Dmitry Medvedev: “We should consider concrete, consistent and reasonable moves towards the comprehensive integration of Crimea and Sevastopol into the Russian state, economic and legal framework, so that Crimeans will have the same opportunities, rights and guarantees as all other Russian citizens.”
Dmitry Medvedev’s opening remarks
Briefing by Deputy Prime Minister Dmitry Kozak
Government meeting on supporting the socioeconomic development of Crimea and Sevastopol
Dmitry Medvedev: We are meeting today to discuss a very important issue, an issue that has been top news in recent days.
We are here to discuss the socioeconomic development of new Russian regions, namely the Republic of Crimea and the federal city of Sevastopol. We need to consider practical, consistent and reasonable moves towards the comprehensive integration of Crimea and Sevastopol into the state, economic and legal framework of Russia, so that these new regions will become part of the country politically and legally, but also in terms of living standards. Crimeans must have the same opportunities, rights and guarantees as all other Russian citizens. They must feel that they are an integral part of a large, strong and reliable country. I’m sure that this is what they wanted when they made their historic choice.
Dmitry Medvedev: "We need to consider practical, consistent and reasonable moves towards the comprehensive integration of Crimea and Sevastopol into the state, economic and legal framework of Russia, so that these new regions will become part of the country politically and legally, but also in terms of living standards. Crimeans must have the same opportunities, rights and guarantees as all other Russian citizens. They must feel that they are an integral part of a large, strong and reliable country."
All deputy prime ministers, ministers and other officials present here, the ministries and bodies of federal executive authority of which they are in charge, will be fully responsible within the sphere of their competence for the situation in Crimea. This is why all ministries and agencies are to prepare without delay and present their action plans for the period until the end of this year.
Now to the tasks facing us: The priority task is to streamline the system of state authority in the new regions in accordance with the President’s instruction. Crimea has operating bodies of power, but we need to quickly readjust them to Russian standards without stopping their operation and, most importantly, without affecting their quality. Tomorrow all ministries and agencies are to adopt decisions on establishing their territorial offices in Crimea on the same principles as in other Russian regions. It is logical that they will be established on the basis of comparable existing agencies of the Republic of Crimea and the city of Sevastopol. Moreover, employees should be quickly retrained in accordance with federal regulations and should familiarise themselves with Russian legislation.
Dmitry Medvedev: "Crimea has operating bodies of power, but we need to quickly readjust them to Russian standards without stopping their operation and, most importantly, without affecting their quality. Tomorrow all ministries and agencies are to adopt decisions on establishing their territorial offices in Crimea on the same principles as in other Russian regions."
I’d like to draw your attention to one more requirement: The regional agencies should be compact. We must not allow the creation of new and unsubstantiated bureaucratic bodies. We have discussed this before.We could conduct a number of clever managerial experiments to test new technologies in Crimea and Sevastopol for subsequent application elsewhere in the Russian Federation.
To an even greater extent, this concerns law enforcement and the judiciary. Maintaining law and order in the transitional period is of immense importance, particularly in view of possible provocations on the part of various radicals.
The Russian Academy of National Economy will handle on-the-job training of employees in Crimea, and it is very important to establish close personal contacts with our colleagues on the ground. I hope everyone will do this; many are already in direct contact. We need to support them psychologically, and help create the right kind of working atmosphere.
Dmitry Medvedev: "The Russian Academy of National Economy will handle on-the-job training of employees in Crimea, and it is very important to establish close personal contacts with our colleagues on the ground."
Crimean residents obtaining Russian nationality is of huge importance as well. The Russian Migration Service is planning to complete the issue of Russian passports for everyone who wishes to have one before the start of summer.
The next set of priorities is related to how we ensure normal everyday life in Crimea. In the first place, we should retain the ability to maintain an unimpeded movement of commodities across the new Russian border. Problems crop up now and then in this regard, and therefore the situation needs to be monitored closely. This also goes for trade between Crimea and Ukraine, which is essential for the Crimean economy (so far, at any rate) and to Crimean exports to other countries. This is the job of the Federal Customs Service and the Border Service.
It is also necessary to deal with technical issues involved in Crimea’s entry into the rouble zone and the licensing of local banks. The rouble is already the official currency, while the hryvna will be in circulation until late 2015. I would like to note in particular that the payment of salaries to government employees as well as pensions and allowances will be at the rouble-to-hryvna exchange rate as it stood on 18 March at the moment of accession. Right now there are problems with cashless transfers, which many businesses for the time being have to make in hryvnas. And, of course, there is still the risk of various unfriendly acts on the part of Ukrainian financial agencies. Later today I hope to hear proposals on how to secure Crimean residents’ financial assets under the circumstances.
Roads and communications are of key importance for maintaining our country’s territorial, cultural and information unity. This is the main thing for Crimea as well. Its reliable communication with Russia and its sustained economic development should be secured by a modern transport and communication infrastructure. A major project of this kind is the building of a transport link across the Kerch Strait. As you know, the Government has issued a directive to conduct a feasibility study. We could also use earlier studies related to the technical aspects of this project, but in any event the design should provide for both rail and motor communication. We know that the local geological and hydrological conditions are far from easy, but specialists have been instructed to come up with an optimal solution before the end of this year. The Ministry of Transport is handling the project.
Dmitry Medvedev: "Crimean residents obtaining Russian nationality is of huge importance as well. The Russian Migration Service is planning to complete the issue of Russian passports for everyone who wishes to have one before the start of summer."
Of course, Crimea’s port and airport capacities should be expanded, including by introducing additional maritime high-speed boat service and inter-regional air flights. I would like the Ministry of Transport to keep an eye on this too.
We must have Rostelecom and its subsidiaries come to Crimea as soon as possible. We cannot tolerate a situation in which sensitive information and documents related to the administration of the two constituent entities of the Russian Federation are relayed by foreign telecommunications companies. This must be terminated. We should do all we can to have our own resources in the region. I refer this to the Ministry of Communications.
Yet another infrastructure problem is Crimea’s dependence on Ukrainian power and water supplies. This dependence periodically makes itself felt, including last night.It is necessary to settle this issue at international talks but we must choose the best option for supplying the peninsula.
Dmitry Medvedev: "The rouble is already the official currency, while the hryvna will be in circulation until late 2015. I would like to note in particular that the payment of salaries to government employees as well as pensions and allowances will be at the rouble-to-hryvna exchange rate as it stood on 18 March at the moment of accession."
For instance, Crimea could be connected to Russia’s unified power grid via the Kerch Strait Bridge, or by building its own electricity generation facilities on the peninsula. We must weigh these options fairly quickly, and we have good potential in this respect. Anyway, we must resolve this task in the near future and also increase gas output by 1.5-2 times. According to experts, this will be enough to cover Crimea’s electricity requirements. I understand Gazprom has an initiative on this score. The Energy Ministry should weigh all this and in general should continuously monitor everything that is happening in Crimea. I’d like to draw the attention of the Energy Minister to this. Now this is our headache, because this is our territory and our regions. This is why I’d like you to make decisions with an eye to the future. The Minister will say a few words on this score today.
All these issues are linked with the development of the Crimean economy. Many analysts agree that Crimea may turn from a subsidised into a donor region, all the more so since it has developed industry and trade. However, we must help Crimea with supplies of spare parts and raw materials and with marketing so that its plants and factories continue operating without cutting down the number of jobs.
Dmitry Medvedev: "Crimea could be connected to Russia’s unified power grid via the Kerch Strait Bridge, or by building its own electricity generation facilities on the peninsula. We must weigh these options fairly quickly, and we have good potential in this respect. Anyway, we must resolve this task in the near future and also increase gas output by 1.5-2 times. According to experts, this will be enough to cover Crimea’s electricity requirements."
Agriculture, in particular, grain and wine growing, play a major role in the Crimean economy. Grain harvesting will soon start on the peninsula. It is common knowledge that Crimea has never had proper equipment of its own and is still short of it. I’d like to hear what we can do to help it, and I expect the Ministry of Agriculture to make a report on this score. We should also think about how Crimea can use national support mechanisms for agricultural producers. In general, we should include them into our support system. It is not ideal but it is operating and it is certainly better than anything Crimea has had before. This is absolutely the case.
There is one more urgent issue. We must make the most of Crimea’s tourism opportunities. We must do all we can in this regard. We’ve already taken a number of measures to allow our citizens to take a vacation in Russia’s Crimea this season. I also hope to hear how the state will support citizens who have chosen to spend their vacations in Crimea. I’m referring to special travel costs, in particular a low-cost airline. So, the Ministry of Culture and our national carrier Aeroflot should deal with this. I will give you the floor for a number of brief reports.
One more important issue is re-registration of property, including land and real estate. Rosreestr (the Federal Service for State Registration, Cadastre and Cartography) should establish a subsidiary in Crimea to address this issue. It should act carefully on this sensitive issue so as not to damage Crimea’s business climate and investment appeal. But it must conduct this work, because without a correctly registered property title it is impossible to carry out a single investment project.
Dmitry Medvedev: "There is one more urgent issue. We must make the most of Crimea’s tourism opportunities. We must do all we can in this regard. We’ve already taken a number of measures to allow our citizens to take a vacation in Russia’s Crimea this season."
I’d like to emphasise the importance of supporting small- and medium-sized companies. Many of them are operating in the shadows now. It is necessary to start issuing licenses for business activities without delay. It's clear that we cannot do without different support mechanisms. I’ll come back to this issue but we should obviously think about the drafting of rules that will give tax benefits to companies that are paying taxes in Crimea during the transitional period. I’m referring to companies that are operating and paying taxes in Crimea and are now within Russian jurisdiction.
It is essential to stabilise the economy and infrastructure, but the social component is no less important. It may even be more important for the vast majority of the population. One of the Government’s current priorities is care for pensioners, veterans, children and people with disabilities who are now living in the two new regions of the Russian Federation.
According to our Constitution, Russia is a social state and now all of its social commitments also apply to the residents of Crimea and Sevastopol. This will require additional expenditures and the launching of modernisation projects in several spheres at once.
Dmitry Medvedev: "I’d like to emphasise for my Government colleagues and the residents of the two new regions that it is also necessary to preserve all social benefits and payments that existed in Crimea and Sevastopol as of the reunification date – 18 March of this year – if they were absent in the Russian legislation."
I’d like to emphasise for my Government colleagues and the residents of the two new regions that it is also necessary to preserve all social benefits and payments that existed in Crimea and Sevastopol as of the reunification date – 18 March of this year – if they were absent in the Russian legislation. I’d like to hear your proposals on this score. Not a single person should lose anything.
Now a few words about the pension system. The number of pensioners in Russia has increased by 677,000 people, including 117,000 (practically 118,000) in Sevastopol. Social services have already done part of the work on stable pension payments. Now the priority task is to increase pensions for the residents of the two new regions to the national average. According to tentative estimates, it will be necessary to allocate about 36 billion roubles for this purpose before the end of the year. Our budget has the funds for this. They have been planned. The schedule for raising pensions should be drafted in the near future with a view to preventing inflation. I’m referring to the fact that Russian pensions are much bigger than Ukrainian ones.We should also think about this, so that this will not impair the financial standing of other Crimea residents. I will notify you regarding this timeframe in advance.
Government meeting on supporting the socioeconomic development of Crimea and Sevastopol
The territorial divisions of the Pension Fund and the Social Insurance Fund will be established in the Republic of Crimea and the city of Sevastopol until 1 January 2015. Although the Ukrainian pension system differs from the Russian system, I want to stress once again that there should be no setbacks during the transition to Russian legislation in this area.
We have to accomplish another major objective and raise the salaries of Crimean public sector employees to the average Russian levels. First of all, this concerns teachers, medical personnel, and cultural workers. This should also be achieved as soon as possible. I would also like to note that we will compile a separate timeframe for raising these salaries. I will determine this timeframe, and I will tell all of the concerned officials.
Dmitry Medvedev: "We have to accomplish another major objective and raise the salaries of Crimean public sector employees to the average Russian levels. First of all, this concerns teachers, medical personnel, and cultural workers."
Healthcare is our next issue, which has major significance for the life of our people. Crimea seriously lags behind in terms of equipment levels and information infrastructure in this area. There are problems with rendering high-tech medical assistance, modern equipment is in short supply and there is no medical insurance system. In this connection, we need to integrate the Crimean healthcare system with the Russian healthcare system, and, of course, we should see to it that the compulsory medical insurance system begins functioning from 1 January 2015. But we should already start providing affordable and high-quality medical assistance to Crimean residents in line with the state guarantees programme for providing free medical assistance. As this calls for investment and preparatory work, and, considering the fact that this is a difficult task (it takes a lot of time to resolve this task all over Russia, and this does not happen as quickly, as all of us probably want), I believe that Russian regions will not shy away from the problems of the new regions. For instance, Moscow and Sevastopol have already agreed on the delivery of new medical equipment that will help modernise the healthcare system in Sevastopol. I hope that other Russian regions that can provide similar assistance will act likewise. We need to improve the Crimean healthcare sector.
The educational system will also be transformed. I know that the Ministry of Education and Science is already working actively on this. It will take several years to complete this process, but special conditions will be created for Crimean school students during the transitional period. They will not have to take the 2014 Unified State Exam, and they will be able to enroll in Russian universities based on individual school exam scores, just like generations of Russian school students did in the past. But those wishing to take the Unified State Exam should be able to do so at specialised facilities. Crimean first-grade schoolchildren will begin to study in line with Russian educational standards on 1 September 2014.
We have very little time for preparations. We have to conduct large-scale work, and I expect that the Ministry of Education and Science submit its proposals on organising this work.
Of course, against the backdrop of all of these current problems that I have listed, we also need to think about long-term Crimean development prospects. To be honest, this is why I have invited all of you because urgent instructions can be issued in a different way.
We will have to provide the new regions with additional preferences, and I have already mentioned one tax exemption measure. I also consider it possible to examine the issue of establishing a special economic zone in Crimea. And, finally, all of us should jointly create a correct financial and economic instrument to develop Crimea and Sevastopol. Before the end of the first six-month period, the federal targeted programme for the peninsula’s socioeconomic development should be submitted. I want to underscore that this should be a full-fledged programme with specific funding, deadlines, project managers, and executors. In the future, the federal targeted programme could be converted into a state programme.
Ladies and gentlemen, the Government will have to accomplish this large-scale, multifaceted objective for the first time in history. The deadlines are very short. The transitional period will last until 1 January 2015, and our working conditions are quite tough. Nevertheless, we have to act quickly, timely, and efficiently. And, of course, this should not be done to the detriment of our other objectives, and the whole country is standing behind us. However, this is a good reason to demonstrate the potential of the modern Russian state and our managerial skills.
Dmitry Medvedev: "I decided that Deputy Prime Minister Dmitry Kozak would oversee the Crimean issue, while allotting specific duties and powers. The relevant group was established together with our colleagues, and they are already addressing this issue. A state commission dealing with these goals will be established in the near future. Nevertheless, all ministries and departments should exert maximum efforts, while working together with the commissions and independently."
Some time ago, I decided that Deputy Prime Minister Dmitry Kozak would oversee the Crimean issue, while allotting specific duties and powers. The relevant group was established together with our colleagues, and they are already addressing this issue.
A state commission dealing with these goals will be established in the near future. Nevertheless, all ministries and departments should exert maximum efforts, while working together with the commissions and independently. I would like to stress again that this is quite difficult, even if we compare this project with the Olympic Games megaproject … But this is not a megaproject. This is part of our country. I am counting on your professionalism and competence.
And, finally, all of us will meet again seven days later, and we will discuss specific results of fulfilling instructions and proposals as regards Crimea’s development. I will now give the floor to Deputy Prime Minister Dmitry Kozak who will make a brief report. Afterwards, we will discuss specific issues.
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Briefing by Deputy Prime Minister Dmitry Kozak after a meeting on the socioeconomic development of Crimea and Sevastopol
Transcript:
Question: Good afternoon Mr Kozak. Please explain to us the following: the Prime Minister said today that a special economic zone and a federal targeted programme can be adopted for Crimea. Let’s start with the programme. Have you made at least a tentative plan? We know that a working group on Crimea has had a meeting. How much investment is necessary in Crimea, and how much money can be allocated from the budget? Regarding the special economic zone, do you know the period for which it will be created? When will this be done, and what will the purpose of this zone be? Will there be tax concessions?
Dmitry Kozak: The answer for both issues is clear-cut. On 21 March, the Republic of Crimea and the City of Sevastopol became component parts of the Russian Federation. We started working [on the above issues] the same day. We have only developed general proposals on the federal targeted programme and the special economic zone as the instruments of governance, budget planning and economic stimulation. We understand what these instruments should be like, but we have not yet determined the specific financial and physical parameters of the federal targeted programme or the special economic zone.
This task, meaning the deadline, general provisions and also proposals on the parameters of the special economic zone, is to be fulfilled by 15 April. This is our task. The federal targeted programme must be presented in detail by 1 July. This is a very short time for taking such concrete decisions in Russia, but we will do it, and when we do it we’ll explain it to you. Today I cannot give you a single figure or name a single tax incentive.
Question: Do you worry that sanctions might apply to you now that you have been put in charge of the Crimea development commission?
Dmitry Kozak: The decision has been made, and I have accepted it, which means that I’m not worried. It is my personal assignment, because I’m responsible for the socioeconomic development of all Russian regions. From 21 March 2014, [Crimea and Sevastopol are] Russian regions.
Question: Good afternoon Mr Kozak. Interfax. The Prime Minister mentioned the issue of air transport today. Did you discuss subsidising tickets for Crimea just as flights from the Russian Far East and Kaliningrad are subsidised?
Dmitry Kozak: Yes we did. We discussed it at the Friday meeting that I chaired, and at today’s meeting chaired by the Prime Minister. We need at least a short time to analyse it thoroughly. In this case, the deadline is 5 April. We must provide our calculations and substantiation by 5 April. Decisions must be taken with regard to the special economic zone, the federal targeted programme, and the subsidising of passenger transport with due regard for the task of the accelerated socioeconomic development of this new Russian region and the need to help its social and economic sectors during and after the transition period, but also taking into account the financial opportunities of the federal budget.
Question: Power failures have been reported in Crimea. What is being done to resolve this problem? And what will be done to prevent this from happening again?
Dmitry Kozak: Power has been restored in Crimea. As for preventing this from happening again... First, we are negotiating with the leaders of Ukraine’s power supply system. Second, we are implementing a crisis management plan, and we have also drafted, approved and are implementing an emergency electricity supply plan, primarily for vital infrastructure and social facilities. It was partially enacted last night.
Question: What additional equipment are you using? Have you moved some of it from Sochi?
Dmitry Kozak: We are using diesel generators, including those that ensured a reliable electricity supply during the Olympic and Paralympic Winter Games.
Question: The day before yesterday, Rustam Temirgaliyev said that two gas-fuelled power plants would be built in Crimea within three to five years, one of them in the north and the other near Kerch. Can you confirm this information?
Dmitry Kozak: No. It was a proposal by the Crimean Deputy Prime Minister, which we are analysing now. A decision will be made only after we complete the feasibility study and assess the possible consequences and variants for ensuring reliable electricity supply in Crimea. So far, no decisions have been made on this issue, even though it is critically important and brooks no delay. We must find an optimal solution in terms of cost and implementation deadlines.
Question: One more question, about Russian tourists in Crimea. It was said that Russian agencies and government-owned companies will send their employees to Crimea for recreation. It has also been said that the Culture Ministry and Sberbank would do this. Can you tell us if these organisations will send their employees to Crimea for recreation or not? What other companies are planning to do this?
Dmitry Kozak: It’s correct that we have appealed to Russian businesses, primarily those that work in the northern regions, and also to the agencies that sell vouchers to Russian health and recreation resorts to focus on Crimea. The health and recreation business is one of the key economic sectors on the peninsula, and we certainly want these travel agencies to redirect their attention from Turkey and Cyprus to Crimea, which is especially important now, during the transition period when the political situation around Crimea is so complicated. Yes, we have made the appeal, and we will continue to work on this. Also, a concrete action plan, a roadmap on the development of Crimean health and recreation resorts is to be approved by 5 April.
Question: I have two questions. First, electricity was turned off for several hours last night. The Ukrainian authorities have announced…
Dmitry Kozak: We have discussed this.
Question: Can this happen again? Are we ready for it? What will you do if Kiev decides to cut electricity in Crimea?
My second question: The Transnistrian authorities have appealed to Russia to consider the region’s incorporation into Russia. Have you discussed this issue?
Dmitry Kozak: Personally, I have not attended any meetings that included this.
As for power supply, I’d like to say that we are ready for power failure emergencies. Also, such emergencies would be bad for Ukraine’s electricity system economically and technically. I pin my hopes on their common sense. Why punish ordinary people by cutting off electricity?
Next time we’ll talk longer. Thank you.
