one new job must be created, both at major modern companies and in small businesses.

We realise that small businesses are of particular importance. Each person should be provided with an opportunity to get a new job or to open a business of their own, to improve their skills or acquire another profession; so it is fundamentally important that the programme designed to boost labour productivity is carried out in close coordination with measures to train personnel and promote entrepreneurship.

I propose testing this system in several regions within the framework of regional labour efficiency. The Government should select these regions and provide the necessary assistance. At the federal level, we should review the legal framework, remove obstacles to the development of a modern labour market and create additional incentives for companies to increase labour efficiency, modernise production and create new jobs.

We recently discussed this issue and related proposals from our companies at the Russian Union of Industrialists and Entrepreneurs. I ask the Government to analyse the situation jointly with our business associations, draft amendments to legislation and submit them to the State Duma without delay. As I have said, we must balance the task of increasing labour efficiency against the interests of businesses and the people. There is no question that the people’s right to employment must be protected in this period of technological revolution.

And lastly, I suggest creating a federal competence centre with assistance from our development institutions. It would promote the best international experience and the best Russian practices in enhancing labour efficiency and improving labour management. The idea is to optimise production and business processes and provide incentives for the workforce. Officials, including those from local governments, and company managers alike must learn these skills. I would like [Economic Development Minister] Maxim Oreshkin to tell us what the ministry thinks about ways to achieve these goals in all these areas.

Let us get down to work. Mr Skvortsova, you have the floor.

Minister of Healthcare Veronika Skvortsova:

Mr. President, colleagues,

Creating a nationwide patient-oriented system that unites all medical institutions regardless of their form of ownership or departmental affiliation, that operates under standard quality requirements, with access to medical care and medical worker skills, and that implements state guarantees for free medical care for the people based on social equality, is the main concept underlying Russia’s healthcare development.

This has allowed us, over the past five years, to achieve certain positive results in improving our healthcare system, primarily to form a modern system to protect maternity and childhood and to significantly reduce maternal, infant and child mortality rates. In 2013, we restored general preventive medical checkups and health screenings, which have covered 87.5 million adults and virtually all of our children.

This made it possible to significantly improve the early detection of diseases, while they are amenable to effective treatment. I would like to say that thanks to active cancer screenings, 55 percent of malignant tumours were detected in their first or second stage last year, which allowed us to reduce the one-year mortality rate to 23 percent and raise the five-year survival rate by over 53 percent.

In general, a specialised emergency medical care system has been built based on the creation and proper placement of medical institutions at the second interregional level, which includes over 540 vascular centres and more than 1,500 injury care centres. Over the past five years, the stroke fatality rate has decreased by more than 34 percent and that of traffic accidents by 20 percent. Since 2012, the use of high-tech assistance has tripled, and medical assistance has come closer to people's homes with 932 organisations now providing this assistance.

Importantly, over the past two years, in 2015 and 2016, the number of foreign patients coming to Russia for treatment at Russian clinics has surged by 87 percent to exceed 13,500 in 2016. Those patients came to Russia seeking services related to reproductive technology, orthopaedics, plastic surgery, cardio-vascular surgery, ophthalmology and dental care. Patients from more than 20 countries within and beyond the former Soviet Union were attracted by high-quality services and affordable prices.

At the same time, the number of Russians traveling abroad for elective treatment sharply declined: in 2016, the number stood at 80,000 people, or 0.002 percent of the 33 million people who receive similar treatment at Russian clinics. There were 60 percent fewer people seeking medical care in Israel, and 30 percent fewer people who travelled to Germany.

More than 2,000 new medical facilities were built, more than 20,000 facilities benefited from upgrades and 390,000 units of medical equipment were purchased as part of investment projects and programmes aimed at improving healthcare. That said, healthcare in Russia still has many shortcomings. A lot has yet to be done to overcome challenges and issues Russians face when seeking medical aid.

We have outlined five development priorities. First and foremost, we need to improve the accessibility of medical assistance. By working together with the Russian regions, by 2018 we intend to complete the roll-out of a three-level regional healthcare system based on a single set of requirements regarding the location of medical infrastructure using a special geographic information system, as well as based on single medical standards. This will include visiting doctor services for underpopulated communities with less than 100 residents. There are more than 80,000 facilities of this kind across the country. This way, maximum waiting times for obtaining various guaranteed medical services as per the government programme will be respected in all regions.

An issue of major concern is ensuring timely emergency medical assistance to patients with life-threatening conditions who live in remote areas with difficult climatic and road conditions. This is why the development of air-borne medicine is one of our priorities. The implementation of this project within two years will help seriously reduce the time of delivering patients to specialised medical centres.

The use of digital technologies can greatly increase the accessibility of medical assistance. Online appointments with a doctor and the online issue of prescriptions and sick leave certificates has proved to be very effective. In 2019, we will complete the development of a system of telemedicine consultations in various specialties for various groups of healthcare facilities, including basic national applied research and medical centres.
Starting in 2020, we will gradually introduce the system of electronic health monitoring for patients from risk groups. This involves using individual equipment that will measure their blood pressure, heart rate, blood glucose and other blood components, spatial location and other indicators, with emergency response in case of critical changes.

The next important development priority is the introduction of standard healthcare quality requirements across the country and the establishment of a quality control system. From 2014 through 2016, jointly with the National Medical Chamber expert community, we created a system of nationwide clinical recommendations for major health conditions. In order to help doctors adapt to the system faster, in December 2016 we finished an online directory of clinical recommendations and a search engine for diagnostic and treatment algorithms by key word and graphologies.

The system is being implemented across the country starting this year through doctor workstations, of which we already have 70 percent of the total required number. By the end of 2018, the clinical recommendations will be available in all Russian regions. In line with the clinical recommendations, we have developed criteria to evaluate the quality of medical care to be made statutory. Starting this July, all quality control reviews will be based on these criteria.

We set a high value on creating a comfortable and sympathetic environment at healthcare institutions. In 2015, we held the first Polite Reception national contest. The regions selected best reception practices at outpatient clinics and health centres and presented them at the federal level. These practices included comfortable offices, prompt appointments, call centres, appointment and information terminals, and information screens. The contest has become an annual event and has made a significant contribution to the expansion of a positive experience in the country.

Special attention should be given to our joint project with the Presidential Directorate for Domestic Policy and Rosatom experts, which is designed to increase the accessibility and quality of medical treatment by optimising technological processes at medical institutions and eliminating avoidable waste.

This technology suite has already been introduced in three regions and showed that it takes no more than four to five months to improve patient logistics, move away from using queues at medical centres, reduce waiting times at doctors’ offices up to 90 percent, double the time of direct doctor-patient interaction, create convenient conditions for regular physical checkups in one visit, and divide flows of healthy and sick patients.

We have already achieved some positive results at the first six reorganised outpatient clinics, and have now extended that experience to another 30 clinics. From now on, we plan to actively replicate this model across the country, across all federal districts and regions.

To help patients exercise their right to healthcare, in 2016 we began developing the position of insurance agents within the mandatory medical insurance system. Contact centres and text message alerts are being gradually introduced, along with ways to restore a patient's violated rights before any undesirable consequences occur.

This patient-oriented system will be introduced across Russia before the end of 2018. The development and implementation of new digital and biomedical technologies is of extreme importance. In 2020, the formation of a unified state healthcare information system will be completed on the basis of a single electronic medical record for each patient.

This will ease the introduction of electronic document flow and patients' personal accounts. Any patient will be able to access their account on the system from any computer, obtain the necessary information and excerpts from their medical documents, make an appointment with a doctor or contact the insurance agent.

The system will be enhanced with an archive of digital images. Intelligent programmes for automated reading of images with a drastic increase in diagnostic accuracy and speed will be implemented. We will introduce a system for automated analysis of the quality of medical care whereby the protocol for treating a particular patient will be run against the system’s standard protocols and quality criteria.

By the end of 2020, the system is to be fully integrated with information and analytical systems in mandatory health insurance and circulation of medicines and medical products, which will make it possible to conduct comprehensive analyses of the entire industry’s resource efficiency.

Thus, by the end of 2020, we will be able to reach an entirely new management level in the healthcare system, as well as continuity and healthcare quality. Beginning in 2020, according to current plans, automated programmes to handle big data will be introduced, which will make it possible to automatically select the best medical treatment protocol for each person with input from telemedicine consultations.

At the same time, personalised biomedical technologies will be developed. In the next three years, rapid genome sequencing technology will be introduced, which will allow us to create, by 2020, a unified system of biomarkers of major diseases, as well as modern technologies for monitoring human health and a network of high-tech centres for predictive, prognostic, and preventive medicine.

Starting this year, we will introduce regenerative medicine methods based on cellular and tissue technologies. By 2020, a network of biobanks, depositories and collections of biomaterials will be created, which will give a new impetus to developing regenerative medicine with the transplantation of autologous organs and tissues, that is, those obtained from the same individual.

At the same time, personalised pharmacotherapy will be developed, including targeted immune preparations for treating oncological and systemic autoimmune diseases; vector vaccines; gene therapy; and genome editing mechanisms. Biophysical solutions in the form of robotics, cyber prosthetics, various joints between human body parts and machine mechanisms will be introduced.

Sustainable progress in innovative medicine will be possible through the active implementation of the HealthNet and NeiroNet national initiatives, the development of research and education clusters at leading universities and national applied research medical centres, and also the opening of several new translational medicine centres in 2017–2018. We are actively using systems of target-specific innovative development and clinical testing to reduce the time needed for completing innovative projects and providing a clinical and economic framework for their implementation.

Medical staff is the main driving force of the development of our medical industry. We continue working to satisfy all regions’ real needs in medical specialists and nurses through the modernised system of training medical professionals. Its effectiveness reached 90 percent in 2016.

Advanced training is another key priority. We have created and approved professional standards for core medical disciplines together with the National Medical Chamber. Professional standards for specialists and nursing staff will be completed by 2019. Educational standards and programmes will be updated within six months of the adoption of the professional standards.

In 2016, we completed the creation of the National Register of Doctors and the unified portal of continued advanced training for doctors, which shows the individual trajectory of each doctor’s professional development. All doctors in this country will become part of the system by late 2021.

Also in 2016, we launched a project to gradually introduce a fundamentally new mechanism of licensing doctors based on certification by the professional community, in accordance with international standards. All medical professionals must receive this certification by the end of 2021.

Giving people a sense of responsibility for their own health is a major priority for us. To this effect, the comprehensive programme aimed at creating incentives for people to live healthy lives will continue: starting from pre-school and school age, children will take special educational modules developed in cooperation with the Ministry of Education and Science, and university students will be offered to join the volunteer movement and engage in sports activities by the Federal Agency for Youth and the Ministry of Sport. There will also be corporate programmes aimed at promoting and implementing a healthy environment at work in cooperation with the Russian Union of Industrialists and Entrepreneurs. Tobacco and alcohol awareness projects will continue, and so will healthy nutrition programmes and efforts to promote physical activity and sport.

The average life expectancy is to increase significantly by 2025 to at least 76 years by 2025 on the back of these priority activities. The average healthy life expectancy is to reach 66 years, infant mortality is to decline to 4.5 per 1,000 births, and the mortality rate among working-age people is to decline.

It has to be said that in 2016, a 3.5 percent decline was registered, from 546 to 517 per 100,000, and by 2025 we expect this indicator to drop to 380 per 100,000. By this time, the health industry will be one of the top sectors of the Russian economy. Russia has all it takes to become a leading player in biomedicine and digital medical technology.

Using clinical guidelines, some 3,500 medical and economic standards were developed to put a price on all medical services provided free of charge and to identify deficits in a number of areas. Additional investment is needed to proceed with new pilot projects.

We ask you to instruct the Ministry of Healthcare, the Ministry of Economic Development and the Ministry of Finance to carry out a joint analysis of all the necessary calculations to understand whether additional funding will be needed and where it can come from taking into account the projected tax adjustments. Investment in public health promises guaranteed returns for the national economy.

Thank you very much.

Vladimir Putin:

Thank you, Ms Skvortsova.

Everything you said is important, without question. I think all our colleagues and citizens find it interesting and important to learn about our plans and developments related to using high technology, genome research, the ability to influence the genome and use this knowledge to improve the health of our nation.

No less important is the current state of affairs in our healthcare system. Independent assessment of the quality of services provided by medical organisations is critical. Independent assessment is important in any sphere, including healthcare. How do you plan to achieve this? By using public councils at government bodies in the regions?

Veronika Skvortsova:

Yes, we will do so.

Vladimir Putin:

Just a second. You and I both know how public councils are formed. Often they are controlled entities whose creation makes no sense. We need other tools. They are out there. I am not going to focus on them now and waste our time, but there are many of them.

We need impartial, independent assessments. Please do not take a perfunctory approach. We do not need just areas of activity. What we need are specific results in each area. There are other issues as well, but I am simply asking you to pay attention to things that, I believe, concern our citizens the most. This is my first point.

The second thing is standards. We have been talking about standards for a long time now. Even the previous Government discussed them. We need to reconcile this with the economic wing [of the Government]. Again, we are sick and tired of discussing these standards, and we must advance to the greatest extent possible based on the current situation. It is imperative to move forward in this direction.

One more question, actually for Mr Manturov, about air-borne medical services. We have also discussed it many times: what aircraft will this programme use?

Minister of Industry and Trade Denis Manturov: Mr President, last year the Government decided to add capital in the amount of 3.8 billion rubles to the State Transport Leasing Company, which will be used to purchase Ansat helicopters, five of which have already been purchased by regional operators who will perform these services on orders of the regions. That is, the Ansat project is complete. Ms Skvortsova and I inspected it last autumn and accepted it for operation – this certified machine provides medical services.

Vladimir Putin:

How many years did it take to get there?

Denis Manturov:

It was certified in 2015.

Vladimir Putin:

We have more than just Ansat and Ka-226 helicopters. We need to speed this process up. What do five pieces of equipment mean for our country? Nothing. Zero.

Denis Manturov:

Mr. President, this is just the beginning. We expect that this year the Government will also assist us in increasing the capital of the State Transport Leasing Company in order to supply aviation equipment via operational and financial leasing. This applies not only to helicopters. Upon your instructions, two years ago a decision was made to launch the L-410, which can also be used as an ambulance at short distances of up to 500 kilometres. Therefore, I think that we have a good basis to build upon. Taking into account the decisions to develop air-borne medical services, there will be orders and equipment.

Vladimir Putin:

Where will the production facilities be located in our country?

Denis Manturov:

The Urals Civil Aviation Plant located in Yekaterinburg. Our colleagues already delivered the first two vehicles last year to the first customer, which is the Ministry of Defence.

Again, due to additional capitalisation of the State Transport Leasing Company, the first civilian customers will have their orders filled this year. Every year, the level of localisation will increase.

Vladimir Putin:

What is the final level?

Denis Manturov:

70 percent.

Vladimir Putin:

Fine.

Mr. Oreshkin, please.

Minister of Economic Development Maxim Oreshkin:

Mr. President, colleagues,

The current stage of development of Russia’s economy is marked by a difficult demographic situation that stems from the grave economic crisis of the 1990s and the aftermath of WWII.

Against this background, our labour market is experiencing two problems. The first is a rapid reduction in the number of working-age citizens. According to the baseline forecast by the Federal State Statistics Service, this figure is expected to decrease by 800,000 people per year from 2018 through 2020 and by 600,000 per year on average until 2024. The second issue is the reduced number of young people in the composition of the labour force, which seriously slows down the transformation of the labour market structure.

The Ministry of Economic Development has currently entered the final stage of refining the Government’s comprehensive action plan through 2025, which envisages a wide range of measures to accelerate economic growth and reach the global average. The measures aimed at increasing the size of the economically active population and reducing the level of structural unemployment play an important part in this regard.

Yet, it is obvious that increasing labour productivity should be the key focus for achieving higher economic growth rates, especially considering that the high level of so-called low productivity employment serves as a major reserve for our labour market.

We should note four key issues related to the persistent low labour productivity. The first is the low level of managerial and technological competencies required for a qualitative leap in productivity at problem enterprises. The second is underdeveloped mechanisms for project financing necessary for implementing projects to increase production efficiency. The third is the considerable number of barriers to productivity that appear not so much in the Labour Code as in the numerous industrial regulations that, for instance, pose redundant requirements which lead to the retention of redundant staff members. The fourth is, of course, the high social risks associated with mass layoffs and the often inadequate mechanisms for rapidly finding new jobs, re-training and training personnel.

Productivity, a priority project, is designed to address these problem areas, lay a solid foundation and create a managerial and organisational framework to focus the efforts of the business sector, the regional authorities and the federal Government on facilitating the development and implementation of programmes to boost productivity at specific enterprises. Regional productivity programmes are proposed for this administrative framework, which should ensure, first, the development and implementation of corporate road maps to boost productivity, and second, mandatory measures to provide employment to people who are made redundant.

What is the basis for corporate road maps? The first instrument here is the creation of what are known as centres of competences at the federal and regional level. A federal centre will form and maintain a generally accessible data base on modern managerial practices and technological solutions in various fields and also provide information about the successful projects to boost productivity at specific enterprises. The general availability of this data base is very important as it will make it possible to multiply the effect, including outside the enterprises involved in regional productivity boosting programmes.

The federal centre of competences should be built at Vnesheconombank (VEB), to which end the latter should receive additional financing. This centre will not only ensure the implementation of the productivity project but will also logically complement the project to create the so-called project financing factory that is being carried out by the Economic Development Ministry with the VEB managerial team. Regional centres of competences, which can be built at the existing development institutions, will coordinate the development and implementation of regional programmes and help enterprises draw up corporate road maps.

The second element in developing corporate road maps is the presidential managerial personnel training programme. It can be targeted, among other things, at training both regional teams under this project and managerial personnel at specific enterprises and participants in this programme.

It is important to note that Russia is seriously behind in terms of modern managerial practices, so there is the following proposal: to reformat one of the national economic forums in Krasnoyarsk into a managerial forum as a measure to intensify the sharing of best managerial practices. The venue could be rotated between Krasnoyarsk and Kaliningrad.

(Next, Maxim Oreshkin discussed issues related to the implementation of productivity boosting programmes, in particular, project financing, tax incentives, re-employment and retraining programmes for employees made redundant and support for labour mobility.)

No doubt, job placement efforts should be coordinated with existing federal and regional programmes, as well as with other priority projects, in particular fostering small businesses and facilitating the development of single-industry towns. The tools created as part of these projects will also significantly expand employment opportunities for employees made redundant or for starting their own businesses.

Regarding the organisational aspect of the matter, in the next six months we should address the following tasks at the federal level.

First, in close cooperation with the business sector, develop and begin to implement a road map on essential amendments to labour, tax and industrial legislation to remove barriers and incentivise efforts to boost productivity.

The Economic Development Ministry is organising this effort together with its colleagues in the Government, above all the Labour Ministry, the Industry and Trade Ministry and the Finance Ministry, as well as with business associations. Naturally, all these amendments will need to be made in close collaboration with our social partners.

Second, build a VEB-based federal centre of competences.

Third, lay the methodological and legal groundwork for regional programmes.

Fourth, ensure the signing of agreements with the regions and monitor their implementation.

Fifth, draw up a plan to expand the functionality of managerial personnel training programme.

Sixth, develop a programme to reboot employment services.

Seventh, clarify the set of financial and administrative support tools for the programme’s implementation.

Regarding the regional part of the programme, at the first stage, about five pilot regions could be selected that, during the first six months, should create regional development institutions and draw up regional programmes to boost productivity, within the framework of which enterprises should be selected for participation in this programme and measures spelled out to provide quality employment for redundant employees.

The project’s administrative structure assigns the role of the contracting authority to the Economic Development Ministry; the role of project supervisor in the Government will be assumed by Arkady Dvorkovich.

That concludes my report. Thank you.

Vladimir Putin:

Everything is correct and interesting, but teaching can go on forever and we know this. And it can be done in different ways. The most important thing, of course, is incentivisation, benefits and lifting legislative barriers, as you said, to boosting productivity.

Have you, together with the Finance Ministry and your other colleagues, worked on lifting these barriers, including tax incentives? Have you worked on this at the practical level?

Maxim Oreshkin:

These mechanisms will need to be finalised. This will in fact be the focus of our efforts in the next few months because, to reiterate, the most important thing is to ensure that these incentives lead to a positive budgetary effect, not to losing money.

Vladimir Putin:

Yes, indeed, ensure a positive budgetary effect. “Eliminating excess staffing regulations, including the impossibility of outsourcing a particular function”: Outsourcing is crucial. Surely you now that what happens is that outsourcing often amounts to the establishment of quasi-private companies that receive de-facto budgetary funds, and instead of outsourcing we have an increase in budget spending with an end result that is barely acceptable in terms of quality. It is not enough to simply write these things. We should proceed from the reality that we encounter when we attempt to organise this work.

As regards tax incentives, what does this mean? I would like to hear from Mr Siluanov. It is perfectly obvious that this is necessary. It is obvious to me that if we want to carry out all our plans, there should be incentives, and businesses should see the benefits from the introduction of new practices. This is the only way to make everything work. Teaching can go on forever, but if there are no incentives, nothing will happen.

Finance Minister Anton Siluanov:

Mr. President, in keeping with your instructions, we are working on a proposal to streamline the tax system and this will include a measure to boost productivity at enterprises. As such, naturally, we are considering incentives to create highly productive jobs and incentives for enterprises to modernise their production so as to reduce the number of employees and produce more and better quality goods with smaller numbers.

At the other end, employees who are made redundant will enroll on retraining programmes within our existing institutions. At any rate, we will use tax legislation to incentivise enterprises to invest resources in innovation and modern technology to boost productivity.

Vladimir Putin:

What is a tentative timeframe for launching these mechanisms?

Maxim Oreshkin:

I believe we should finish preparations by the end of the summer and in the autumn we will move forward with this in pilot regions.

Vladimir Putin:

Good. Thank you.

Ladies and gentlemen, are there any comments, proposals, considerations or questions on the agenda?

Please.

Deputy Chairman of the Presidential Economic Council Alexei Kudrin:

Mr. President, ladies and gentlemen,

The Centre for Strategic Planning presented its proposals and they were largely taken into account.     I support the main provisions of Ms Skvortsova’s report.

I would like to note in particular that it puts forward five priority projects. In terms of scale, what can be done by 2024 goes far beyond what has been done on national healthcare projects so far. The scope of change, including in the availability of technology and the quality of medical care for the public, will exceed everything that has ever been accomplished within a space of five or six years. These are the basic concepts.

I support these basic targets. I would like to highlight the possibility of transitioning to a healthy life expectancy. This is especially important for us because in the next 15 years, the younger generation, the 20–39 age brackets, will decline by 10 million. This is a demographic forecast and, practically speaking, a fact.

The number of people over 40 will increase by 3 million and the number of people over 55–60 – the pension age today – will also increase. In other words, the same GDP, and even a larger GDP, will have to be achieved with a significantly older working population. This means that we should approve – and this is what is in fact proposed – a concept of active longevity, which will set higher standards on medical care and specialist re-training standards. I believe all of this has been duly noted here.

I would like to add that we also suggested – and this is reflected in these materials – that this sector can significantly expand the range of its products, including export services. Even with small investments in this sector, relatively small, by 2024, $3 billion could be generated in additional export services. It will work to stabilise our foreign trade balance, which is less dependent on oil. This sector can also make its contribution.

I would also like to note that it is considered among the most innovative sectors in the world today. The volume of investment in R&D projects in pharmaceuticals and biotechnology is many times more than any other investment, even in defence research projects. So, the procurement of equipment and technological modernisation in this field essentially meets national demand, which generally makes the economy as a whole more productive.

So I also support the proposal to increase spending on medical care. Improving people’s health in terms of economic payoff (incidentally, this also boosts productivity) reduces the amount of sick leave taken and improves efficiency. Furthermore, this also provides absolutely new incentives encouraging innovative trends in Russia. To reiterate, this also provides new opportunities.

I could point out a few other things but they were already mentioned in general. For example, we believe that the number of pharmaceutical patents could be doubled, making a new contribution to technological development in Russia.

But of course, the most important thing is to intensify efforts with regard to healthy lifestyle, that is to say, investing in this sphere, which should be everyone’s concern, can substantially improve the health of the nation and, I would argue, also productivity. Plus, there is an array of sub-projects that were mentioned here and that involve better care for people with chronic conditions, including the provision of medicines, rehabilitation procedures and predictive medicine. Generally, we have also participated in drafting these projects, so we support them.

Vladimir Putin:

Good.

Please.

President of OPORA Russia public association of small and medium-sized businesses Alexander Kalinin:

Mr. President, ladies and gentlemen,

We believe that boosting productivity is crucial for the country’s economic growth. According to OPORA Russia experts, about 40 percent of time in industry is used productively, 20 percent is lost to the inefficient use of labour, 20 percent is spent on lunch and smoke breaks and 20 percent is lost as a result of low productivity.

With average wages in Russia at 36,000 rubles [a month], consumers today in effect have to pay over 2 trillion rubles a year for unproductive costs in industry alone. This also makes our goods less competitive (the figures are enormous) and in addition, does not make it possible to raise wages for people who deserve higher wages.

We believe that the main issue at the first stage, which does not require any budgetary appropriations, is efficient production organisation, which flourished especially during the Soviet days. However, it requires the involvement of company owners, managers and employees. To this end, three tasks need to be carried out: organisational, motivational and culturological.

Organisationally, we believe a national committee to boost productivity should be created, as in the majority of countries, which should be headed by a high-level statesman. For example, in Singapore, such a national committee is headed by a deputy prime minister and in Pakistan, by an industry minister. National committees include high-level regional officials. We agree that training centres should be established at the regional level to promote and teach about efficient production organisation.

In addition, a methodology to measure productivity and impose sanctions for distorting productivity reporting figures is formulated at the governmental level. A reserve of enterprises is formed that are willing voluntarily to join a productivity programme. There is an array of measures to incentivise them to join this programme voluntarily. What should these measures be, from our perspective?

First, compensation for interest, say, up to 5 percent, similar to what is now used by the Ministry of Agriculture. If an enterprise has joined a productivity programme and if it really boosts productivity and then takes out loans from financial institutions to procure technology, in this case, it is compensated for the interest, provided all the basic targets are met and this particular technology is in fact procured. The experience of the Agriculture Ministry shows that this mechanism is very much in demand.

Furthermore, measures such as tax deductions can be used. If productivity is measured in terms of the added value that an enterprise has additionally generated, that is, if the national budget has received additional tax revenue, only in that case can an enterprise receive a VAT deduction in the amount less than what it additionally transferred to the budget in the preceding period as a result of productivity boosting measures.

Culturological aspects should primarily involve promoting via the media the need to boost productivity within the framework of the state order, as well as the implementation of training programmes similar to the production organisation practices that existed in the Soviet Union. Furthermore, we consider it necessary to create about 100,000 new places at universities to train production management specialists.

To reiterate, a qualitative change in the situation can be brought about by involving in this process not only state administrators but also company owners, managers and employees on a mass scale, and we are willing to join it within the framework of our business association. However, this requires a state-level decision and it is wonderful that this matter has been included among our country’s strategic development priorities.

Vladimir Putin:

Thank you.

Mr. Roshal, please.

President of Scientific Research Institute for Emergency Children's Surgery and Traumatology Leonid Roshal:

Mr. President, first of all, thank you very much for the invitation.

I must say that the entire block that deals with healthcare – the Presidential Executive Office, the Federation Council, the Duma, the Government and the Healthcare Ministry – is working intensely, in endless discussions. This is certainly not boring. I listened to Ms Skvortsova and I must say – and I am not trying to be flattering – that I admire her. She has all the figures at her fingertips; her thinking is wonderful, strategic; she is a top-notch medical professional; and she does not rely on her aides, but generates new ideas on her own, in keeping with her convictions.

Sometimes we argue. True, we will get to personalised pharmacotherapy and regulatory medicine, to everything new that was mentioned in the report, [which was] perhaps not quite comprehensible, [with] a bit of wishful thinking. However, time, faith and optimism are crucial. She is sometimes criticised over the fact that, thanks to TV, when she meets with you, she talks only about achievements and not problems, and TV does not show her tears after Government meetings, when she comes out, unable to achieve what she wanted to achieve.

At the same time it is necessary to deal with a load of problems every minute, participate in endless meetings amid the lack of a single healthcare management system and the policy pursued by governors who are responsible for healthcare at the legislative level but pursue their own line.

Let us imagine for a moment that the armed forces were organised that way. How would Defence Minister Shoigu feel today? And we are even more vital than the military because every day, it is a matter of life or death, and this is why, for example, in many countries only doctors who are members of the medical community have license to practice medicine. The community is responsible for them and they are responsible to the community. Every year, they expel from their ranks those who have violated ethical norms or unified diagnosis and treatment standards. And this is why they are as good as can be. And what about us? If we want our results and the level of healthcare organisation to be as good as theirs, we need to raise healthcare spending to at least 5 percent of GDP. Not 10–15 percent, as over there, in euros, but at least 5 percent, in rubles, not 3 percent, as now. Of course, there is no understanding in this regard, as Mr Siluanov has repeatedly stated.

You know, today Ms Skvortsova reminded me of Vladimir Lenin with his GOELRO Plan [in the Soviet Union, the first unified state long-range plan for the national economic development]. Amid a plethora of problems, it was a kind of fantasy, but the plan materialised, until [Anatoly] Chubais came around. We understand the present situation very well. Let us dream at least. We need to ensure that the Russian people are satisfied with their healthcare system. The people are unhappy with personnel problems in the healthcare system or with the professional level of a ton of doctors even though there are some wonderful specialists that are every bit as good as their Western counterparts. The Ministry of Healthcare has never worked under such difficult conditions as today.

I do not fully understand how we still manage to improve indicators amid the ill-conceived optimisation. This is a separate issue. We clearly understand that the country is in a difficult situation and we are in the same boat. We make no secret of the fact that all of this is happening amid the general underfunding of the healthcare system, a growing shortage of qualified medical personnel at the practical level and outstanding problems related to medical student training and doctors’ qualifications.

By the way, we lack a coherent national programme to overcome the personnel shortage. “Some day” is just not good enough for the people now. Today, the situation at the primary care level is on the verge of disaster. We need such a programme. It would be a good idea to put this on our meeting’s agenda.

Another programme, without which progress is impossible and which should be formulated as a national programme, involves the entire sphere of professional medical activity that now falls within the purview of the Ministry of Healthcare and the National Medical Chamber, Russia’s largest medical association.

Generally, healthcare ministries in all leading countries do not deal with professional activity. All of this is delegated to professional organisations, which are responsible for specialist training standards. And we are grateful to you, Mr. President, for your instruction. Within the remaining eighteen months, a step-by-step transition to self-regulation of professional activity will be codified in law: step by step, without undue haste, carefully, so as not to make foolish mistakes. And we are asking the Duma to facilitate this process.

As a first step, together with the Ministry of Healthcare, we are working on a system of state public administration of professional activity. All the documents related to professional activity are being discussed with the National Medical Chamber as an expert community before being signed into law. This is good.

What have we been able to achieve by working together? We have overhauled post-graduate education. Education should be a lifelong process for a doctor, not the way things were done in the past when doctors were sent for training only once every five years. However, the system should be convenient for doctors, which requires legislative action. We are developing professional standards in all areas of activity in order to specify what doctors should know, and what skills they should master by the time they complete a graduate course or an internship. This was not the case before.

This has turned out to be a daunting task. Standards for 30 qualifications have already been drafted, and we expect this effort to be completed this year. Professional standards should relate to specific employment conditions. For this reason, we will have to continue our work for many years to come. I would like to take this opportunity to thank the Presidential National Council for Professional Qualifications chaired by Alexander Shokhin and the Labour Ministry for contributing to our efforts.

Professional standards are used to review educational programmes. At the same time, educational institutions should be properly equipped and baseline tariffs increased. The same goes for internships, since we are lagging behind in this area as well. Professional certification has gone beyond theoretical knowledge and now requires practical skills. We are now talking about a new approach to certifying professionals; accreditation commissions have been established in all regions where there are medical schools. These commissions are headed by representatives of medical associations from the National Medical Chamber.

What we want is for educational institutions to teach the profession, while we are in charge of professional certification. We made it clear that standards of the past had nothing to do with treatment and were no more than a pile of medical and economic terms. They had to be replaced by clinical recommendations, treatment protocols developed and approved under the law by professional bodies. There are currently more than 1,200 organisations of this kind. These efforts will carry on, and this provision should find its way into the law.

We have developed and are implementing the world’s best system for independent professional expertise based on an anonymous document workflow and extra-territorial principle. Make no mistake, all this should also be included in a special programme. We are working on these issues, but there are still challenges. I would like to ask you to ease the crippling administrative burden. We face fines for almost everything. No other profession faces this kind of pressure.

Let me repeat my personal opinion: we have to get rid of the unnecessary system of insurance companies that have latched onto our bodies and do nothing to improve the quality or accessibility of healthcare services. There are currently 12 insurance companies in our institution only. Each company comes when it wants, distracting us from work. This does nothing to improve the quality of healthcare. This is all just paperwork.

Mr. President, you said that it is important to create an insurance system. I agree. However, when I asked insurers what it is be like, not a single company was able to tell me what it means in today’s world. Please, Mr. President, we have to stop increasing salaries of medical workers by cutting staff. Mr. Siluanov does not want to hear about it.

Forgive me, if I said something wrong. Thank you for your attention.

Vladimir Putin:

Thank you very much.

Mr. Fortov, please.

President of the Russian Academy of Sciences Vladimir Fortov:

Like Mr. Roshal, I would like to thank Ms. Skvortsova, though not for her tears or for looking a bit like Lenin. I want to thank her for working so hard to introduce research achievements in medical practice. This is very serious work. We see a powerful effect from the joint work of the Academy’s medical, physical, mathematical and biological institutes.

The Ministry, the Federal Agency for Scientific Organisations (FASO) and the Academy joined forced to prepare a programme titled Physics in Medicine. The thing is that the ability to understand and formulate problems and to create equipment is very high in physics, as you know. The use of this ability in medicine offers new opportunities.

A few examples. Plasma that generates light in lamps is unique in that its electronic component is hot and its ion component is cold. This property can be used to effectively kill microbes that are resistant to antibiotics.

We worked with Ms. Skvortsova’s ministry to create a very effective device that employs opposite physical principles, which is nothing new. Take the femtosecond laser. Researchers can use it to emit extremely short pulses that need just one second to cover a distance that is one tenth of the thickness of a human hair. This offers fantastic opportunities in ophthalmology, cell management and in many other areas.

As a result of our work, we have created a programme, which I have recently discussed with you. In our opinion, this programme should be assisted, if possible, considering that it is a very far-reaching programme. Physicists would like to join it, too, which would bring together three components – agriculture, medicine and natural sciences – in one programme. And researchers from these three fields would work together. I am sure that this will help to make great strides in our work.

Vladimir Putin:

Thank you, Mr. Fortov.

Mr Repik, please.

President of Delovaya Rossiya Alexei Repik:

Mr. President, both issues we are discussing today are very important. Low labour efficiency is one of the biggest obstacles to implementing the task you have set of boosting economic growth. Since we are responsible for developing digital healthcare in the framework of the HealthNet roadmap of the National Technology Initiative, I would like to focus on the first issue, which concerns the priority healthcare project. What Mr Fortov has said here is very important, because new technologies, such as electronic data in medicine, are a graphic example of convergence between medicine and other sciences, in this case, information technology.

There is global competition between technologies, groups and even countries not in the field of data collection but in data processing and the implementation of its results. Ultimately, it is not data that is important, but the mechanism of taking medical decisions on the basis of an algorithm created by artificial intelligence. In this case, artificial intelligence uses the analysis process for self-learning. In other words, it uses a large amount of data for learning to divide patients into groups and identify the parameters that influenced the health of each patient.

Large amounts of information are fed into the system, and the better this algorithm is tuned (special teams established under the National Technology Initiative have both the necessary knowledge and also international patents), the better the solution it offers. Therefore, we need to create a data format – the quality of the data is extremely important, too – so that these algorithms will not replace the doctor but help him, like a microscope, which does not replace human eyesight but is an additional instrument for enhancing its ability.

We must take into account the development of new-generation sensors and feedback equipment, which promises breakthrough progress in the collection of medical data. Mr President, it is also important that broadband internet access will be available at all healthcare facilities by the end of 2018, in keeping with your instructions, and the system will become fully operational. This access is needed not only for hospital staff to play computer games, but for using the data we collect to make decisions that will improve our KPI (Key Performance Indicator). This translates into a higher life expectancy and a better quality of life in Russia, as Ms. Skvortsova said.

We will definitely reach these goals if we launch this system. In other words, I am in favour of using the competitive advantages of national medicine, of which there are many. For example, our Chinese colleagues have launched similar projects and invested millions of dollars in them, but this has not helped them create advantages comparable to those our classical medicine has, and so they are lagging behind us.

By the way, the growing demand for exporting our medical services indicates the high quality of our primary healthcare, something Ms Skvortsova talked about. In this context, I would like to ask you, Mr. President, to instruct the Healthcare Ministry to launch a pilot project with HealthNet (a Healthcare Ministry supported project) in several regions to collect qualitative data that we can work with, nothing casual, but something we can actually use in decision making.

Of course, considering the sensitivity of this information, we must be very careful when dealing with medical data. We can rely on the experience of Rostec that worked on the integrated state healthcare information system and came up with solutions that will be available to every doctor. These innovations will be helpful both for the Healthcare Ministry and the Government in making Russia a leader in this area, to improve the quality of life and to increase the life expectancy even beyond the 76 years that Ms Skvortsova mentioned.

Thank you.

Vladimir Putin:

Ms. Golodets, please.

Deputy Prime Minister Olga Golodets:

Mr. President, I would like to come back to the issue of productivity. I think today we did not discuss one important aspect of this. Productivity is an economic indicator. When technical upgrades and the automation of manual tasks can bring an advantage and profits, businesses will always adapt. We can see it in the reports.

For example, in 2013 when the insurance rate on hazardous workplaces was increased, the number of such workplaces started to decrease rapidly. Since then, the number of hazardous jobs has been reduced by 800,000. This is how many people were relieved from occupational health risk only because insurance rates changed.

The current situation with labour efficiency is largely attributable to the fact that we have fallen behind schedule we have set for increasing the minimum wage, because labour costs at the lower end of the scale were undervalued. For example, last year 28 million people, or about one third of the workforce, changed jobs. People can easily resign and find a new job. Unemployment has not increased. Our employment offices helped four million people find jobs, and the number of job openings was always above 900,000. The figure reached one million in certain periods, and was sometimes lower, always remaining above the 900,000 threshold.

For this reason, in order to sync these processes in terms of labour efficiency, we need to go back to the fundamental issue of increasing the minimum wage, as had been agreed. This increase would immediately solve the issue of low-productivity jobs. In this sense, we are ready to provide every assistance to retrain people in advance, so that they do not face any difficulties in this situation. Mr President, I would like to ask you to issue instructions to this effect, including to the Labour Ministry, because this is a key issue as far as productivity is concerned.

Vladimir Putin:

Very well, thank you.

I would like to thank all the colleagues who took the floor, primarily those who prepared today’s meeting and discussions.

Of course, healthcare and labour efficiency are essential issues, since there is no way we can move forward and there will be no development unless these issues are addressed. What matters the most is that the conversations we had, the great plans and initiatives that were presented do not remain in mid-air. It is for this reason that I asked ministers questions about their plans, future work in these areas, implementation and timeframes.

I ask Mr. Medvedev to report on this issue at one of our regular meetings that often take place without the media. I ask you to take this issue under your control in order to ensure that all deadlines are respected and all initiatives that were planned are implemented to an adequate standard.

Thank you very much.


Link: http://en.kremlin.ru/events/president/news/54079

PHOTO:
Council for Strategic Development and Priority Projects meeting.
Council for Strategic Development and Priority Projects meeting.

President of the Russian Federation Vladimir Putin.

Speaker of the Federation Council Valentina Matviyenko at the meeting of Council for Strategic Development and Priority Projects.
Speaker of the Federation Council Valentina Matviyenko at the meeting of Council for Strategic Development and Priority Projects.

Finance Minister Anton Siluanov at the meeting of Council for Strategic Development and Priority Projects.
Finance Minister Anton Siluanov at the meeting of Council for Strategic Development and Priority Projects.

Labour and Social Protection Minister Maxim Topilin at the meeting of Council for Strategic Development and Priority Projects.

At the meeting of Council for Strategic Development and Priority Projects.
At the meeting of Council for Strategic Development and Priority Projects.

Vladimir Putin at the meeting of Council for Strategic Development and Priority Projects.
Vladimir Putin at the meeting of Council for Strategic Development and Priority Projects.

Russian President at the meeting of Council for Strategic Development and Priority Projects.
Russian President at the meeting of Council for Strategic Development and Priority Projects.

Tuesday, March 21, 2017

Meeting with Natural Resources and Environment Minister Sergei Donskoy.

Sergey Donskoy briefed Russian President on measures to enhance the efficiency of subsoil resource use, develop a system of protected natural zones, and support eco-tourism.

Vladimir Putin.
Russian President Vladimir Putin at a meeting with Natural Resources and Environment Minister Sergei Donskoy.


President of Russia Vladimir Putin:

Mr. Donskoy, we discussed with you on many occasions the question of effective subsoil use. I know the Ministry has prepared a range of instruments, including work with licences. Let us talk about this now.

Natural Resources and Environment Minister Sergei Donskoy:

Yes, Mr. President.

Let me begin by saying that a new system for subsoil resource use began taking shape 25 years ago, with the adoption of the law on subsoil resources. Over this time, practically all of the discovered deposits have been distributed among subsoil users. The share of unallocated subsoil resources is 3 percent for diamonds, for example, around 5 percent for natural gas, 6 percent for oil, and 6.9–7 percent for copper. Today, we are shifting our focus from subsoil resource distribution to ensuring that resources are used effectively.

Let me brief you on what we have done over this time to resolve this task. Firstly, we have modernised and essentially put in place a new system of preparing and approving detailed engineering plans, in order to rationalise subsoil resource use. We have introduced a new classification for oil and gas, which conforms to the framework classification used by the UN. We signed the relevant document harmonising these two classification systems with the UN last autumn. We have set new rules for processing geological data, making it more accessible and rapidly updated. Acting on your instructions, we have updated licences, as I briefed you at an earlier meeting. We have now completed this one-off updating. We have covered 5,326 licences, of which 70 percent were updated, while the holders of the remaining 30 percent did not go ahead with updating, for various reasons. Those 30 percent are now under our special supervision.

I would also like to note that this updating enabled us to include in the licences clearer obligations that make monitoring more effective. Practically all licences now set deadlines for carrying out geological exploration, providing geological data, and much more.

Vladimir Putin:

These obligations have become more specific.

Sergey Donskoy:

Yes, more specific and clearer, and this means we can now continue our work to improve the supervision of subsoil resource use.

At the same time, we passed several laws that made it possible to provide subsoil resource deposits to resource users for geological exploration on declarative basis. When investment in geological exploration was falling all around the world (we estimate that it fell around 2.8-fold in the world), it stabilised here, and this is important, and we believe that the measures we took contributed to this. Investment coming in through this new system now comes to around 28 billion, which is comparable to state financing.

The time allowed for geological exploration has also been increased. In remote and difficult zones where more time is needed for exploration, we have made this possible. The timeframe has increased by 40 percent, from 5 to 7 years, on land, and exploration can now take up to 10 years offshore.

We have introduced economic incentives, particularly through eliminating excess costs and administrative barriers. We give users the possibility to correct technical mistakes in licences and change the boundaries of their licenced sections. The state expert evaluation of planned wells, which duplicated work already done, has been abolished. Extraction of associated components is now allowed (only for state companies for now, but as we pick up the pace in this work, we plan to extend it to a broader range of companies). It is also possible now to use land plots and forest tracts for subsoil resource use purposes.

Overall, we think that these measures have made it possible to make this work independent of external challenges, and recent years confirm this.

Now, we have completed the improvement work and have cleansed the stock of licences of outdated obligations that were either generally obsolete or do not meet current demands, and we think that the conditions are now in place for a better performing sector. To achieve this, we first need to bring order to subsoil resource use through stricter supervision. If necessary, we are looking at the possibility of revoking the licences of subsoil resource users that fail to comply with the requirements. As I said, the licences now set out clear requirements. In other words, the decision-making process is clearer now.

Then there is the system of economic incentives. What does this involve? Last year, we decided and introduced legal provisions making it possible to deduct geological exploration costs from profit tax, taking into account the mark-up factor. This provision applies only to offshore exploration currently, but we believe it could be used on land as well, particularly in the regions we want to stimulate (this mechanism is widely used in the world and we are in talks with the Finance Ministry now).

In other words, this mechanism could be put to use in areas we want to develop. However, we want to develop another type of mechanism here. Currently, resource users pay rentals, payment for the area in which they are carrying out geological exploration. We want to raise these payments for resource users who do not perform the work and comply with geological exploration timeframes. In this way we would like to encourage them to keep to the deadlines and requirements set out in their licences and to give them motivation to do so.

We are also looking at the possibility of developing new exploration and production technologies at technological test sites. We hope to pass a law this year making it possible to develop technological test sites in various places, tailoring them for use with different types of hard-to-access resources and different types of technology. This draft law is ready now and is going through the approvals process.

Work is also underway on developing new forms of state participation in large exploration projects. In particular, we are putting the emphasis on developing private-public partnerships in this area.

This is the general picture regarding what we have done to improve effectiveness in this area.

Vladimir Putin:

How long have you been working on these measures?

Sergey Donskoy:

We began active work in 2012. Many people worked on the new classification system. The old one dated from 1983 and did not meet today’s requirements. We have gone over to the new system, which makes it possible to take economic factors into account, as well as many new approaches and technological change. This work began in 2005 and was very substantial, but the active phase started in 2012 and is now completed. We also had international experts involved, so that we could examine the international aspects of our national classification and ensure the necessary degree of consistency.

Vladimir Putin:

What are the legal areas in need of bolstering in your opinion?

Sergei Donskoy:

We need to focus on economic incentives for geological exploration today, to have the targeted instruments we need for use in new zones where we plan to develop geological exploration and make new discoveries. This is our priority. We also need to motivate resource users to comply with the rules and obligations set out in their licences. We believe this is one of the key tasks now if we want these licences to work effectively, in terms of revenue for resource users, but also, above all, in terms of the development effect for the country. This creates a good basis for regional development, after all.

Vladimir Putin:

You set this all out in the licences themselves, but what interests me is your opinion regarding the need for additional measures to strengthen the legal base, perhaps government regulations, additions to the legal base. Do you see a need for any additional measures here?

Sergei Donskoy:

The first point I mentioned does require legal amendments. Measures to stimulate development of hard-to-access deposits will also require legal amendments, and so will the development of test sites to which we can attract companies looking to develop innovative technology, small and medium business working on innovations that big companies will later use in their work as well.

As for the private-public partnership plans, it could be possible here to develop junior business and to offer incentives to small companies working at the earlier stages and implementing their geological exploration ideas. Then there is the creation of public-private stimulation funds.

Vladimir Putin:

How soon do you think this will be done?

Sergey Donskoy:

Everything is at the approvals stage at the moment. We hope to introduce these additional measures this year, after amending the law.

Vladimir Putin:

When do you plan to submit the draft law to the Duma?

Sergei Donskoy:

We hope to submit these new proposals in autumn and have them passed.

Vladimir Putin:

Good, thank you.

You also wanted to speak about the protected nature zones.

Sergei Donskoi:

Yes, we have a particular situation this year. In accordance with your executive orders, we are working on measures to mark the Year of the Environment and the Year of Protected Nature Zones. The existence of these protected zones in Russia marks its 100th anniversary this year. In 1917, tsarist Russia established the first such zone, the Barguzinsky Reserve, to restore the sable population.

Vladimir Putin:

In 1917?

Sergey Donskoi:

Yes, 1917 according to the modern calendar, but it was December 1916 by the old calendar. If we take into account the calendar change though, the anniversary falls on January 2017. We have already carried out the first activity planned to mark this centenary, at the Baikal Reserve, where we have opened a visitors’ centre, one of the best such centres yet established, and we invite everyone to come and see Baikal’s beauty in all its splendour.

Regarding current protected nature zones, we have more than 200 different reserves and national parks today, and we plan to create another 7 this year – both reserves and national parks. Around 10 million hectares of land will become part of the protected zone system. I would like to say here that international experts and our own specialists agree that the protected nature zone system (reserves and national parks) is one of the best forms of preserving territories that are home to between 50 and 80 percent of rare animal species, and could be subject to human impact.

Last autumn, you visited the Orenburg Reserve, where we are carrying out a project to reintroduce the Przhevalsky horse. We brought a dozen horses from Hungary last autumn. This September, we will bring another 10 horses from Hungary. We are thus developing this project and will have a solid core of Przhevalsky horses for taking it further. This summer, we also plan to launch projects to develop eco-tourism and invite people to come and see the horses in the wild and from there to become familiar with what is a very important, but very fragile sector, I think.

Most important, I would like to stress, is that specialists estimate that our national parks could attract up to 20 million people on eco-tourism routes. We currently host only 2 million people. This year, we are putting the emphasis on building the infrastructure required for the development of eco-tourism in the national parks. We plan to amend the laws and continue these infrastructure development projects.

The most efficient and memorable means of drawing attention to eco-tourism and to our sites and their beauty is to have your support, Mr President. We propose three sites for your attention – the Russian Arctic in the Franz-Josef Archipelago, the Baikal Reserve, and the Putorana Plateau. These are all beautiful and interesting sites. If you agreed to visit, this would be a visible and big contribution to developing eco-tourism in our protected nature zones.

President Putin:

Thank you. I will certainly do this. We will choose a site and decide on a time when a visit would have the greatest effect.

Sergey Donskoi:

Thank you, Mr. President.

Vladimir Putin:

Thank you.

<…>

Link: http://en.kremlin.ru/events/president/news/54071

PHOTO:
Vladimir Putin with Natural Resources and Environment Minister Sergei Donskoy.
Vladimir Putin, Sergei Donskoy.
President Putin meeting with Environment Minister Sergey Donskoy.
Natural Resources and Environment Minister Sergei Donskoy.