“The Government of the Russian Federation <…> shall submit to the State Duma annual reports on the Government’s performance, including on issues formulated by the State Duma.” (Constitution of the Russian Federation, Article 114, Clause 1, Subclause “a”).
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Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Annual Government report on its performance to the State Duma
Mikhail Mishustin: Mr Volodin, Ms Matviyenko, deputies of the State Duma, colleagues.
Just yesterday, we learned the tragic news about the passing of Vladimir Zhirinovsky, a remarkable politician and an outstanding professional. I knew him personally.
In fact, we have known each other since 1992. He often had his own position on our country’s development. However, when it came to the interests of our people and state, he was a true patriot and statesman.
He established a party in one of the most challenging periods of Russia’s history. All these years, his party won parliamentary seats. Mr Zhirinovsky always proactively participated in Russia’s political life.
Mr Volodin and I discussed whether it would be advisable to postpone our meeting but concluded that it would be better not to change dates. Having devoted his life to serving his Motherland, I think that Mr Zhirinovsky would not cancel the Government report to the State Duma and the debate on our new goals considering the challenges the country is facing.
Annual Government report on its performance to the State Duma
Colleagues,
There are many new faces in the State Duma following the election last autumn. In fact, this is the first time I see many of you in this format. Today, it would not be an exaggeration to say that the Government and the parliament are facing historic challenges and goals.
A real economic war is being waged against Russia. Whether we succeed in adapting the economy to this new reality and put it back on track for sustainable development hinges upon our constructive cooperation.
I do realise that you expect the Government to share its assessment of the situation. People want to know what measures the cabinet is taking to address the economic risks. Of course, I will cover these matters during today’s report.
Under the Constitution, the Government must make annual performance reports. With this in mind, I will begin my report by sharing some of the key results which gave our economy the safety margin it needs today.
Last year, we lived with the pandemic, just like the year before. This crisis has not spared a single region or family. In this challenging environment, we developed a new decision-making framework based on analysing performance under all applicable laws and regulations, as well as taking into consideration dozens of proposals from across the country. We worked with the parliament to devise and pass decisions and measures to support people and the economy.
Despite the pandemic, not only did we create a safety margin, but also worked on the tasks set by the President. This effort primarily focused on the national development goals as set forth by the President in his executive order.
During the coronavirus pandemic, we learned to be more effective when developing anti-crisis measures at all stages, from conception to implementation. This was made possible by the seamless framework we created together with you, members of the State Duma and senators. Guided by this approach, we have been able to streamline the legislative process without sacrificing efficiency.
We designed and introduced a new governance model, enabling us to better coordinate our actions, promptly respond to challenges and draft the decisions needed for updating the national projects and government programmes, as well as devise new initiatives for promoting socioeconomic development and combining all these measures within a single plan for achieving the national goals.
Saving lives and preserving the health of our people – this was the main objective set by the President in his pandemic-era Address to the Federal Assembly. We focused our efforts on this task, while seeking to preserve jobs and household incomes, and support businesses.
Russia started posting robust and confident economic growth last year. Most enterprises were able to readjust their businesses and learned to live and develop despite the Covid-19 risks. In the second quarter of 2021, Russia achieved pre-pandemic GDP levels. Over 2021 as a whole, Russia’s GDP grew by 4.7 percent. Russia’s non-commodity and non-energy exports hit an all-time high, soaring by almost 40 percent, to reach about $200 billion.
Industry and trade were the main contributors to economic growth, primarily because of domestic demand. The processing sector increased by five percent. The engineering sector expanded by almost ten percent, and in particular, lorry production increased by 30 percent.
We were able to restore the labour market, and unemployment levels fell to an all-time low of 4.3 percent, by September. We attained pre-pandemic employment levels, as instructed by the President.
Annual Government report on its performance to the State Duma
During the two years of the Covid-19 pandemic, the Russian economy grew five times faster than the industrial world’s economies. Colleagues, just think of it: five times faster. Foreign analysts and the International Monetary Fund confirm this. We therefore created a foundation for building a solid and modern economy.
While dealing with the Covid-19 pandemic, we also created a foundation for further improving the quality of medical treatment.
During my nationwide working trips, I saw that the state of many hospitals and outpatient clinics left a lot to be desired. Some of them did not have enough equipment. We made the required onsite decisions to rectify this situation, including in Dagestan, the Ulyanovsk and Sverdlovsk regions, Kursk and on the Kuril Islands.
People complain about similar problems all over Russia. I know this from my own experience. Despite all the difficulties, we worked consistently and took measures to provide high quality services and comfortable conditions at medical institutions.
Last year, the regions renovated over 1,000 outpatient clinics and purchased over 37,000 pieces of medical equipment and 5,500 special-purpose vehicles. Today, doctors and paramedics make use of these to treat patients even in remote areas. I believe that this is our most important achievement. We have delivered more than 1,600 ambulances to the regions because every minute counts when it comes to saving human lives.
Last year, we built and replaced almost 3,000 primary health care units, outpatient facilities and clinics for eight million rural residents. These primary health care units have been transformed into modern complexes with the necessary equipment, and their specialists do not just take a patient’s blood pressure or provide them with pills.
We have delivered almost 1,500 mobile medical complexes to communities where it is impossible to set up. Doctors have already examined more than 3.5 million people there, and we will continue this work.
Our next issue has to do with planned medical assistance. We must relaunch it in full measure across the country. I would like to ask the heads of regions to ensure without any delay that people have free access to consultations with the relevant specialists and receive elective surgery. It is important to ensure that everyone has access to medical check-ups and periodic screening examinations. Nearly 50 million people had them last year, and some 2 million of these had thorough post-Covid medical examinations.
They showed that many people had complications. Acting on the initiative of the President, we expanded the medical rehabilitation programme to make it available to more people with various diagnoses. Over 8 billion roubles will be allocated soon for supplying equipment to medical rehabilitation departments in the regions.
The volume of high-tech medical assistance has increased radically. The payment system has been changed to provide funds from the mandatory medical insurance fund, which allowed over 1 million people to receive free medical treatment at federal hospitals, including complicated surgeries and surgical procedures that can bring people back to health.
Annual Government report on its performance to the State Duma
I would like to say a few words about children with serious diseases. When such diagnoses are made, parents are ready to do their best to save their children. This can cost a great deal. To help buy expensive medicines and organise treatment for such children, we have established the Circle of Kindness Foundation at the President’s initiative. Thanks to it, thousands of children received expensive medical assistance last year.
A few words about those who need bone-marrow transplants. This procedure often helps children with leukaemia overcome their illness.
The Government has submitted a draft law on the establishment of a Federal Registry of Bone-Marrow Donors to the State Duma, which has adopted it in the first reading. The registry will help find donors throughout the country much more quickly. Colleagues, I would like to ask you to expedite the hearing of this draft law. It will help save hundreds of lives.
Improving the quality of life and well-being of our citizens is another Government priority. We addressed this task so as to give priority assistance to those who need it the most.
As per the President’s initiative, we have adjusted pensions to offset inflation. Last September, 43 million pensioners received an additional 10,000 roubles. By decision of the head of state, targeted assistance was provided to families with children. Families with school-age children received 10,000 roubles per child, which helped nearly 21 million children prepare for the new academic year. Parents received a cashback on children’s summer camp vouchers. Thanks to this measure, some 400,000 children had interesting and healthy summer vacations.
There will be more of such children this year, because we have extended the programme at the President’s instructions. Parents can buy vouchers as we speak, and we will give them a 50 percent cashback.
The maternity capital programme, which was available to 1 million families last year, will be extended as well.
We have not stopped paying out special allowances to families for the third and subsequent child/children until they reach the age of three years, and also to low-income families for children aged from three to seven years. Last year, we changed the procedure for calculating such payments depending on the financial shape of each particular family. Such payments have been approved for over 3 million children.
We have also changed the sick leave payment procedure for caring for a child under 8 years old. This payment amounts now to 100 percent of the average pay regardless of the length of service, which is important for young mothers and fathers. This decision was made public in the President’s address.
As per the President’s initiative, we have introduced two new state benefits. One of them has been paid out to nearly 500,000 pregnant women in financially challenging circumstances, and the other has been issued to over 1.5 million children aged 8-17 years in single-parent families.
Moreover, we have adopted a procedure so that people do not have to go anywhere or fill out heaps of documents to claim such benefits. We have introduced a convenient digital format for this and other measures within the framework of the social treasury project.
People want us to deal with practical matters that have a bearing on the quality of their lives. Adequate social assistance and modern healthcare is what people need in every city and village, along with the ability to give their children a good education.
I have visited many regions and everywhere, be it the Altai Territory, the Chechen Republic, the Tomsk Region or the Republic of Tyva, local parents told me how much they are looking forward to seeing new kindergartens and schools in their areas.
Opening 324 new kindergartens last year is not just about the number of buildings. It means that more than 50,000 kids are going to new kindergartens. We also managed to open about 100 new schools. By 2025, the President’s instructions will be completely fulfilled and at least 1,300 new secondary schools will be built.
We have also launched a major renovation programme for existing schools. Major renovation will go beyond fixing up buildings. Schools are more than just walls. There must also be proper equipment for studying. And we will solve this problem.
Also, as part of complying with the President’s address, we have purchased over 4,000 school buses for kids who live far away from their schools, to provide a safe and comfortable commute.
Also at the President’s initiative and in cooperation with regional officials, we now provide primary school students with free hot meals. They are available to 7.5 million kids. Although it is not direct financial aid, it is still tangible help for their families, especially if they have more than one child and if both parents work full time. We spoke about this recently at a meeting with the United Russia party faction. I asked my deputy Tatyana Golikova to personally monitor this issue.
During my visit to Barnaul, I discussed internet access in schools with local teachers. All secondary schools are now connected to the internet.
Broadband internet access is now available in all hospitals, outpatient clinics, village first-aid stations, colleges and universities – that is, more than 75,000 socially important facilities. Internet access points have opened in 14,000 small residential areas with 100 to 500 residents. Every person must be able to have internet access, regardless of their place of residence.
Annual Government report on its performance to the State Duma
Despite the difficulties of the previous year, we continued to address the issue of providing our citizens with reliable and environmentally clean sources of energy. In his Address to the Federal Assembly, the President issued instructions to move gas infrastructure close to the borders of private households in the residential areas connected to gas supplies, for no charge. I met with residents of Sakhalin whose houses were connected to gas and I saw how important it was to them. They had had to heat their homes using furnaces for so many years. They could not even believe that was finally happening. There was so much joy in their eyes. There will be more good stories like this, as we can see from the number of requests for gas connections (over 750,000). More than 300,000 contracts have been signed so far. These are not just kilometres of gas pipelines. These are hundreds of thousands of families that will have gas supply. We must not let them down. All these plans will be fulfilled.
Colleagues,
These results in the social sphere, public healthcare and education would have been impossible without a steady recovery of the Russian economy, thanks to the crucial role of our businesspeople, their energy and initiative.
During the pandemic, we primarily focused on small and medium-sized businesses as they mostly belong to the industries hit by the coronavirus the hardest. These industries include consumer services, tourism, hospitality and some others. They did not have enough reserve power unlike large organisations.
The Government’s decisions helped many businesses to stay operational and keep jobs, making sure that not only entrepreneurs receive their profit but also their workers receive their wages, to provide for their families. More than 25 million people are involved in these industries.
We can see that the measures have proven their effectiveness. For example, the total number of workers for the companies that benefited from the FOT 2.0 programme has increased by around 400,000 people over its entire term. Together with FOT 3.0, almost 6.5 million jobs have been retained. The total amount of soft loans issued under these programmes is worth around 600 billion roubles.
The developments of the past couple of years, first caused by the pandemic and now by the actions of the unfriendly countries, demonstrate how relevant it is to expand domestic production. Today import substitution is a matter of Russia’s economic sovereignty.
We have achieved pretty decent results in some sectors. I will highlight some major industries. And the first of them is agriculture.
Two years ago, the President approved a new Food Security Doctrine, which the agricultural industry has been implementing very effectively.
Our country is fully self-sufficient – by more than 100 percent – in terms of grain, vegetable oil, fish and meat. With regard to grain and vegetable oil, we are ahead of the doctrine benchmarks by almost 50 percent. Our self-reliance in terms of potatoes, milk and vegetables, much of which are produced at small and private farms, is at a fairly high level of over 80 percent.
We continued to subsidise purchases of domestic agricultural equipment and low-cost leasing programmes from the federal budget, which allowed farmers to receive over 32,000 tractors, harvesters, and other necessary equipment.
Of course, there is more work to be done. Farmers need more Russian seeds which currently account for almost two thirds. The President set the task of achieving 75 percent security in this area in eight years. We will increase production, especially given the current challenging circumstances.
With support from the state, 32 selection and seed production and three selection and breeding centres have been created. As directed by the President, we will allocate a minimum of 5 billion roubles additionally to support these centres. We hope that this will help meet the needs of our farmers. So that they have sufficient funds for ongoing field work and investment, we will retain and expand the soft lending system. Over 340 billion roubles have been allocated for the development of the agro-industrial and fishery sectors. This investment has already yielded real benefits with these companies providing Russian consumers with necessary products.
The construction industry is showing significant growth rates as well. Just like agriculture, it is almost independent of imports.
Over the past year, over 4 million families have improved their living conditions with almost 93 million sq m of housing put on the market. This is an all-time high volume of construction in our country, even taking the Soviet period into consideration.
Annual Government report on its performance to the State Duma
Mortgages are the most important driver behind housing construction. Almost 2 million mortgage loans have been taken out, with a quarter of them under a soft-loan programme that covers new housing developments.
As many as 132,000 people who were living in dilapidated accommodation have moved out of their old homes, which were unfit for human habitation. We set aside an additional 160 billion roubles for this project. People have finally moved into new flats. People in the Sakhalin Region told me about this during my working trip to the Far Eastern Federal District.
This work is very important, and it will continue throughout the country. Almost 70,000 more people moved into new flats in the first quarter of this year alone. On behalf of the President, we are now drafting a new relocation programme, with 45 billion roubles set aside for its implementation over the next two years.
Of course, we will continue to create a comfortable urban environment and for this purpose bring local authorities onboard. Last year, we expanded small towns and historical settlements’ access to the all-Russian competition of the best projects to create a comfortable urban environment by increasing the amount of existing grants from 5 billion to 10 billion roubles. Using these funds, the winners will be able to put their ideas into practice, which will transform the appearance of many towns and cities and also create new jobs. Ultimately, it will improve the quality of life in these areas.
The road construction sector performed exceedingly well with over 160 million sq m of paving brought up to code, which is the largest area of repaired roads in the history of our country.
This was also achieved through advanced financing and more flexible capital investment management.
Frankly, Mr Volodin and Ms Matvienko have always paid a lot of attention to road construction, and just the other day we had an in-depth discussion about our future plans to continue the road construction programmes. You were the ones to propose an assessment of whether it was feasible, while considering the annual budget, to allocate additional funds for the expansion of the regional road network. Overall, almost 425 billion roubles were allocated for advance financing of motorway construction last year, and an additional 163 billion roubles were earmarked for the next three years. Also, as per the President’s instruction, we will allocate another 120 billion roubles to this end, which will help us achieve national development goals ahead of schedule.
A major East-West infrastructure project that includes two motorways, with a total length of over 1,600 km, is underway. We are considering the possibility of a phased-in launch of the first sections of the Moscow-Kazan motorway this year and next year. The design and site development work for the Moscow-Yekaterinburg motorway is underway. This year, we will start full-scale construction.
We are also considering the construction of a road to Novosibirsk, with possible access to Mongolia and China. In addition to motorways, we are building city bypasses, including Krasnodar, Aksai, Kemerovo, Kaliningrad, Yekaterinburg and several other cities.
Road construction and repair are proceeding at a fairly fast pace thanks to the major joint efforts that went into amending legislation, including the reduction of the investment and construction cycle.
The State Duma and the Federation Council’s support in this matter is extremely important to us. The work will continue as part of the implementation of the plan of priority measures.
We continue paying special attention to supporting very important backbone sectors of the economy. The aviation industry and shipbuilding feature prominently among them.
In the shipbuilding sector, last year we completed a nuclear icebreaker, called Sibir (Siberia), under a new project. Three more nuclear icebreakers of this family are currently being built in the shipyards. Designed to ensure year-round navigation along the Northern Sea Route, they form the bedrock of Russia’s future icebreaker fleet.
We see demand for these routes from businesses, especially in the current environment, and will consistently strive to deliver on the goal set by the President to increase cargo traffic to 80 million tonnes by 2024.
In the aviation sector, the Government has been hard at work. Last year, we allocated 220 billion roubles for developing the aviation industry as part of a government programme.
I have personally inspected the aviation industry during my numerous working trips. We visited almost all key industrial sites over the past year, including the Irkut Corporation in Irkutsk, Sukhoi in Komsomolsk-on-Amur, Aviastar in Ulyanovsk, the Ural Works of Civil Aviation in Yekaterinburg, Aviaavtomatika in Kursk, and the VASO plant in Voronezh.
It is essential that this sector achieves technological independence from foreign materials and parts, which would remove some of the critical risks, including protecting us from unfair practices by our competitors. This includes trade restrictions for supplying composite materials for making the wing of the MC-21 aircraft. Our manufacturers have already learned to make them. The aircraft with a Russian-made composite wing took to the sky for the first time in December 2021.
The aviation sector plans to complete its effort to replace imported units and nodes in this model in a matter of two or three years. More than 60 billion roubles have already been allocated to this effect.
I would like to make a special emphasis on the regions.
Annual Government report on its performance to the State Duma
In keeping with the President’s decision, the Russian regions can postpone the deadline for repaying budget loans worth over 200 billion roubles. They have been able to benefit from budget loans to restructure over 300 billion in private debt. By the way, 30 regions used this opportunity.
The President also instructed us to fully relieve them from the obligation to pay back budget loans, while helping them to clear their private debts.
At the same time, the Russian regions increased their tax and non-tax revenue by more than 26 percent last year, with the consolidated budget surplus of the regions exceeding 660 billion roubles.
This results from measures which enabled us to overhaul the budget policy. Primarily, we removed several restrictions to empower the Russian regions. We will stick with this approach moving forward. By the way, the regions have made active use of these provisions.
They can channel the 200 billion roubles freed up by debt restructuring to support their economies and launch new projects. They will generate profits and attract investment, including for building infrastructure and creating new jobs.
Recently we took another decision to help regions finance their spending by increasing treasury loans to 10 percent of their revenue.
The Government launched a mechanism for supporting infrastructure projects in the regions. They can use it to get funds, some 2 trillion roubles in total, at subsidised rates, even if they still have to repay them in the future.
These tools include budget loans for infrastructure. Last year, we granted 500 billion roubles worth of these loans, and expect to spend as much this year, which will bring the total up to 1 trillion roubles. Regions have never received this kind of money for their infrastructure.
In keeping with the President’s initiative, we also launched infrastructure bonds. Last year, we issued 20 billion worth of them and intend to raise up to 150 billion roubles this way.
We are paying special attention to developing the Far East and the Arctic. The creation of business opportunities is fundamental to improving living standards. In the past year, investors, that received benefits and preferences, have put almost 700 billion roubles into the economy of these territories, creating over 20,000 new jobs.
A year ago, the President suggested introducing tax incentives for companies that establish a presence on the Kurile Islands. We discussed this with you in detail. During my trip to the Far East, I talked about this with local residents on the Kuriles. Taking into account their proposals, we drafted and adopted documents and regulations. Now entrepreneurs and businesses can avail themselves of these new tax rules.
We also discussed transport accessibility during this trip. Following the President’s instructions, uniform air service was established to connect the local regions and provide easy travel for those residents. Now, people can fly on 20 socially significant routes. Most importantly, airfare is affordable. Last year, we allocated over 1 billion roubles to support this effort.
We also provided 5.5 billion roubles to continue another programme – air service to Moscow, St. Petersburg and Crimea with discounted fares. About half a million people have already used these airfares.
In the Far East, we are trying to create conditions that encourage local people to link their future with this region rather than try to leave. This is the goal set by the President. We are doing all we can to fulfil it.
Providing people with their own housing is of key importance. Over 38,000 young families have already used the Far Eastern mortgage programme. And more than 100,000 have received a Far Eastern hectare of land.
There is one issue on which the Government has always received unreserved support from all parliamentary parties in the Duma – the development of rural areas. I would like to thank all of you for your attention to this matter.
Annual Government report on its performance to the State Duma
Last year, we earmarked over 38 billion roubles for implementing the relevant state programme. Considering the funds allocated under other relevant programmes, the total appropriations for this purpose exceeded 480 billion roubles. This is much more than any other sector received, which allowed us to successfully address infrastructure issues. This is not limited to roads, gas and clean water distribution. It also includes a house, everyone’s dream. The rural mortgage programme is helpful in this respect. The interest rates are the lowest in the country – not above 3 percent. Last year, we allocated over 8 billion roubles for this, and 52,000 families moved to their own housing.
We are trying to make rural areas more comfortable. Importantly, residents themselves suggest projects for upgrading their neighbourhoods. We will continue working on this task together with them.
Colleagues,
The President declared last year the Year of Science and Technology, and its agenda was indeed very busy. Fulfilling the presidential instruction, we gave a new lease on life to the Znaniye (Knowledge) national society. Now it is again helping millions of people, especially young people, to develop their world outlook and discover new things all over the country.
I must certainly mention the great successes of our schoolchildren. They won 38 medals in eight international academic competitions – in physics, mathematics, informatics, geography, biology, chemistry, astronomy and astrophysics. We are proud of our kids! Their goal will be to reveal our country’s enormous scientific potential.
To allow young people in all regions to receive quality and in-demand education, the Government has launched Priority-2030, a large programme for higher school development. Under this programme, universities in all Russian regions receive grants of over 100 million roubles. In all, 121 universities, almost two thirds of them regional universities, took part in this programme. We allocated over 15 billion roubles in support. State financing will allow them to open student technology parks and business incubators and upgrade their laboratories.
We launched one more highly important initiative by the President – to develop a network of world class campuses. We have selected 27 submissions for building such linchpins for our talented youth all over Russia. I personally saw these projects during my working trips to Yekaterinburg, Tomsk, Nizhny Novgorod and Kaliningrad.
We have already envisaged funding for the first eight campuses, including five campuses to be built with private investment. I am referring to the projects in Kaliningrad, Nizhny Novgorod, Ufa, Chelyabinsk and Yekaterinburg, and also Tomsk, Novosibirsk and Moscow that are already underway. This is not just comfortable housing for students and post-graduates but, most importantly, modern infrastructure facilities for gaining an education.
We continue the programme on creating world class research and education centres. In addition to the ten already operating centres, we have picked up another five. We will start providing support for all of them this year. Naturally, we expect them to produce practical results in developing the innovative potential of the regions, primarily, the northeast of Russia and the Arctic, and in establishing high-tech markets.
Discoveries are not limited to science. Russia has a vast cultural heritage to be proud of, and this is particularly important for our youth. At the President’s initiative, an excellent project titled the Pushkin Card was launched on 1 September 2021. These cards have been issued to over 4.5 million young people. Over 5,000 theatres, museums, symphonies and libraries have joined the programme, with the number of events growing threefold, largely due to the interest from a younger audience, including in the regions. Ticket sales are surging; totalling one billion roubles in March alone. These are very substantial figures. Interestingly, the first person to have used the Pushkin Card was Nastya Kostenko, a young school student from Omsk, who bought a ticket for a performance at the Moscow Theater of Satire.
Starting 1 February this year, also at the President’s initiative, part of the sum on the Pushkin Card (2,000 roubles) can be used for purchasing tickets for domestically produced films. These are our efforts to support not only young people, but also our national filmmaking industry. We have decided to increase federal funding for national film production to over 11.5 billion roubles for this year.
Even amidst the COVID-19 pandemic, we continued providing access to all cultural institutions for people to be able to see films and theatre performances, and attend concerts. We are making efforts to update culture faclities in rural areas as well. More than 1,500 cultural centres in small towns in 73 regions have been repaired and have received new equipment. This work, among other things, is underway in accordance with the President’s instructions on allocating additional funding for libraries, children’s theatres and municipal museums, with about 2 billion roubles assigned for this purpose.
Dear colleagues,
As you can see, much was achieved during the past year. These efforts are based on comprehensive and positive feedback from people, businesses and regions, whose importance is always emphasised by the President. This allows us to provide an adequate response to new challenges.
I would like to talk more about last year, but I will go on with today’s decisions and measures. I know that many of you want to hear more about this.
Even amidst the pandemic, the external pressures on our country did not ease up for a single day. However, the new sanctions that followed this year have reached an unprecedented scale, with the number of restrictions exceeding those that have ever been imposed on any other country and totaling over 6,000.
These are individual and sectoral sanctions against the country – but most importantly, they are targeting all citizens. Our former partners seemed to have joined some sort of competition to see who could more quickly impose restrictive measures, which have been announced almost daily. Their goal was to create panic and to target every person.
The country's financial system was the first to take the hit. These unfriendly foreign states could not come up with anything better than resorting to typical pirate practice, plainly speaking. In freezing our assets, they actually robbed our country.
Political pressure is being exerted on global companies that have invested billions of dollars, as well as their time and effort, in Russian projects, with logistics chains broken and high-tech import deliveries restricted. Air traffic has been blocked, and attempts have been made to deprive us of our aircraft fleet. Our exports to many countries are also restricted.
We have reached the point where demands have been placed on cultural figures to abandon their language, spiritual heritage, and beliefs. But they didn't stop there; they have started to rename paintings and ban teaching Russian literature at universities. They insulted our athletes and banned them from competitions, and harassed Paralympic Games participants.
Such sanctions were never used even during the darkest years of the Cold War.
Their aim is to set us back years or even decades. Cut Russia off from the world. Force Russia to discontinue lucrative economic and social projects. Knock down people’s living standards.
They spare no effort to accelerate inflation and create a shortage of consumer goods in Russia, and consequently, social tension – to cause popular discontent.
All this has been carefully planned. The creators of this strategy expected that the sanctions storm would destroy our economy in a few days. Their plan did not work out.
Our financial system, which is the lifeblood of the entire economy, has survived. The Bank of Russia and the Government, working in constant contact with the President, have prevented its collapse and maintained public confidence in it through joint efforts. Payments inside the country continued to be made without interruption. The stock market and the rouble exchange rate are stabilising.
It is unlikely that any other state could have coped with this. We have survived.
We countered the attempts to destroy our country and harm our citizens with the systematic work we have been doing almost around the clock to minimise the damage.
The Government has launched a priority action plan, worked out by joint efforts of the Government, Parliament and the regions. We have also taken into account feedback from businesses, public organisations, business associations, and individual citizens.
I consider it important that the State Duma has supported this format.
Colleagues,
We have set five major overarching priorities for the short term; we have been working on them for the past two or three weeks.
The first priority is to ensure the smooth operation of enterprises.
The second is to expand the freedom of enterprise in Russia.
The third is to support vulnerable categories of people.
The fourth is to ensure the saturation of our market with goods.
The fifth is to provide the necessary support measures to specific industries.
I will now explain what we have been doing under this strategy.
As I said, the most important priority is to ensure the steady operation of enterprises as part of new production chains that will not depend on anything our former foreign partners might do. We also need to provide companies with working capital – to ensure that people continue to get paid their salaries. To do this, we need to save jobs, which means save companies.
The size of the business no longer matters because the impact is affecting everyone, including small, medium and large businesses. Until recently, large companies seemed to have more resilience to survive some restrictions; now they have to shoulder a bigger responsibility. They need to save hundreds of thousands of employees. In this situation, we just had to support everyone, to make sure that their business continues to operate.
We have included in the plan some specific measures to support major enterprises, and updated their list. We are closely monitoring the financial and economic situation. Apart from providing employment to hundreds of thousands, they also provide contracts to numerous suppliers. We have opened special preferential lending programmes for them. We have worked out solutions for industry, agriculture and energy, and are working on similar programmes to support construction and other industries.
The Government initially allocated 40 billion roubles to subsidise loan interest for industries and trade. However – I am the first to announce this today – we agreed with the President yesterday to triple this amount. This means we will allocate an additional 80 billion roubles to this end. We will provide a total of 120 billion roubles, which will be enough to issue preferential loans worth more than 1 trillion roubles.
We have already allocated 26 billion roubles for major agricultural producers.
Tomorrow, at a Government meeting, we will consider measures to support the fuel and energy sector.
The problem with variable rates has been solved – they account for about 40 percent of our total loan portfolio. There is a solution to help companies mitigate the difficult adjustment period and their financial obligations – the capitalisation of interest in the body of the debt.
This measure also applies to credit lines banks have opened to leasing companies. We expect that lessors will also reduce leasing rates.
Standing at this rostrum, I would like to address those foreign companies that are still considering whether to leave or stay and continue operating in this country. Russia is still open to a constructive dialogue. We respect your work and the effort you have invested in your projects in Russia. We value your cooperation. But if you have to leave, your business should go on operating, since it provides jobs. It employs Russian citizens, and it is our priority to defend their interests. People’s living standards must not depend on the follies of foreign politicians.
Our main goal is to support production and achieve full scientific and technological independence. This is extremely important not only for national security but also for our country’s future, for its economic strength and the living standards of millions of Russia’s citizens.
Reasonable alternatives to foreign imports need to be available, and very soon. We are aware that lifting the restrictions on parallel imports is only a partial solution to this problem. A systematic approach is needed, one relying on our own powerful industry.
We will remove various barriers while focusing on the needs of each particular sector.
Loan repayment holidays have been introduced for small companies. Along with the Bank of Russia, we have expanded reduced-rate lending programmes, including for replenishing investment and current assets. We have also scaled the mechanism of “umbrella” guarantees for a large number of businesses.
We continue to focus on the employment problem. I want to say that an executive order has been signed on a six-month grace period for loans drawn under the FOT 3.0 programme. This means that businesses will be able to postpone interest and principal payments, something that will reduce the pressure on them and will allow them to maintain jobs.
Jointly with business associations and business communities, we are planning other support measures.
A number of important changes have been adopted in the tax area. The Government has extended the deadline for the monthly advance payment on income tax due in the first quarter of the year. We are saving a number of businesses from serious financial problems with this. Generally, they would be required to transfer the funds on March 28; now they will be able to do it a month later. Also, they will have the opportunity to make monthly advance payments based on their actual profits. This means they will be able to pay based on their real profits rather than the “paper” profits that might arise, among other things, from currency revaluation.
We have also changed the procedure for recognising foreign exchange differences in the process of calculating total profit tax. Over the next few years, the ups and downs of the dollar and euro exchange rates will not keep affecting corporate obligations.
Yet another important decision is a two-fold reduction in the surcharge starting from the second month. These amounts would have increased substantially as they followed key rate hikes, and the companies that find themselves in a difficult financial situation would have suffered even more.
For the regions, we have extended the opportunity to establish tax holidays for new individual entrepreneurs within certain tax regimes until the beginning of 2025.
We have extended, by six months, the deadline for paying the simplified tax for last year and the first quarter of 2022. This is primarily an act to support small and medium-sized businesses. This measure alone will make it possible for companies to release about 37 billion roubles.
We have also simplified the state procurement system to boost its efficiency as a tool for supporting the demand for Russian products. Our goal is to create conditions for the implementation of contracts. Simultaneously, the Government’s contractors should have the relevant funds for this and be able to promptly react to changes in the situation.
For this reason, a possibility has presented itself to considerably adjust the provisions in contracts if it is necessary for performing the obligations under the contracts in question. Accordingly, the advance payment amounts have increased up to 50 percent of the sum of the general payment with Treasury support and up to 90 percent without it. In this case, businesses will be able to receive more funds at once.
The payment term for work done has been reduced to seven working days for small and medium-sized companies. A separate package of measures has been adopted to simplify purchases of medicines and medical products.
Another priority is to expand freedom of entrepreneurship at home. Regulatory pressure is being reduced for companies to avoid being distracted by contacts with the authorities and the need to obtain or extend licenses and permits. Their forces and resources should be directed at and focused on creating new production capacity and commercial chains and looking for reliable suppliers and opportunities to expand business based on vacated niches after a competitor’s withdrawal. This will make it possible to resolve the main issue of maintaining jobs and income.
Therefore, by agreement with the President we have introduced a moratorium on all inspections, where, of course, people’s security and health are not involved, as part of implementing the planned measures. Business associations have always supported this position, and we understand that this kind of control was a very sensitive issue for entrepreneurs.
I want to stress once again that there will be no inspections, planned or otherwise, with the exception of the cases I mentioned.
The de-bureaucratisation and reduction of administrative and other pressures are not temporary measures but the Government’s consistent position.
As for licences (and there are more than 2.5 million documents), their validity period has been automatically extended. They will remain in effect. There is no need to visit any offices, fill out papers, or apply for new licences.
We have taken system-wide measures with respect to non-tariff regulation, to ensure that goods can be imported into our country without technical barriers. For this purpose, we have extended 25,000 certificates and several hundred thousand declarations for another year. We have introduced a simplified declaration of product safety, thus shortening registration to about 10 minutes. We continue to selectively lift barriers in specific industries based on proposals from the business community.
Creating a “green corridor” for imports is another priority in the current circumstances. We closely cooperate with our colleagues from the Eurasian Economic Union on this matter.
We are building a system to ensure that people still have access to the goods and medications that are essential to them. We have expedited the registration of Russian medical goods to replace imported components. We have abolished customs duties on more than 900 product lines to reduce the cost of import.
We have increased the threshold for the duty-free import of products for personal use via e-commerce tools from 200 to 1,000 euros.
We have expedited phytosanitary, veterinary and sanitary control for agricultural imports.
The Government can now issue decisions with respect to concessions on the import of technological equipment, components, raw materials and other materials used in the implementation of investment projects. We developed a legal mechanism and a regime for parallel imports.
Our third priority is supporting the most vulnerable. We have developed and submitted to the State Duma a package of bills that will determine who requires help from the state. It will be a comprehensive system of targeted aid.
Distinguished deputies, I want to ask you to expedite the reading of this package of bills so that our citizens could benefit from existing and new measures of support as soon as possible.
We will not forget families experiencing financial hardships. As per the President’s decision, families with children aged 8 to 16 will receive a new monthly benefit starting in April. Starting in May and until the end of the year, it will be paid to the parents of over 5 million children. The average amount will be 6,000 to 12,000 roubles per month depending on the region and personal circumstances. We will allocate over 450 billion roubles for this purpose.
We are monitoring the situation on the labour market every week, and we have not yet noticed a drastic decline in employment. But we want to take preemptive measures to make sure that people are not left alone with their problems. We took a range of preemptive measures that were tested at the beginning of the pandemic.
Now workers can seek assistance from employment services not after they have been laid off or their company has shut down but as soon as these situations become a possibility.
We are creating new temporary jobs for those facing dismissal. We are also providing paid communal jobs to those who are out of work.
We are expanding re-training opportunities. Professional courses for more than 200,000 people will be launched.
Of course, we are paying special attention to young people. There is a special youth employment programme. At the initiative of Vyacheslav Volodin and Valentina Matvienko, we have increased its funding this year to 10 billion roubles. These funds will be used to encourage employers who hire people aged below 30 years even without a professional education. These companies are issued subsidies of three minimum wages.
We are carrying out the social contract project. Last year, such contracts were signed by about 280,000 people, and this year, they are available to those who lost their jobs after 1 March, but primarily those who plan to invest these funds in their businesses, in farming or to improve their private households.
Our fourth priority is monitoring prices.
In early March, our retail sector, from producers to sellers, faced the problem of panic demand for several essential products. People were afraid to see empty shelves and soaring prices.
Some people hastened to take advantage of that situation, of the people’s fears. These crooks, because this is what they are, wanted to profit from the panic demand. They created an artificial shortage of products by keeping them in the warehouses and only delivered them to the stores at increased prices and through different channels.
To cut short these illegal activities, the Federal Antimonopoly Service has opened seven cases as of today. It has the necessary instruments for fighting such dishonest businesspeople.
Our legislation stipulates severe punishment for such actions, including fines of up to 15 percent of a company’s annual revenue for abusing its monopoly power. Officials implicated in price-rigging schemes can be sent to prison for up to seven years. This is stipulated in Article 178 of the Criminal Code of the Russian Federation.
We will continue fighting those who decided to line their pockets on people’s fear.
The systemic measures being taken by the Government, the Ministry of Industry and Trade, the Agriculture Ministry, the Federal Antimonopoly Service, the heads of regions and honest sellers have produced the first result. The panic has stopped, and the panic demand is gradually subsiding.
However, prices continue to grow. In this situation, it is important to provide support to the people.
As per the President’s instructions, we will adjust upward social payments, including to families with children and to pensioners. We will also increase the minimum wage and the subsistence wage.
We need the regional authorities to take active measures as well.
The President has signed an executive order to instruct the heads of the regions to promptly react and to take the necessary measures, in particular, to protect the interests of our people.
The head of state pointed out specifically that much depends now on the initiative of local authorities and on their readiness to assume responsibility, to act flexibly and to take decisions rapidly based on the situation on the ground.
First of all, they should provide targeted assistance to people in difficult circumstances, those whose income has decreased. If necessary, they should approve one-time payments and also help such people learn a new profession and get a new job. They must also ensure the uninterrupted functioning of essential facilities.
The regional authorities must regularly monitor retail prices of essential products and medicines, and promptly respond to increased demand for them. The essential products must be available in the supply chain.
Various commodity markets still need to balance supply and demand and, therefore, prices.
It is important for all of us to prevent price hikes and empty shelves. The main thing now is to expand the supply as much as possible. The more products are available in the supply chain, the lower the pressure on prices.
I would like to repeat that we will cut short any attempts to make money out of our common problems in all sectors. As of now, the relevant departments are issuing recommendations on maintaining price transparency throughout the domestic market, from raw materials to producers. There are also other instruments, but we hope we will not have to use them. I want everyone to take this into account.
Now let’s focus on the fifth priority, the sector-specific measures. There’s a set of decisions under the Priority Action Plan for the industrial sector.
A dedicated grant programme was introduced in order to stimulate the launch of domestic production of parts for the key industries. We will use these grants to encourage the development of design documentation. We fine-tuned this mechanism and increased the amount of reimbursement of costs from 80 percent to 100 percent this year. We plan to allocate at least 3.6 billion roubles for these purposes over the course of the next three years.
State support should be available to everyone who may need it, so we are now finalising a mechanism for additional capitalisation of regional industrial development funds at the expense of federal funds.
It is imperative to make sure that even small industrial enterprises have access to inexpensive loans to replenish their working capital. They will receive grants to compensate up to 90 percent of the interest rate under such loans, which will make it possible for innovation-driven companies to retain their workforce and keep up output volumes.
Now, I would like to provide more detail about supporting specific industries. The Government has postponed until December the payment of the recycling fee for the largest car manufacturers and for enterprises producing self-propelled vehicles and trailers. This will make it possible to redirect more than 60 billion roubles to ensure the smooth operation of conveyor lines.
A number of new measures concern the machine-tool industry. With the sanctions, their importance for the stable operation of all industries has grown significantly. We are simplifying regulations in order to speed up payments by companies under contracts with counterparties.
Power grid companies can now have some slack for failure to fulfil investment obligations due to external restrictions.
The aviation industry was one of the Western sanctions’ earliest targets. They tried to cancel, as they say now, the Russian aviation industry. Foreign partners who participated in creating the MC-21 aircraft, the Sukhoi Superjet, simply refused to honour their contractual obligations in February. They did so simultaneously and unilaterally.
I’m convinced that we will overcome this challenge as well. The specialists with whom we met at the enterprises remain confident in their abilities.
In addition to our industry, the external restrictions have affected the transport industry, which can be clearly seen in air transport.
In order to stabilise the situation, the Government will provide subsidies this year to airports and airlines in order to compensate some of their operating expenses. The carriers will receive subsidies for salaries and social contributions. We will allocate 100 billion roubles towards this end. This will make it possible to retain professional workers, primarily flight crews and technical personnel.
We will also compensate airlines for the costs associated with refunding passengers for the cost of tickets on flight routes that were cancelled due to external restrictions.
An increase in authorised capital of the Russian Railways company, which is vital to the economy, is another important measure under the Priority Action Plan. On behalf of the President, we decided to allocate 250 billion roubles for these purposes. This will make it possible to continue the implementation of a Russian Railways’ large-scale investment programme and to provide the economic sectors with job orders, but most importantly, to save hundreds of thousands of jobs.
Now as regards the construction sector. This sector has always been an economic development driver. This is why a wide range of anti-crisis measures have been adopted to support this industry. The measures are not only aimed at providing new and comfortable housing for our people but will also help load related industries.
The preferential loan programmes we launched earlier made housing more affordable for millions of our citizens.
The President has instructed us to maintain the volume of these loans to at least last year’s level. And we will continue to provide loan support for family, Far East, and rural mortgages on the same terms.
In April, preferential mortgage rates for new-build housing were also resumed. At the same time, the maximum loan amount for the purchase of new-build flats in Moscow, St. Petersburg and the Moscow and Leningrad regions was increased from 3 million to 12 million roubles, and up to 6 million roubles in other regions. This will support the people and the industry.
In order to help builders, we have already started to decrease the number of mandatory requirements. This effort will be continued this year. Of course, not at the expense of safety.
We have developed a mechanism to compensate up to 15 percent of loan interest rates to developers. This will help maintain the rate of commissioning new housing, finish the projects that have been started, and prevent long delays and violations of obligations to buyers.
The Government is also adopting a large package of measures to support the IT industry. Many of these measures were outlined in the Presidential executive order and they continue the wide-ranging decisions we have been implementing for several years.
Our goal is to attract young, talented specialists to this economic sector and create comfortable conditions for them to work in Russia, to produce competitive Russian products and to ensure that all industries, from medicine and education to energy and space, will have cutting-edge technology.
We have freed IT companies from inspections and income tax for three years and provided soft loans so that they have more resources to develop new and promising projects. Employees of companies in this sector were given the opportunity to take out a preferential mortgage and receive a deferment from the military.
Another package of measures concerns tourism. This sector has wide multiplying opportunities and is associated with a large number of related industries, from transport and construction to agriculture.
Colleagues, I would like to thank you for promptly reviewing and supporting the important legislative amendment regarding hotels. This is the first time we have made such a decisioin, which we discussed a lot with Mr Siluanov. For five years, the value added tax rate for investors who build or lease out tourist facilities has been reduced to zero. I really hope this measure will provide a powerful boost to new construction. Owners of existing hotels will not have to pay VAT either. I expect this will be good motivation for business and tangible support for hotels.
People travelling across the country, especially now, amid sanctions, will need good, high-quality and up-to-date infrastructure: healthcare centres, resorts, and hotels. Businesses will be able to take out preferential loans at a rate of 5 percent to build or rebuild these facilities.
For the first time last year, grants were offered for the creation of campsites, non-capital lodges and sites for outdoor recreation, the improvement of beaches, and the development of new tourist routes; several hundred entrepreneurs received over one billion roubles for such projects.
Last year, in order to make recreation in Russia more affordable and convenient for our people, a tourist cashback programme was developed to compensate part of the voucher cost, in line with the President’s instructions.
It has quickly become popular. Over 1.5 million people have already used it. There are still many of those who would like to take advantage of this opportunity.
The Government decided to extend this programme until 15 April so that people can take their time to plan their summer holidays. This way, at least 1.5 million more tourists will be able to book tours and spend their vacations anywhere they choose in Russia.
Let me turn to food security and new measures to support agriculture.
The situation on the domestic market for agricultural raw materials and food remains stable despite all the external challenges. The Government has been hard at work to make this happen.
A successful planting season is one of our priorities. Agricultural producers have the resources to make this happen, including access to loans and opportunities to upgrade agricultural equipment and buy fertiliser.
In keeping with the President’s instructions, we will allocate an additional amount of more than 150 billion roubles to finance a subsidised lending programme as we have discussed in detail, including during a meeting with the President last week.
We are proactive in using customs and tariff regulations to protect Russian consumers. For that, we stopped exporting grain and sugar, as well as some oil-bearing plants and their derivatives.
There is a mechanism whereby proceeds from export duties on a range of products go to the agricultural sector.
Of course, we keep a close eye on food prices at all times. This includes the price of bread. We will never allow these prices to go up and have increased subsidies for the bread-baking sector.
Russian agriculture and related industries are expected to grow at more than three percent in the years to come, while making more products we used to import. This is the goal the President set for us.
Colleagues,
It would not be an exaggeration to say that today Russia is facing the most challenging situation in the past three decades. However, those who are intent on isolating us and uprooting us from the global economy will never succeed. Russia is firmly integrated into global processes. We have allies and partners, and continue working with those who want to build their businesses in our country. We remain committed to supporting investors, including foreign ones, as well as promoting closer ties with our partners within the Eurasian Economic Union.
Developing the Union State with Belarus is another priority in terms of international cooperation. We signed the treaty establishing the Union State over 20 years ago. Last year, a historical decision was taken. The presidents of our countries approved the main tracks for implementing it. We are now building on this foundation to create a single economic space for Russia and Belarus, which has special importance today.
Colleagues,
Those who have hit us with sanctions had hoped to break us, but let me repeat that our economy has withstood the blow. We have held out.
I would like to emphasise that the situation is difficult, but it is still a working situation. A space of opportunities, unique on a historical scale, has emerged, and we must take advantage of it.
Today’s challenges demand that we lay aside all political differences and unite to pursue the interests of our people and achieve the goals set by our President. No matter what debates we may have on the development of our country and the different aspects of life in it, I am confident that we are at one as regards the need to protect our people and national security.
Our citizens and businesses expect us to take prompt, measured moves to overcome our economic difficulties. Now we must use every opportunity that opens to us.
The Western companies that have decided to leave the Russian market are in reality leaving niches open for our businesses, giving them a chance to broaden their range of products. As you know, a market abhors a vacuum. Import substitution across the board is not just a trend but a vital necessity. Strong national industry, a powerful scientific and technological foundation and top-ranked personnel are key factors in genuine independence, true sovereignty.
It won’t be easy. Of course, it would be wrong to say that the sanctions are not creating difficulties. We realise how serious the situation is and are aware of our responsibility. I assure you there are no presumptuous attitudes in the Government, but we know what to do and how to carry out the President’s instructions. We will have to rebuild logistics chains, develop ties with potential suppliers and look for new markets. But, having united around the President, we will deal with any challenges and Russia will continue developing.
The main response to the anti-Russia sanctions will be the results of our common efforts – jobs, the free development of our businesses and industry, and independence for our economy. The general success of the country depends on the individual success of every person.
Thank you for your attention.
