Highlighting economic performance in 2013 and economic policy guidelines
Dmitry Medvedev’s opening remarks:
Expanded meeting of the Board of the Ministry of Economic Development
Good afternoon. Time flies by quickly, colleagues. Not so long ago we summed up the Ministry’s results for 2012 and now the time has come to review economic performance in 2013.
I would like to say a few words about where we stand and what we are expected to achieve. I think that all of you understand the responsibilities of the Economic Development Ministry within the executive branch and the Government. It plays a special role, since it is involved in drafting all but a few basic documents. It is not uncommon that my colleagues in the Government have disagreements with the Ministry of Economic Development or the Ministry of Finance. Sometimes in the heat of the moment they say that if you can’t get or achieve anything, there is no need to keep any of the ministries, except for the Ministry of Finance and the Ministry of Economic Development. This is not true. What is true is that your ministry carries much of the responsibility for developing trade and economic policies, government programmes and overseeing many other initiatives.
The effectiveness of the decisions taken within the Government’s economic block is undoubtedly contingent upon everyday efforts of your ministry’s staff. I’m confident that all of you present here today love your jobs and are true professionals and experts in what you are doing.
Dmitry Medvedev: "Qualitative parameters are of prime importance for us today. I am referring to higher labour productivity, better state administration and efficient use of resources. All of this combined ensures modern economic growth."
I will confine myself to the priorities. It so happened that our two leading economic agencies held their board meetings earlier this week. So, to avoid repetition, I will briefly discuss a few points.
First off, I’d like to mention again what we noted last year. As is obvious, it is highly important for the Government as a whole, for the national leadership and state administration, to engage in a stereoscopic view of economic matters, as someone said at a board meeting last year. It is equally important for us to maintain full-fledged contacts with our colleagues at the Ministry of Finance, which, in my view, works out fairly well.
Now let us talk about the last year. It was not an easy year, as the generally accepted euphemism goes. We are fully aware that the current year will not be easy either. I delivered a detailed analysis of problems at the board meeting on Tuesday. We understand that our economy slowed down in 2013 and that the situation is even more complicated this year. The reasons have to do with external economic risks and our domestic limitations, which we are well aware of. I am referring to a slide in investment activity (in part, not entirely, but it is a significant factor nonetheless) and capital flight. We must be realistic: these problems cannot be solved within a month, six months, or even a year. We must use new economic development factors to overcome them.
Qualitative parameters are of prime importance for us today. I am referring to higher labour productivity, better state administration and efficient use of resources. All of this combined ensures modern economic growth. But for this growth to be sustainable, its source should lie in the entire business community, rather than major public companies alone. Private entrepreneurial initiative, therefore, is of exceptional importance, particularly in the present period, including, of course, small and medium-sized businesses. Last year we faced a certain slowdown in the development rates of small and medium-sized companies; I think the Government must pay unwavering attention to this fact. We must create conditions to prevent the disappearance of small businesses following slight market fluctuations. I think we will be able to take certain steps on this path before the end of the year, including by granting the Russian regions the right to offer two-year tax vacations to small and medium-sized businesses, to new businesses, and to give them more access to procurement tenders held by major public companies and natural monopolies. As far as it is possible, we should secure accessibility of credit resources, although this is not very easy under the present-day circumstances.
I’d like to emphasise that measures on forming a favourable investment and business environment are designed to substantially promote economic growth. I’m referring to the work that you are doing under the National Business Initiative and the roadmaps. Let me recall that one of our key goals is to make Russian jurisdiction one of the top 20 in terms of the simplicity of conditions for doing business. It would be wrong to say that we’ve lost this time and these years. In a year and a half we’ve achieved some success in customs administration, the power industry and property registration. We are making better headway in some areas than others and we must keep moving forward. Obviously the Ministry should focus on improving terms for doing business. It will be very difficult for us to move forward without full and authentic information on how these tasks are being carried out in the regions.
We have two systems for assessing this. The first one is designed to judge the performance of the heads of federal executive bodies and regional governors, while the other one shows the national ratings of the investment climate in the regions. As we use and, I hope, improve these systems, we’ll be able to correct our own mistakes and spread the best regional practices. I’d like to emphasise that armchair management won’t do the job. The business climate can only be improved by cooperating with businesses and the expert community.
Dmitry Medvedev: "Innovations are a major factor in establishing a non-energy model of economic growth."
At a recent meeting with the Government Expert Council in Ulyanovsk we discussed proposals on developing entrepreneurship. Such proposals will continue to be made, because life is always moving forward. The main point is to consider the concerns and problems of the business community, and to be on top of the changing circumstances so as to introduce proper norms and make proper decisions.
Innovations are a major factor in establishing a non-energy model of economic growth. The President’s address and relevant normative acts have set the task of listing all development institutes with a view to supporting high-tech sectors and new production lines. Obviously, this is also a very important part of our work and each stage of the innovation cycle deserves special attention. I hope the Ministry will deal with this as well.
Dmitry Medvedev: "In a year and a half we’ve achieved some success in customs administration, the power industry and property registration. We are making better headway in some areas than others and we must keep moving forward. Obviously the Ministry should focus on improving terms for doing business."
Speaking about innovations, we hope that the public sector will become the driver of the demand for innovations and that innovative development will continue with the help of such mechanisms as state purchases and relevant programmes of companies with government participation.
Apart from that we should continue elaborating industry-specific criteria for categorising innovative products and integrating a registry of such products, technology and services into the state purchases system. We must also step up efforts to promote our products on external markets, and expand financial and other support, such as granting loans, insuring exports loans, providing state guarantees and, most importantly, developing these institutes themselves. We have problems here both at the managerial level and in these institutes, and we must deal with them. I hope that the Ministry will pay due attention to this as well.
There is one more area of focus – special economic zones. There are about 30 such zones in this country. As of 1 January of this year, their aggregate revenues amounted to 135 billion roubles, although far from all of them have started paying back. Now alongside these zones, experts are working on the parametres of priority development areas with a privileged tax regime in Siberia and the Far East.
This is where we need to at least define the terms and legal and economic basis of these regimes. I said at a recent meeting that the concept is generally doable as long as we can somehow distinguish between special economic zones and these areas or, on the contrary, create a uniform framework that could be used in different situations, especially because there are new major projects and serious challenges such as Crimea. We need to understand what special economic zone should be created there and according to what principles. All of the necessary instructions have been given. I hope that the Ministry of Economic Development will elaborate proposals regarding this issue pretty soon.
Dmitry Medvedev: "A priority issue is improving the public and municipal management and the quality of regulation drafting."
A priority issue is improving the public and municipal management and the quality of regulation drafting. The website is now open for discussing draft regulations. Anyone can express their opinion about the draft resolutions being developed by Government officials. Businesses might, though, be right when they suggest extending the evaluation of regulatory control to other stages of legislative work, including the discussion of bills in the State Duma. This is because each draft law passes through all of the legislation stages and often transforms into a completely different document. Apparently, these procedures will have to be improved.
It is very important to organise this work in the regions by assisting with the methodology and introducing specialised information resources.
Concluding my introduction, I would like to thank the Ministry of Economic Development for their professional and responsible work, creative approach, and prompt response to instructions and tasks from the Government.
At a board meeting of the Ministry of Finance, when it came to compliments, one of the speakers said that the ministry’s performance is not just good but very good. Please, let me praise you for the same as well. I hope for joint productive work in the future.
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