Prime Minister gave an interview to Sergei Brilev’s programme Vesti v Subbotu.
Dmitry Medvedev's interview with Rossiya 1 TV network
Sergei Brilev: Mr Medvedev, where are we? What’s the point of holding offsite Government meetings like this?
Dmitry Medvedev: Sberbank is hosting this meeting. This is a special training and education centre, a place where people can exchange experience. I think it’s a good place.
Sergei Brilev: As far as I understand, its key feature is that rank-and-file employees can also come here.
Dmitry Medvedev: Yes, of course. This is a training centre for Sberbank employees, where they attend workshops. The Government has been invited here to have a look. By the way, there was a good reason for us to meet here. Yesterday, on 21 May, the current Government celebrated its third anniversary since its formation. But celebrating this occasion was not the only reason for holding this meeting. In fact, we met to sum up results, talk, outline plans for the future and listen to some interesting people who have been invited here.
Sergei Brilev: I had an opportunity to look through the meeting’s agenda and found Americans and Singaporeans among its participants. Or am I disclosing a corporate secret of sorts?
Dmitry Medvedev: There were also quite a few Russians there: economists, political scientists and sociologists. There were also experts from other countries, primarily people with experience in state governance. Today, a colleague from Singapore whom you’ve mentioned delivered a presentation. As a former head of the Public Service Division, he shared with us some insights on reforms that were implemented in Singapore under Lee Kuan Yew, the legendary leader of Singapore. He also talked about changes they’ve made, and naturally, how it applies to Russia’s experience. In fact, I asked him a question on whether approaches of this kind can be effective in other countries, big nations with a different history, like Russia. All in all, the exchange of views that took place was quite interesting. I was pleased to see that ministers, who for the most part are very self-reliant and regard themselves as experts at least in their respective areas and are in charge of specific sectors, nevertheless, they were eager to ask questions, they were interested. This proves that this was not in vain.
Sergei Brilev: You know, I was able to slip past security. But please don’t give them a hard time.
Dmitry Medvedev: How did you manage it?
Sergei Brilev: Well, that’s not the point. The point is that I had a peek through a window into the meeting room. I was surprised that they were actually taking notes.
Dmitry Medvedev: That’s not a bad thing.
Sergei Brilev: Despite the fact that they are ministers...
Dmitry Medvedev: Of course, this is very important. This means that no one, be it a college student or a minister, should scorn new knowledge or talk to people who have things to share in a dismissive manner, as if saying: I already know everything you are trying to tell me and I’m in charge of these processes on the scale of an immense country like Russia, so don’t try to impress me. On the contrary, it is important to be able to find something valuable and rational in another person’s experience, something that can be applied to our environment.
Sergei Brilev: Did you take notes?
Dmitry
Medvedev: Of course, I did. I remembered some things, and
put others on paper. There were some really interesting points there.
Sergei Brilev: Mr Medvedev, you have already mentioned the third anniversary of the current Government’s term in office. It feels like May 2012 was just yesterday. At the same time, it feels like a decade has gone by. Do you feel like it’s been just three years or a whole three years?
Dmitry Medvedev: You know, my feelings are exactly the same. On the one hand, it was just yesterday and the time has gone by so quickly. On the other hand, so much has happened over these past three years, especially if we think about last year.
It is a significant time for a Government. According to the Constitution, it is only half of the mandate, half of the term that is given to the executive branch. Therefore, I generally believe that it has been a pretty difficult but very interesting and challenging period for the Government, the entire Government team and myself.
Sergei Brilev: Speaking about last year, you already talked about it in your report to the State Duma. We will definitely get back to this later. Looking back on these three years as a whole, which of your plans have succeeded and which have not?
Dmitry Medvedev: I don’t think we have the time to repeat what I said in the report to the State Duma this year and the year before. I believe we are moving forward with the goals and targets that we set. In May 2012, the President published his May Executive Orders, outlining the country’s long-term development objectives and, let’s be honest, they are very ambitious. The Government has approved the main directives and a number of state programmes in order to implement the Presidential Executive Orders and its own documents. These are our guidelines. Regardless of whether we succeed, we have come a very long way over these three years. I will not give you too many examples but let me say the following. You know there have been some positive changes over these three years, changes for the better. First of all, in the demographic issue. You will agree it is a very telling indicator of the nation’s wellbeing and the Government’s performance.
Sergei Brilev: An emotional indicator.
Dmitry Medvedev: Both an emotional and a fact-based indicator. In the past three years, we crossed the point of natural population growth. Our population is growing every year. It did not happen for almost 20 years in our recent history. Now there are more and more of us with every year. Russia is no longer a nation that is in danger of extinction. Bear in mind that just a few years ago Russia was statistically a country with a downward demographic trend.
Sergei Brilev: Even your friend Obama once mentioned this fact.
Dmitry Medvedev: True. By the way, he mentioned it after we entered the growth phase. Last year, Russia’s population increased by 33,000 people. I think it is a very good result because it is a mirror of the Government’s work. We have a whole lot of other very important achievements. Let me touch on another issue that concerns a huge number of people. All right, children are born but then they need to study somewhere, go to kindergartens and pre-schools. For almost 15 years, the whole pre-school sector was going downhill. Kindergartens were either sold off or left to crumble. Only recently, we have made a very important step forward, specifically, in the past three years. I believe we will eventually solve this task. Frankly, wherever I go and talk to the public in the regions, the first question is never about incomes or prices or inflation. The first question is always about kindergartens. People say, here, we have a new kindergarten. But we need more and soon. Everybody thinks that this programme could be one of the most successful. Why am I saying this? Because I hope that by the end of this year, we will completely resolve the pre-school issue. Then our demographic programme will have a solid foundation.
Sergei Brilev: Despite the budget cuts? Are you saying it is an untouchable target?
Dmitry Medvedev: Yes, despite the budget cuts. We have already invested over 100 billion roubles in this programme. The regions also contributed almost 60 billion. This year, despite financial constraints, we have increased the programme’s budget by 20 billion. That means we added 20 billion to the 10 billion we had initially planned to spend. Therefore I’m confident that we have made a major stride forward. We are moving fast and in the right direction.
Sergei Brilev: Mr Medvedev, strictly speaking you have answered only one of the two questions. You’ve talked about the Government’s achievements. But there is also a question of what you have failed to achieve, so let’s not miss out on the opportunity to talk about it. But first, I have a confession to make.
Dmitry Medvedev: I’m ready to talk about it.
Sergei Brilev: I would like to tell you first where I have failed. Maybe I shouldn’t be saying this, but last autumn, when the first effects of economic sanctions started to kick in, particularly the fluctuations in the rouble exchange rate, I panicked and converted my savings into dollars at the end of the year. Well, here comes the spring, and now I understand what a grave mistake I made. In fact, I lost a lot of money. I probably should not have raised this issue, but I’m not the only one who acted like this.
Dmitry Medvedev: You’re certainly not the only one.
Sergei Brilev: What has been done to reverse this trend for the rouble?
Dmitry Medvedev's interview with Rossiya 1 TV network
Dmitry Medvedev: Let me start with a comment on you panicking. On the one hand, it’s something everyone can understand. Many people felt this way. On the other hand, this is yet another proof that in such situations, if you trust your country, its economy, Government and Central Bank, it’s always better to wait and see instead of panicking, because there’s always a rebound. By the way, we, I mean the Government and the Central Bank, told you that the rouble rate will go up again, we told everyone not to worry, despite the sanctions and the dramatic fall in the price of oil, everything will come back to normal. This is what has actually happened. But of course, everyone has their reasons. Let’s hope that the losses were not too big.
Now to the measures that were undertaken. As you know, the Central Bank decided some time ago to allow the Russian rouble to trade freely by introducing the so-called free-float. This approach is absolutely market-oriented and the right thing to do when it comes to the value of the rouble and how it compares to the world’s main reserve currencies. In this system, the role of the Government and the Central Bank is reduced to a minimum, while the balance is reached through a complex set of various economic factors. At the end of the day, this is the right approach. Although it may create challenges in the short-term, which actually happened in December for a number of reasons. This had to do with the price of oil. It is true that Russia is very dependent on oil and gas prices. This is no secret. Although the trend has reversed, the prices we used to have are still beyond reach. They are still way below the average we set as a reference point two or three years ago.
There are other problems as well. At the end of the year major Russian companies had to make payments on their loans, while foreign capital markets were closed to them. We are unable to tap loans and are living of internal reserves. This affected the rate of the rouble and forced Russian companies to purchase dollars in order to repay foreign debts. However, the Russian economy does not boil down to export-related liabilities of its companies, payments under foreign trade contracts or for equipment deliveries. There were also a number of other factors, which are no longer relevant.
Moreover, consistent efforts by the Russian Central Bank and Government enabled us to strengthen the banking system. The one trillion rouble figure is frequently mentioned – we took this decision intentionally, to dispel any doubts regarding the solidity and strength of Russia’s banking system. Russian banks have increased their capital by purchasing special securities. By doing so they are able to comply with all the existing regulations, as they say in the banking industry, provide for capital adequacy and thereby meet all their commitments. This is what underpins the stability of the banking system. Of course, this is a major prerequisite for the economy as a whole to be up and running, including the industrial sector, agriculture, trade and small and medium-size businesses. The Government has adopted a number of decisions aimed at supporting the banking system, the industrial and agricultural sectors.
All these efforts resulted in a more stable national currency, the rouble appreciated, as the saying goes. What does this mean? First, it means that acting on any kinds of impulses or speculative trends is not the right thing to do, and, on the other hand, that our national currency has strong potential. That said, we will keep following developments on the currency market. This is primarily the task of the Central Bank. It goes without saying that the Government will also work on this issue and will assist the Central Bank within the scope of its authority. The message I want to get through, and I’ve recently raised this issue, is that we are interested in making the rate of the rouble predictable. It shouldn’t be too low or overvalued. It should be stable so that Russian people and companies can make plans, at least for the short and medium term. This is what we are going to do.
Sergei Brilev: Could you cite some figures?
Dmitry Medvedev: You want me to give you the currency band?
Sergei Brilev: With 50 roubles per dollar it’s easy to count.
Dmitry Medvedev: We have renounced the currency band. The rouble rate now reflects a whole range of factors on the currency market and in the economy as a whole. What we now have is close to the real value of the rouble. There are economists who believe that the rouble is overvalued. This is generally a good thing in terms of making payments in roubles and receiving salaries. But if we consider the opportunities for Russian exporters, the stronger the rouble, the weaker their positions. The goal is to strike a balance. This balance is now on a par with the buy and sell rates of foreign currency.
Sergei Brilev: Is it an optimal balance?
Dmitry Medvedev: You know, a balance is a balance. A balance is always optimal once it is reached.
Sergei Brilev: Mr Medvedev, Ukraine. The U-word that’s on everyone’s lips. We’ve heard it said a number of times that this is it, we won’t put up with this any longer, we must stop writing off Ukraine’s debts. Well, maybe now, after this week’s decision by the Verkhovna Rada, the time has finally come to stop being so forgiving and say: come on, guys, pay up.
Dmitry Medvedev: Strictly speaking, we are not putting up with anything intolerable. It is true that we have been telling our Ukrainian partners and neighbours that we do understand how tough their situation is. Keep in mind that just the inflation is at 35 percent. Imagine how much value has been lost. The GDP dropped by 17 or 18 percent. The situation is very difficult. And in this regard we acted very honourably, if you like, trying not to put a spoke in the wheels of the Ukrainian economy, which is on the brink of bankruptcy anyway.
At the same time we must get our money back. And we never said that we don’t want them to repay their debts. It was the same with gas as well. As you know, at some point we told them: enough, guys, you will only get the amount of gas that you paid for. And now they pay in dribs and drabs, transferring $20-30 million at a time. This is enough to pay for three, five or seven days of supplies. Well, it seems there is no money left. Or they are afraid to let it out of their hands. There are plenty of those who’d like to pocket the money. This is why, in this regard, the interests of our economy, our gas supplier, are ensured. The same goes for the money they borrowed from us. And what debts do they have? They took out a lot of commercial loans, and the loans were issued by Russian banks, many of them banks where the state is a stakeholder, including Sberbank, by the way.
Sergei Brilev: I believe VTB and Gazprombank were among the major players as well, weren’t they?
Dmitry Medevev: Yes. But there are other banks, major banks, private banks. But in fact, loans were provided to either Ukrainian state companies or the Ukrainian state. Then there is also the sovereign debt, the money Russia loaned to the Ukrainian government, Ukrainian state at some point.
Sergei Brilev: Do you mean the $3 billion lent at the end of Yanukovych’s presidency?
Dmitry Medvedev: Yes, just a short time before the coup that took place in Ukraine. As for the sovereign debt, it’s absolutely clear-cut. We have discussed this with the President recently. They have an obligation to repay this debt, and the deadline is at the end of this year. We have good reasons to ask for an early repayment right now, because they have already breached the terms of the contract, the so-called covenants dealing with the correlation of the sovereign debt to the GDP. But we did not do this. Finally, they must comply with all the payment obligations under the loan agreement and pay the interest in accordance with the existing schedule. The last statement made by the Verkhovna Rada and the Ukrainian government is very contradictory. They talk about private borrowings, but at the same time they’ve hinted that they are not going to pay the debts incurred by the Yanukovych government. This is reminiscent of the Bolsheviks’s refusal to repay the tsarist government’s debts. So if this is what they choose to do, it will mean Ukraine’s default, and this will affect their agreement with the International Monetary Fund. We will take the toughest stance in this case in defending our national interests.
Now, regarding the so-called private debts. They are not exactly private because, as we have found out, these loans were issued by Russian banks, including state-owned banks. Therefore, we cannot be indifferent regarding these debts. We will be seeking to recover them. Banks will be using all the tools at their disposal, including legal proceedings. The statement we have heard applies to the loans that were issued by various institutions, various companies, including from the Russian Federation. Although it sounds like the statements they heard in response from different countries, including the Russian Federation, have hit home and now they are saying that they have not done anything yet, that the government just has the right to do this. But you and I understand that sometimes intentions are more important than actions. Strictly speaking, from the legal point of view, we could say that the decision made by the Verkhovna Rada is sufficient reason to demand an early repayment of these debts.
Sergei Brilev: Mr Medvedev, one detail. You said that the IMF will act in a certain way. Does it mean that Russia, which is represented on the IMF Board, will block the decision to issue further loans to Ukraine if this matter is discussed at the next session of the International Monetary Fund?
Dmitry Medvedev: First,we have already said that we are not going to restructure anything. This is why these decisions emerged, some convulsive actions, incomprehensible decisions, which the Verkhovna Rada made and which the Ukrainian government is to make in the future. We cannot block anything ourselves, because to block something, you need to have a blocking share. But we will mention this as part of our vote. I am sure that such decisions will eventually affect the position of other creditors and other participants of the International Monetary Fund.
Sergei Brilev: Probably even those who feel for Kiev politically.
Dmitry Medvede: Even those who feel for Kiev, maybe. But you know what it’s like when
the government says: first you have to stand in the line and then maybe we will
repay you half of what we owe. No
one likes that.
Sergei Brilev: Let’s get back to Russia. Where did Russia’s agriculture come from? I remember what it was like before the anti-sanctions. Everybody believed that the industry is dead and heavy with imports. And suddenly here it is. Where was it hiding, Mr Medvedev?
Dmitry Medvedev: Let me disagree with you. That’s what it was like in the 1990s. There was a belief that the agricultural industry is our black hole and we shouldn’t even try to deal with it. We can buy everything abroad. In the past years that was not exactly true. At any rate, in the past ten or nine years, since the start of the national agricultural project, we have invested a lot of money in agriculture.
Sergei Brilev: You know, I’m not being completely on the level here. Let me explain. Of course, I’m a Muscovite who goes to Moscow supermarkets, where domestic produce is comparably scarce.
Dmitry Medvedev: Right.
Sergei Brilev: On the other hand, I travel across Russia a lot. For the past five or seven years, it has been really surprising. You go to a grocery store in Krasnoyarsk, for example, and there is a lot of produce, say, from the Urals. The horizontal links are working quite well there. However, the two capitals and many large cities seem to be outsiders.
Dmitry Medvedev: Sergei, it is pure convenience. Honestly, it was convenient for our supermarket chains. They had well established connections abroad. Naturally, they made profits and shared them with certain people. To tell the truth, their goal was to keep domestic producers away from large food store chains. But after what happened, everything fell into place. They just had to seek each other out. I remember my meeting with them. I gathered both our producers, large and small, on one side of the table and our largest retail chains on the other. You know, they said, “We apologise, we really didn’t even see each other working together, especially in retail.”
Sergei Brilev: You mean after the anti-sanctions were introduced?
Dmitry Medvedev: Yes, after the so-call anti-sanctions. It is a totally different story now. The situation is different in large cities, to say nothing of the regions. When I enter a store, and I try to do that whenever I travel around the country, to see what’s on the shelves and check prices… Despite a commonly held belief, it is not a store that had been “prepared” for an official visit. I often just get in a car, go for a drive and say, okay, let’s stop here. The Governor is not always happy. But we go there. I talk to the staff and customers. The majority of products are Russian. I ask them about specific, essential products such as sausages, meat, bread, butter, dairy. They are local. And since they’re local, the prices hardly ever change, or only slightly. The prices changed a little after the restrictive measures were introduced – more or less here and there. It is obvious why. But they have been stable lately. And the domestic products are not getting more expensive. It may be different for foreign produce, especially for fruit and some vegetables.
Therefore, our policy is import substitution in agriculture. We will be planting new orchards and develop the greenhouse industry. We will be improving livestock breeding where it is necessary. Let me remind you… Well, you said it yourself: where did it all come from? For example, there is no problem with poultry. We are hundred percent supplied with domestic chicken. We don’t need any more “Bush legs” or what was it called? I mean chicken and other meat from the United States. For other types of livestock we still require serious investment. Mainly beef and partially pork. And we will be making investments. We must by all means improve our own cattle breeding. Speaking of which, we have made huge progress recently, including in livestock. We now have what never existed in the Soviet times, that is beef stock farming. I mean cattle breeding specifically for meat production.
Sergei Brilev: So we don’t have to fly in bulls from North Dakota any more.
Dmitry Medvedev: We don’t have to import anything.
Sergei Brilev: There was a time when we had to.
Dmitry Medvedev: Yes, there was. But I hope that now we are gradually abandoning this practice. I believe our farming industry is taking off. The last thing I want to say is we have learnt to get excellent harvests. Last year, we harvested 105 million tonnes. That is a huge harvest. It is a harvest that can give us 25 million tonnes to export. In other words, our crop growing has made great progress. What does it mean? It means we can use part of the grain and legume harvest in cattle feeding, which is the best thing to do. It is better not to export crops but use them to improve cattle breeding. Because cattle is a higher-level product compared to crops, or a product with added value. Therefore, I believe that our farming industry is developing pretty well.
Finally, despite last
year being pretty difficult and despite the sanctions and the decline in
industrial production and many other negative factors, agriculture is growing steadily.
I’d even say it is the fastest growing sector in the Russian economy.
SergeiBrilev: Nevertheless, several questions about agriculture. Let me start with a minor issue. Palm oil is actively used right now in import substitution. It is an imported product as well.
Dmitry Medvedev's interview with Rossiya 1 TV network
Dmitry Medvedev: Does that bother you?
Sergei Brilev: You know,I’ve been hearing a lot that this is not very good. Take domestically produced cheeses… With palm oil, flavour is one thing and its impact on health is another. Have you heard about it? A minor issue, but still rather interesting.
Dmitry Medvedev: I have read about it, of course. I believe that these are, to a greater extent, some fears and phantoms that are very often spread. First, there is a wide variety of products. Some are absolutely natural products, products based on animal fats or on vegetable fats. Basically, there are options to choose. If you have concerns about palm oil, you should just read the labels and stay away from foods that contain it. Although it is not a health hazard. We have very strict control over all sanitary epidemiological issues and legislation in the sphere of consumer protection. In fact, let me tell you that legislation in this sphere (it may sound like a paradox for someone) has been very strict ever since the Soviet times. Second, I believe that there always must be options to choose from and every consumer should be able to purchase what he or she wants. This is what we aspire to, in fact.
Sergei Brilev: Another point about food products. A minor issue again, but a rather interesting one. Arkady Dvorkovich, your deputy, hinted at one point that some of the anti-sanctions on foods may be lifted. Which ones?
Dmitry Medvedev: We will be making these decisions (pardon me for such a pompous phrase) based on our national interests. Why? First, we were forced to impose these retaliatory restrictive measures because of the steps taken by our neighbours and trade partners. We did not start it. This is why we need to see which decisions they will make in the future, and only then, in August (because these restrictive counter-measures were imposed for a term of one year) we will decide whether to extend them, to partially change them or to lift them altogether.
But I would like to stress once again: we did not initiate this. These are retaliatory actions. This is the first point. And second, which is no less important: eventually, despite some problems we mentioned and a certain price hike, especially on imported goods, we managed to substantially increase our domestic potential during this time, these months. And this import substitution, which everybody talks about so much, has worked, in fact. Many agrarians are taking out loans, including high-interest loans, to be honest, expecting to sell their high quality Russian-made products in Russia and hoping that they will not be forced out by cheap, low-quality imported goods. In this regard, even with these restrictive measures removed – and this will happen sooner or later – we cannot and must not go back to the situation we had in the past.
Sergei Brilev: So the market structure has changed already within this year?
Dmitry Medvedev: Yes, the structure has changed already. If these measures remain in force, the market structure will continue changing in favour of Russian producers. We promised this and we will be working on this.
Finally, the last thing about restrictive measures. We made some adjustments but this did not concern specific food groups (although this decision was made regarding baby food), but those agricultural products that we have to bring in to be able to engage in production, in particular in fish farming. For instance, newly-hatched fish. We have made such decisions before and will probably have to make them again.
Sergei Brilev: Mr Medvedev, some European countries that are friendly towards Russia have requested, or hinted, that it would be good if anti-sanctions were removed against them specifically, rather than the entire European Union. The temptation for Russia to follow the “divide and rule” principle regarding the European Union is strong. Will Russia use this opportunity?
Dmitry Medvedev: You know that the European Union is our major partner. We are not on the best terms with EU states or the European Commission, let’s face it. But at the same time our trade amounts to almost $400 billion. This is our number one trade partner, even amidst the current sanctions, counter-measures and so forth. Second, there are WTO rules, and we follow them, including when we introduce restrictive counter-measures. Third, of course we look at our relations with specific states. But this does not mean that currently we will be making any decisions on allowing deliveries of, for example, products from one state and prohibiting deliveries from another state.
Sergei Brilev: The Czech Republic, Slovakia, Cyprus, Greece attended the [Victory] parade. But these are all EEC countries.
Dmitry Medvedev: Do you believe that decisions should be made based on this?
You know, I think it would be much easier and,
at the same time, more useful to sit down with our partners – the states with
which we have closer contacts, friendlier relations – and consider setting up
joint production in Russia, where our partners could supply their products for processing
in Russia. This would be the right way to go about it.
Sergei Brilev: To finish up with food security. We can see that you come back to the topics of food and medications from one meeting agenda into another. Although it is definitely not a winning topic. There are calls to switch to price regulation. The Government has been following the market road. And we should give it credit, the market does change the situation at times. How did you evade the temptation to switch to price regulation, which is part of genetic memory of the majority of Russians? Or will you still occasionally resort to this method?
Dmitry Medvedev: You have in fact answered the question you have asked. At any rate, like most people of my generation, I remember food store shelves and pharmacies during the Soviet era, when prices were regulated and there was nothing to buy. Just absolutely nothing! You and I know: as soon as stiff regulation is introduced, chances are that all the goods will vanish. It will simply become unprofitable to buy, and consequently, to sell them. That is why we don’t use this tool, although legally it is possible. If there is an unmanageable price hike over a period of three months, regulation can be introduced. But this is a very poor method, and I will reiterate that it leads to a blind alley.
Sergei Brilev: And those three months of abrupt hikes have passed anyway.
Dmitry Medvedev: Yes, sure. The hikes are behind us and the rouble has rallied. Second, we do have means and funds for support. For instance, if we speak about medications, which you mentioned just now, we have a group of drugs called vital and indispensable for life. I think there are around 600 such drugs, and we do in fact regulate their prices. This is the reason they went up by as little as about six to seven percent in the past period. And the prices of the unregulated segment rose much higher, by up to 15–20 percent, and some drugs have become even more expensive. Thus regarding medication… the situation is more complicated there. It turned out to be easy for us to fill the shelves with Russian-made foods. We don’t have empty shelves. Things are generally fine in the shops and everything looks all right.
Sergei Brilev: Yet Ukrainian newspapers write that people are starving here…
Dmitry Medvedev: Ukrainian newspapers write a lot of stuff. As to medications, things are more complicated since we are unable to launch manufacturing of the whole range of certain types of drugs or to start buying generics instead, that is, drugs that do not have patent protection. Well, we still have to apply regulation here but within certain limits and only with regard to life-saving drugs. And we will keep doing it. We have 16 billion roubles allocated for it in our anti-crisis plan. In addition, the regions are also handling this issue. So in this area we are not going to let the situation become unmanageable, whatever happens.
Sergei Brilev: Mr Medvedev, where would you like to see an explosion of import substitution, just like in agriculture, an explosion in a positive sense? Where is the situation lagging far behind the momentum you would like to see?
Dmitry Medvedev: You see, I would like import substitution in all the key industries. And we actually have such plans, we have import substitution blueprints for 20 industries. In some cases the plans are fairly short-term, in others – long-term, but we do have such plans. They cover engineering, they cover our key industries such as ship-building, aircraft manufacturing and a number of others – things are much more complicated there and it will require a lot of time. But we have created an industry support fund, we have the anti-crisis plan working, and we shall keep funding all those steps. Let me stress it, these are not decisions made for a six month period but for a longer term.
Sergei Brilev: Mr Medvedev, do you intend to keep working beyond the age of 60?
Dmitry Medvedev: I’m ready to work as long as I can. Why do you ask? I believe that a person remains active, full of life, in high spirits and good health as long as he works. At least this is my opinion. Other people may have different perspectives. Someone may just want to stop and get some rest. There is nothing reprehensible about it. But my take on this issue is that as long as a person is able to work, he should do it for the benefit of his family, community and country. I’m ready to work as long as I can.
Sergei Brilev: Let’s consider this matter from the perspective of those who do not want to work after the age of 60. This is a yes or no question. Are you for or against raising the retirement age?
Dmitry Medvedev: You know, we have asked ourselves this question a number of times and discussed it with experts. It goes without saying that we also talked to ordinary people about it. Decisions of this kind should take into account many factors. First, and probably most importantly, it depends on the way we live and the number of year we live. Today, average life expectancy in Russia is 71 years: 76 years for women and 65 years for men. There has been substantial progress in this area. Let me remind you that not too long ago men lived 59 years on average, and women 66-67 years. Even these figures differ greatly from the 1930s. I checked with statistics experts, and it turns out that average life expectancy in 1932 was 31 years. Can you imagine that? 31 years. Of course, there was the civil war and famine, but still the country came a long way in the 20th century.
This goes to say that the decision on the retirement age should be pegged to the key indicator: life expectancy and quality. This is the first point. Second, and equally importantly, is what people want. If people want to work, they should have this opportunity. Only recently I addressed the State Duma. The colleagues in parliament told me: we are ready to lead by example – we like our jobs and are ready to work until a certain age, until 65 or some other age. Maybe civil servants are also willing to do so. If people are asking for it, the Government is ready to review this issue. Our colleagues in parliament will do their part. So the decision you have asked about is indeed very complicated. It should be taken only after discussing it thoroughly with the people and experts. It should be based on the factors I’ve mentioned: life expectancy and what the people want. However, it does not mean that we can’t take certain steps in this direction for separate categories, such as civil servants or MPs.
Sergei Brilev: Mr Medvedev, let’s discuss pensions. A decision has been adopted regarding the cumulative part of state pensions. Could you provide us with an insight into the debates on this issue, if it’s not a secret? How was the final decision reached?
Dmitry Medvedev: Discussions on issues like that are always very animated. I think that’s absolutely normal. The Government has come here as a team. Make no mistake, there is place for debates within a team, discussions should take place, but once a decision is adopted, it should be rigorously implemented. There is no doubt that discussions are beneficial in themselves. It is true that this issue was subject to intense debate. We weighed all the pros and cons. As you know, at a certain point, more than a decade ago, the so-called cumulative element was introduced. There are cabinet members and experts who think that it may not be needed. There was a proposal to transform this cumulative part into voluntary contributions: those who want to make such savings should be free to do so on a voluntary basis. But at the end of the day, when we took the decision to keep the cumulative part of pensions in place, where did it stem from? From an understanding that the pension system should be stable and should not be constantly torn apart. It’s not an option to say: We have adopted a decision, it turned out that it was no good, so let’s take another decision. Meanwhile, people have already invested in this system, they have taken their own decisions. This is what matters first and foremost. Second, it is very important for the economy to have long-term investment funds that would finance economic development and investment projects. It is the pension system that serves as a source of such funding across the world. Taking all these factors into account, we decided that the cumulative part should remain in place in its existing form, i.e. as a mandatory cumulative part of pensions.
Sergei Brilev: Does this mean that you will view any further discussions on this issue as a breach of discipline?
Dmitry Medvedev: What is there to discuss? The decision has been taken. Everything stays as it used to be.
Sergei Brilev: You have mentioned that the Government has passed the equator in terms of the constitutional term of the current executive. Three years separate us from the presidential election, when the Government is due to resign. Do you intend to work in your current capacity for these three years? Everything goes as planned?
Dmitry Medvedev: In Russia, the Government is not formed by itself, but by the President. All the Prime Minister does is submit to the President the list of prospective Government members. Just like anywhere in the world, the Government remains in place as long as the President has confidence in it. I believe that this is the way it should be. The current cabinet is ready to work. Moreover, I can say that over these years the Government has become a team, a group of people who are striving to achieve objectives that are very important for our country. This crucial objective is actually quite simple: providing the people with an opportunity to live normal lives as in modern developed countries. This is what our efforts are all about.
Sergei Brilev: Thank you, Mr Medvedev. Hope your seminar goes on as well as it began.
Dmitry Medvedev: Thank you very much.
