Agenda: Presidential instructions and legislative initiatives to increase economic stability and social protection amid toughening sanctions.
Mikhail Mishustin: Good afternoon, colleagues.
Government meeting
Before we start on today’s agenda, I would like to say a few words about a recently made decision.
Starting at midnight on 18 March, all restrictions on the movement of citizens within the Union State of Russia and Belarus will be lifted. I discussed this with Prime Minister Roman Golovchenko at the beginning of the week in Moscow and had this decision approved by the President.
Freedom of movement is important for the development of trade and economic cooperation and humanitarian contacts between our brotherly peoples. Today this is particularly relevant amid toughening restrictions on behalf of unfriendly countries.
I am convinced that stronger integration within the Union State will be the best response to the sanctions pressure against Russia and Belarus.
Now, let’s talk about the tasks set by the President during the meeting yesterday.
First and foremost, we must work on improving social protection. This is an essential measure considering that, as the President said, the new packages of external sanctions are hitting every family.
It is important to continue supporting parents. In May, we will start paying benefits to low-income parents of children aged 8 to 16. These benefits will be paid for the period starting 1 April. We must adjust the system in order to promptly monitor the financial standing of this category of Russian citizens. It will help us to provide aid faster. This is particularly important if parents lose their jobs or face other difficulties.
Another Presidential instruction is to increase the amount of all social benefits, including welfare, retirement benefits, public-sector wages, the subsistence rate and minimum wage. I want to ask the Ministry of Labour and Social Protection and the Finance Ministry to present the parameters of such rises to the Government.
Of course, these measures must be closely coordinated with regional officials. The Government is monitoring the situation in the Russian regions very closely. Regional representatives participate in the meetings of our operational headquarters and industry-specific commissions.
Additionally, the President in his Executive Order granted heads of Russian regions additional authority to ensure the socioeconomic stability of their entities. It is important to take this approach into account in our work together, in the contacts between the regions and ministries and agencies, as well as in the work of their territorial divisions, and to coordinate this work with regional officials, helping them to deal with any existing issues and providing all support to the operational headquarters responsible for economic development that will be headed by governors.
The state of regional budgets is a key issue. We need to act promptly, so that Russian regions will be able to obtain a delay in their budget loan payments in 2022 and to obtain credit lines totalling ten percent of each region’s overall revenue. The President has also instructed us to assess prospects for additionally indexing subsidies to equalise budget provision levels.
He noted that various projects and construction sites should obtain federal funding in full volume.
The President also supported a number of proposals, drafted by us, including those to increase the volume of advance payments and reduce payment deadlines under state contracts.
The Government will continue to create the most favourable business environment, while removing administrative barriers that hamper private initiative. The speed of the import substitution effort now depends on the successful performance of our companies and enterprises. Our agenda already includes a number of decisions in this sphere, and I will discuss them later on.
At the same time, we cannot afford to overcome current difficulties through price hikes alone. As the President has noted, greater supply should serve to stabilise prices.
It is necessary to closely follow fluctuating prices for staple goods that must always be available. Obviously, this includes medications and other medical items. Each sector has goods that are no less important, and we will have to constantly monitor their prices.
Yesterday, the President dwelt separately on efforts to support the labour market.
Today, many foreign companies have announced plans to suspend or terminate their business operations. Our main task is to prevent unemployment and to help those who have already lost their jobs.
First of all, we will expand the capabilities of the employment service for this purpose. The relevant Government resolution has been signed.
While earlier, only jobless people could obtain government services there, throughout 2022 people who are at risk of losing their jobs will also be eligible to do this. This includes situations when a company has announced plans to axe jobs or to shut down. This also concerns employees who were set off for part-time work or shifted to unpaid leave.
They will obtain the required assistance at employment centres, including job placement, retraining programmes and an opportunity to start their own businesses, pending official layoffs. This makes it possible for people to take preventive action and adapt more quickly to the changing market.
Today, the Government will allocate significant funding, a total of almost 40 billion roubles, for the first package of measures to support employment, which are included in the priority action plan. The bulk of this amount – more than 25.5 billion roubles – will go towards the creation of temporary vacancies in Russian regions for people at risk of losing their jobs, as well as to organise paying community works for those who have registered with the labour exchange to look for a new job. This support measure has the capacity to benefit up to 400,000 people, if necessary.
We will allocate over 7 billion roubles for the implementation of regional programmes to continue vocational education or retraining for employees of industrial enterprises. This should help save jobs if companies have to go into a different line of business. New competencies and skills will give people more opportunities for future employment. As many as 125,000 Russians will be able to take advantage of this option.
The remaining funds – almost 6 billion roubles – will be paid as grants to non-profit organisations so that they can conduct retraining courses. At least 100,000 more people will be able to gain in-demand skills, and about 75,000 will be able to start their own businesses or register as self-employed.
As I said, this is only a part of the measures that the Government is preparing to support employment. We will continue to work with the regions and industries to reduce volatility in the labour market and help people cope with the current situation.
Other important items on the agenda include lending, in particular borrowers now paying their loans with a variable interest rate. Many of them took out such loans when inflation was moderate. They have now found themselves in a difficult situation, faced with a shortage of liquidity and, at the same time, with a significant increase in debt servicing costs, which creates risks not only for themselves, but also for the whole economy.
To support such borrowers, we will make a number of amendments to relevant legal acts. They will make it possible to restructure debt and facilitate payments at a time when commodity and supply chains are being reconfigured.
This opportunity will be given to representatives of large businesses, small and medium-sized companies, as well as individuals – except mortgage loans, which will be regulated by different acts now in the works.
Each category of borrowers will use its own procedure for restructuring and servicing their debt, in terms of duration of the grace period and revision of interest rates.
Yesterday, the President also emphasised the need to continue supporting industrial and commercial enterprises.
They account for almost half of the gross domestic product and half of the workforce across Russia. It is no less important to create favourable conditions for the smooth operation of major strategic companies that find themselves in a difficult situation.
During the previous meeting of the Government Commission on the Sustainable Development of the Russian Economy amid Sanctions, we had an in-depth discussion on new initiatives. A special programme has been prepared to replenish working capital. This is funding that our companies need to finance their operations, in particular, to buy raw materials and pay salaries. The Government will allocate 40 billion roubles for its implementation.
Up to 10 billion roubles will be allocated per company for a year, and up to 30 billion roubles for a group of companies.
Another issue has to do with additional support for agriculture. Its successful development is a crucial factor in our food security, especially amid the sanctions. We have held several discussions on these matters at operational headquarters’ meetings.
As the President noted, our agricultural producers can operate very well. They have proved this many times in recent years. To help them keep up the pace despite the external restrictions, we will introduce an additional support measure for backbone companies. Such agricultural companies will have simplified access to low interest loans.
The Government will allocate over 26 billion roubles for this. The funds will be issued to the lending organisations that cooperate with backbone agricultural companies. Loans of up to 5 billion roubles will be issued for up to one year.
These low interest loans will be issued on certain conditions, including maintaining up to 90 percent of their jobs.
We believe that this will help backbone agricultural companies take out low interest working capital loans worth approximately 225 billion roubles. Overall, this measure will ensure the sustainable operation of the sector.
Another crucial element is support for small and medium-sized businesses, which employ millions of our citizens.
We have a programme of low-interest lending to various sectors under the national project Small and Medium-Sized Businesses and Support for Individual Entrepreneurial Initiatives. It is also available to sole proprietors and self-employed persons.
The Government has decided to allocate an additional 14 billion roubles to subsidise lending rates. This will give our businesses broader access to soft loans. This will come in handy in light of the increase in the key interest rate by the Central Bank.
When implementing this decision, it is important to avoid red tape as much as possible, so that businesses will be able to quickly replenish their working capital and find investment for their new projects. We believe that this year small and medium-sized companies will be able to take out at least 500 billion roubles under subsidised interest rate loan programmes.
