OREANDA-NEWS. December 9, 2011. Vladimir Putin: Good afternoon, colleagues. We are continuing our meetings and our joint work at the Russian Popular Front. I would like to say a couple of words about the elections to the State Duma. There is much talk about this now and it has been discussed relentlessly from each and every angle. I will not provide any estimates right now. The only thing that I would like to say is this – 50% of the United Russia parliamentary party has been replaced, while 25% of those who made it to the Duma on United Russia's lists are not party members. They represent organisations affiliated with the Popular Front. This is precisely what we were talking about and what we sought to achieve. We said that approximately 25% of the deputies in our parliamentary party should be independent, and this is what happened in reality. Far from all of the Popular Front candidates were elected. However, 25% of your representatives will be part of the parliamentary party. As I see it, this is a sound result.

In this regard, I would like to openly say the following. We see what is happening in certain regions, where Popular Front representatives were favoured over United Russia functionaries. They are being pressured into surrendering their mandates to United Russia. I love United Russia dearly. It is an organisation that I founded, but I ask both you and the candidates elected on the party lists not to succumb to any pressure, nor to hand in your mandates. The Duma is for the people who won in an open and honest struggle. Let us consider our discussion over in this regard. And please, Mr Gryzlov, see to it that nothing of this kind should happen in the regions. This is my first point.

Second, we will continue, as we agreed, to work within the Popular Front's framework. This is a supra-partisan organisation based on basic national development values, which we share and by which we are guided in our practical work. In this connection, it is of particular importance for the Popular Front to keep an eye on your members who have been elected to parliament and to monitor the programmes that the government has recently outlined. I am referring to economic and social development, healthcare reform, and the development of the road network, for which we have set aside huge allocations. The National Front includes some professionals in this area, who should supervise how these funds are spent. It has been a long time since we allocated comparable amounts for road construction. There are also other vectors that will require parliamentary and local supervision when practical implementation efforts are underway. This is very important.

And now I would like to discuss another domestic political issue that is of growing importance. I am referring to the upcoming presidential elections. This is what I would like to discuss and suggest. As you know, candidates' electoral staffs are usually formed during presidential campaigns. Up until now, these were, as a rule, technological and administrative entities. So, I would like to make a suggestion and have it discussed. The suggestion is this. Your humble servant's electoral staff should not be a technological and administrative entity of this kind. I want it to be open. If you don't object, I would like to establish it on the basis of the Popular Front, a supra-partisan organisation, as I said, which includes different people with different political views. And yet, they are united by basic national development values.

I would like to ask you to delegate to the staff individuals who enjoy national renown and trust. And I would like to ask Stanislav Govorukhin to head the staff if he thinks this is possible. I will not dwell on what has made Mr Govorukhin widely popular in our country. I will also not speak about his professional career. What I want to say is that Mr Govorukhin is known as an open, principled and proactive person. I know that he has repeatedly criticised me – and he will continue to do so – for what we failed to do and for what, in his view, we haven't even started doing. This is first.

There is another man in this room, whom I have known for quite a long time and with whom I have been through many different and difficult situations. He is also very popular in our country. He is Leonid Roshal. I won't speak about his services in the sphere of medicine, although he is a brilliant doctor, organiser and specialist. People in this country also know him as a prominent public figure. I would be very pleased, Mr Roshal, if you would accept my proposal.

The next person is Mr Alexei Romanov (Alexei Romanov, First Deputy Head, Directorate V, Special Purpose Centre, Federal Security Service). He is Hero of Russia and the first deputy commander of the Vympel Group. He fought in the Afghan war and saw action in various hot spots. He began his military career with the airborne troops. For me, Vympel is not an unfamiliar organisation. I remember very well how I formulated a proposal to restructure the Federal Security Service's military component, our leading specialised agency.

I remember the difficult position that these units were in that time, and I am aware of how they are doing today. But this is not about the unit as a whole, which is worthy of every respect. I know that people there… I've said this once and I'll repeat it again – at one time these units were in a very difficult position, in terms of their morale. And I know how this situation has changed, when after one operation I gathered these people together and asked them about their mood and their feelings (thank God they carried out this operation without any losses), and I remember what they said: “We are ready to die for Russia.” This is a dramatic shift in people's motivation, and it is evidence of their readiness to serve their homeland. I appreciate this and I would be very pleased if you would also join the election headquarters.

Now I’d like to speak about Lyudmila Bokova – a history teacher in School ¹1 in the town of Balashov. She is also famous and our educational community is proud of her. This environment is very interesting and important. We are carrying out these difficult and drastic changes in education, and it is be very important that we are in direct contact with the people who work in this area. We must understand these people, and we must be able to formulate some unresolved tasks in a timely manner that, regrettably, are certain to arise in this area. The main thing is to give them our attention without delay.

Alexei Lavrenenko heads a successful farm in the Stavropol Territory. Roman Rusanov is the leader of the interregional public organisation, Our Builders. He is actively involved in supporting small and medium-sized business. I’d like to ask Valery Yakushev to join the headquarters as well. He is a respected worker – a metallurgist. He has been with the industrial giant Uralvagonzavod for more than half a century. This is a big plant, a major enterprise in both the defence and civilian industries. But this is beside the point. It is Mr Yakushev himself who matters. I’d like to ask you to work with us in the headquarters and to give us your support.

Olga Platoshina (chairwoman of the Central Council of the National Youth Public Organisation, Russian Rural Youth Union) is à member of the Popular Front’s Youth Club. Of course, it is very important for us to maintain this contact with the younger generation in all areas that are of interest to the youth, and to get feedback from them.

And this is not simply a matter of support. It is important for us to determine goals in this area, and to figure out ways of attaining them. The youth is an environment that requires constant attention and support. They are just starting their life. They have no savings nor any industrial experience, and they require special programmes and special attention.

Nikolai Fyodorov (chairman of the Board of Directors of the Institute of Socio-Economic and Political Studies) is the author of a national programme that he has compiled along with his colleagues. He headed Chuvashia, one of the national republics in the Volga Region for a long time. I think this is also highly important. Russia is a multi-ethnic country, a federal state, and Mr Fyodorov has a wealth of experience in this area. It would be great to put it to use.

Vyacheslav Lysakov (chairman of the Coordinating Council of the Interregional Organisation of Motorists,Freedom of Choice) has always consistently defended the rights of motorists and a sense of justice on the road. He is a very well-known, active, and meticulous person. I know from experience that Mr Lysakov is a man of principle. He is persistent and is able to clearly formulate the problems that we need to address.

I’d also suggest including Mr Mokhnachuk (chairman of the Russian Independent Trade Union of the Coal Industry). We have known each other for many years. Mr Mokhnachuk knows how to defend the interests of the working class. He has been in charge of one of the nation’s leading trade unions and chairs the National Miners’ Council.

We know him from his work at official agencies. We know how he has discussed safety issues with officials, how he defended the interests of miners during the settlement of labour disputes. He is a tough and consistent man, I would say, but this is the kind of person that his current position demands. There is no doubt that Mr Mokhnachuk enjoys people's trust, and this is extremely important. He works in a very difficult industry, one that requires the constant attention of the state. We have recently done a great deal to enhance safety at enterprises by altering the funding for safety measures and for wages. I hope our efforts will yield results. I’m sure this is not enough but we will work consistently to resolve these problems. In particular, we’ll work in cooperation with the trade union, and I rely on Mr Mokhnachuk’s support.

And, finally, I’d like to ask Mr Monoyenkov, a student of the Plekhanov Academy, to join in this work. Mr Monoyenkov, are you there? He is also one of our young activists.

I’m convinced that this task, one which we must all work together to resolve, does not depend on age or professional orientation, but working with students is of the utmost importance. I look forward to your support and your active role during this joint work.

This list is not complete. We cannot extend it indefinitely because at the end of the day, we must have a working, functional structure. Nonetheless, if you have any additional proposals, let’s discuss them and make further adjustments, if necessary. In fact, that's all I wanted to put forward for discussion.

I know that Mr Titov wanted to say a few words. Excuse me, Mr Titov, but I would first like to hear what Mr Govorukhin has to say, his position and his response to my proposal. Mr Govorukhin, please go ahead.

Stanislav Govorukhin (art director of the Vertikal Film Studios, a subsidiary of the Mosfilm Cinema Concern): This proposal is a surprise for me. Of course, this is a great honour and a huge responsibility. Even if we regard politics as an art, one that has a lot in common with film directing, politics to this day remains to me a terra incognita, one which I am eager to explore. It’s with great pleasure that I accept my new responsibilities [as Vladimir Putin’s campaign manager], because for me this will be a labour of love, with Mr Putin as my candidate. I’m prepared to commit myself to the job for which you have selected me, but at the moment I cannot say with absolute certainty that I’m the ideal candidate because I simply don’t have the necessary experience.

I have a lot of questions for Mr Putin. You’ve outlined your agenda to the nation already, but I’m curious to get to know it in greater detail, because I will be acting as a communications officer. Of course, you may elect to answer as Alexander Suvorov did when asked about the plan of one of his military campaigns. He took off his hat and said, “Not even my hat is in a position to know what is on my mind.” But with your campaign team, perhaps you should be more candid.

I have several urgent requests to communicate, ones that come from across the country and need to be addressed as soon as possible. The government must honour those requests, especially considering the fact that acting on them will not require a great deal of effort.

Everywhere I go across Russia, whenever I speak with the public, people always ask me when television and movies will stop corrupting the hearts and minds of our children.

The newly introduced Unified State Examination is another highly controversial issue, one that created a great deal of noise during the latest elections. I currently find myself in a difficult position; it’s too tricky to figure out right away. But I enjoy chess. So I look more closely at the position and, after a while, I come to see the intentions of the white pieces and the black pieces, as well as the tactical threats that are there.

I would be happy to support Mr Roshal, but I think the campaign team simply needs a few more people who are renowned nationwide, not just for their professionalism, but for their integrity as well. Some outstanding statesman once said that integrity is the only truly indispensable quality for someone running a nation. I believe this was U.S. President Thomas Jefferson.

Vladimir Putin: Thank you. Thank you, Mr Govorukhin, for accepting the offer. For me, this is a matter of principle. We’ll discuss this in greater detail within my campaign team as we continue working on the platform of the National People’s Front. This is a structure that we’ve created for the long term, but it’s the campaign team that defines campaigning activity. So, when speaking with my campaign team, I should be more specific in setting forth my views and ideas, as compared with the concise form in which they are presented in the national programme, compiled by Nikolai Fyodorov. By and large, we’ve laid out our programme on paper, identifying our aims and goals, so that we can now refer back to it when working with people. But you are absolutely right in saying that certain things need to be made more concrete, and soon we will do just that. We’ll get together and discuss those issues. And we will be sure to take into account public concerns about the mass media and education, among others. Mr Titov (Boris Titov, chairman of the national public organisation Delovaya Rossiya.), please go ahead.

Boris Titov: Thank you, Mr Putin. I’d like to focus on issues that really matter, such as the business community’s support for your candidacy in the upcoming elections and how to consolidate its position. The business community does not represent the widest voter base, but it is a significant force, because businesses provide jobs and bring prosperity to the nation. And the socio-economic wellbeing of the nation depends on that of business.

At our most recent session, we made the decision to set up an industrial group within the framework of the National People’s Front, and on this basis, which we are currently forming, we are creating a business headquarters to support your candidacy in the next presidential elections.

In this regard, it is of utmost importance that we send the right signals to the business community so as to make it feel more secure and to reassure businesses that they can invest in Russia’s economy and develop private entrepreneurship here. Many steps have recently been taken toward that goal. The programmes of the National People’s Front and United Russia reflect our main goal – the creation of 25 million jobs in 20 years, which is crucial both for entrepreneurs and for people who will receive well-paying jobs.

A number of concrete decisions have been made in the electricity sector, for instance, with regard to scrapping penalties for overuse and underuse by small and medium-sized businesses. A lot of progress has been made here. Yesterday, the president finally signed a resolution to cut social insurance rates. We hailed this decision because the previous rate, 34%, seemed a bit excessive. Now it will be brought down to 30%. Still, it would be great to see this measure followed through, as it is still a somewhat half-hearted effort.

Vladimir Putin: And what do you think the next step should be in that direction? Tax cuts?

Boris Titov: Tax cuts, yes, but not of the conventional kind. A “non-linear” scheme should be developed. We have some related proposals to put forward. For instance, effecting a minor pension reform, creating a pension fund for older generations, singling out of people born after 1967, in order to pay from the fund’s direct receipts, in particular from excise duties (on tobacco and spirits), maybe part of oil revenues could be used, it is necessary to discuss this decision. These are indirect solutions to be adopted today, but they could form the foundation for further progress.

But naturally business expects some more decisions. We are very much concerned about taxes, I could say something about a so-called tax manoeuvre, reducing production taxes and increasing consumption taxes. At least to the level… In the common Customs Union, and now in the common economic space with our neighbours, for example with Kazakhstan – they have lower taxes… Maybe we should think about levelling Russian competitiveness in this sense, about bringing our taxes to the level of Kazakhstan, at least. It is very important to simplify taxation accounting and adopt international standards. There are many different issues.

The fight against corruption is very important. It is probably a priority, and in this respect we would like to make a point… First of all, under Article 159 of the Criminal Code, 30,000 people have been sentenced for fraud crimes. This article deals with the illegal seizure of companies and property, with abuse of office. Perhaps it’s time to think about more serious legislation to do away with corruption. We had a difficult period when bureaucratic pressure on business was intense; perhaps we should think about amnesty for small and mid-size businesses that have committed minor and moderately serious economic offences. Perhaps we should take some measures to seriously improve the business situation but not at the cost of other social strata, so these proposals must be well elaborated. Although we believe that lowering taxes will not reduce budget receipts and consequently affect social programmes but will only increase them due to business growth and the growth of the tax base as well as higher wages caused by improvements in technologies and industries. Higher wages will improve the social sphere. So, if possible, we would form a business headquarters where we could discuss these problems and make our proposals to you to be included in the election manifesto for your presidential campaign.

Vladimir Putin: Thank you, Mr Titov. Mr Govorukhin said it is necessary to look at a chessboard to see the moves of the whites and the blacks. It is necessary to see all moves, those of the whites, and the blacks, and the rest, too. The issues in this sphere of activity are very sensitive for all components of our life and they are very professional. And, of course, some business community proposals are extremely important. Mr Titov knows that the government and the Presidential Administration regularly work with business on a permanent basis. And Mr Shokhin knows that. I regularly meet with you and we have had parallel meetings with Mr Shokhin, with each of you. What is important is not my personal meetings, what is important is that the Ministry of Economic Development and the Ministry of Industry and Trade are in permanent contact. In the trilateral commission, we discuss all issues with trade unions on a permanent basis. Mr Shmakov (Mikhail Shmakov, Chairman of the Federation of Independent Trade Unions of Russia) has sucked so much of our blood. You see, he is in good health, and all of us in the government are thin.

We should prevent only one thing (I don’t think anyone is interested in it) – the situation that our friends and colleagues are dealing with in Europe. You know that when the national debt is 124% as in Italy, or 162% of GDP as in Greece, or 202% or 206% as in Japan, it is very difficult, if not impossible, to implement any development programmes. Yesterday I watched Euronews information blocs – from the first to the last. They were all about those problems. And what does it lead to if these problems are not solved? You know better than anybody else – you and Mr Shokhin who is heading the RUIE [Russian Union of Industrialists and Entrepreneurs]. If these problems are not solved, there will be a recession. What is a recession? Decline in production, a lack of money for wages and pensions, immediately. Immediately! This is a real threat that our colleagues are facing. Look what people are talking about. There is what we saw in 2009: decline in production, rise in loans, rise in the cost of loans, decline of all property prices, real decline in wages everywhere. Now listen to prime ministers, my colleagues in that information bloc… The prime minister of Ireland (Enda Kenny) sitting under two flags, that of the European Union and his national one, is saying to his country, “We face an exceptional challenge. … I wish I could tell you that the budget won’t impact every citizen in need, but I can’t,” he tells his citizens. It will impact all of them. Therefore we, of course, should and will think about reducing the tax base. My personal opinion is that we can meet social obligations only on the basis of economic growth, and that economic growth requires light taxation, efficient taxation as well as the implementation of budget obligations for people in need of support. It is necessary to ensure national security, defence, healthcare, education, pensions etc., because all this requires budget funding. But this also means that we should think about making this taxation less burdensome and more efficient, that’s certain. Of course, we have taken into consideration such things as reducing social contributions by raising excise duties on tobacco and alcohol, and various colleagues had various proposals. Mr Titov, there are some limitations related to everyday life. Preliminary calculations show that the receipts from the growth of excise duties on tobacco and alcohol will be insufficient for a significant reduction, for businesses, of social contributions to social funds. It is possible to get significant receipts from this type of taxation, but you would have to increase tobacco and alcohol prices many times over. Of course, we can say that smoking is bad for your health and drinking should be avoided, but I don’t think that we have a right to take such decisions in this sphere based on the need to ensure the normal work of businesses. This will lead to price hikes not by one or two roubles, not by thirty roubles, but several times over, immediately. Several times! And if prices do not increase several times over, the insignificant price increase will have an insufficient effect on reducing social contributions to social funds.