OREANDA-NEWS. March 10, 2010. Vladimir Putin's opening address:  Ladies and gentlemen,

We have gathered here to discuss federal targeted programmes. In fact, this meeting begins the budget process, during which we will draft the national budget for 2011.

What are the key objectives for this budget cycle and how will it be different? First, it should return to traditional financial planning. We had to temporarily abandon it last year in order to take extraordinary measures due to the global financial and economic crisis. We had to implement government anti-crisis programmes, which on the whole have met their targets.

The situation has now been stabilised, and we can again afford to prepare a more routine budget. Therefore, we must produce a high-grade budget for 2011 that will meet long-term objectives and fully guarantee the fulfilment of social obligations.

Secondly, another extremely important objective is to ensure a stable and balanced national budget while gradually shrinking the deficit.

Forecasts for social and economic development and basic budget indices should be based on conservative and realistic estimates that take into account all possible risks, particularly unpredictable fluctuations in global markets for oil, metals and other basic Russian exports.

Third, we should concentrate our resources on the political priorities set forth in the guidelines for Russian government activities. We will implement a series of measures to increase the efficiency of budget expenditures.

New programmes that could receive funding will undergo a difficult screening process to ensure they meet national priorities as well as requirements for feasibility, effectiveness and expediency.

Fourth, we need to prepare in advance for the entry into force of the law altering the status of public institutions, which envisages fundamentally new approaches for preparing and executing of budget expenditures. In particular, the usual estimates will be replaced by measures such as targets in education, healthcare and other public services. These targets will be used not only to determine how much funds are allocated but also to set requirements for the scope and quality of work.

The purpose of these changes is to provide healthcare, education and the services of our entire public sector to citizens by providing an incentive for careful attention to people's needs and demands.

Let us turn to federal targeted programmes proper. They account for a sizeable portion of the national budget. In particular, 740 billion roubles have been earmarked this year to develop advanced technology, build up social and transport infrastructure, solve housing problems and enhance security. The federal targeted programmes for 2011 will certainly address these obvious priorities.

In particular, we will prepare a federal educational programme through 2015, which will include the Our New School project and several other critical educational initiatives.

We are preparing an updated housing programme to formalise government commitments to provide new accommodations for particular population groups.

We will also launch a fundamentally new federal targeted programme for the comprehensive modernisation of housing and public utilities, which will complement the efforts that the Housing Reform Promotion Fund started several years ago. Naturally, this programme will not just be about major housing repairs. Significant renovation of utilities networks is also necessary. Moreover, this renovation should not only be undertaken in emergencies and should involve modern technology, materials, energy-efficient equipment, private investment and concessions.

In addition, the State Duma is discussing the Drug Bill. It would establish a civilised drug market in which good, affordable Russian-made medicines would enjoy their deserved priority. It would also be worthwhile to consider support for Russian manufacturers.

There is another new issue I want to mention-the development of information and telecommunication technology. We have already drawn up practical, step-by-step plans for the transition to providing essential public services electronically.

Last but not least, we should seriously address the issue of energy efficiency, shifting from preparing a regulatory framework to carrying out practical projects. Here, too, we must find ways to support development in this area and attract private and regional investment.

There are other proposals for preparing and revising federal targeted programmes that we will discuss today. Before giving the floor to speakers, I want to draw your attention to another pivotal factor, which I mentioned at the beginning. Many in this audience are eager to obtain budget funds for their departmental programmes. This is understandable and quite normal.

We should not forget, however, that federal targeted programmes are not our only tools for development. There are many others-the Investment Fund, Vnesheconombank, Rosselkhozbank, Rosagroleasing, special economic zones, concession agreements, export promotion and subsidising interest rates on loans.

Also, macroeconomic stability, low inflation, affordable credit, a reasonable budget deficit at certain stages and a good balance between debts and reserves all play a tremendous role in creating a friendly investment climate. I believe it may even possible to increase these reserves to some extent, considering the current rise in petroleum prices.

To sum up, we should take a comprehensive view of the situation. Such an approach helps us to avoid diffusing funds too much or making promises we cannot fulfil. We have another objective: we should structure our efforts so as to fund priority projects and at the same time preserve a sustainable macroeconomic environment, thus guaranteeing the macroeconomic stability of the budget and the entire national economy.

Let's move on to the discussion.