TRANSCRIPT: [Putin at] Visit to Avtodizel plant (excerpt)

(Kremlin.ru – November 12, 2016)

[DJ: For a better sense of real issues in Russia that concern Putin read the complete long transcript here: en.kremlin.ru/events/president/transcripts/53244]

During his trip to Yaroslavl, Vladimir Putin visited the Avtodizel Yaroslavl Motor Plant, part of the GAZ Group, which produces goods under the YaMZ brand. The President saw the production process and met with the workers….

Anna Buslayeva: I am Anna Buslayeva, design engineer at Avtodizel Yaroslavl Motor Plant.

There is a mortgage programme for young families in Russia. But it’s no secret for you that young specialists are not very keen to work in production upon graduating from an institute.

Vladimir Putin: I think they will gladly join your plant.

Anna Buslayeva: Still, in order to attract young qualified personnel to a production plant, is it possible to provide them with subsidised mortgage loans? Thank you.

Remark: Mr President, excuse me for interrupting you, I would like to add something. When we were launching production, we spoke with foreign specialists, and they said they have mortgages at 3-4 percent interest. Is it possible to try out a programme like this?

Vladimir Putin: This can and must be accomplished, but we can only accomplish this on the basis of economic development. See for yourself, this amounts to 3-4 percent, because refinancing interest rates, the Central Bank rates are almost zero. They have an entirely different economy, along with other problems. We are facing inflation, and many countries are plagued by deflation. Right now, I will not bother you with this, but, in any event, mortgage rates cannot be lower under normal conditions.

I will now answer your question in greater detail, because this is a highly important issue. It is of vital importance to any family, young families, in particular. But, strictly speaking, proceeding from the requirements of economic laws, overall loan interest rates, including mortgage rates, cannot be lower than the Central Bank’s key rate. This interest rate can be reduced and should be reduced for certain categories of people, but this is being done using certain additional tools. For example, these categories include young families, those with young children, persons with disabilities, etc. To the best of my knowledge, our current mortgage rates are around 12.5 percent. But this rate could even drop to 10.5 percent using various tools for supporting certain categories of people, including young families. This is also linked with initial instalment amount. Smaller instalments carry higher mortgage rates, and it is possible to charge 10.5 percent mortgage rate when initial instalment is close to 50 percent.

In addition, many regions are drafting special programmes, with regional budgets stipulating extra privileges for certain categories of citizens, including young families with children. But when lower rates are stipulated, this is being done at the state’s expense, and these rates have nothing to do with free market economy. Some regions (I don’t remember what particular region) are going even farther; regional authorities exempt families with two or three children from any payments and pay everything for them.

We will now strive to spread this practice with regard to certain categories of citizens, and we will also strive to incentivise regions. This can be accomplished by involving the business community and major companies, for example a company like yours can also pay a certain amount for its employees. We will expand the housing-rental system and the corporate housing system. In effect, this can become an entire programme, part of the Housing programme. We will continue to implement this programme, and we will continue to incentivise the business community and regions in every possible way, so that they will take part in this joint work and in co-financing projects.

But on the whole, and I would like to close this theme with this, all of that is possible: the further lowering of the key interest rate for all citizens – given a drop in inflation – by the Central Bank and commercial banks. And inflation, as I said, was around 12 percent last year, while it is only 4.7 percent this year, now. But in annual terms it is likely to be 5-5.5 or 5.7 percent. Close to six percent. The growth of consumer prices has been reduced by half.

Remark: But if certain businesses want to provide preferential mortgage services to their employees, would it be possible to support these businesses through some preferential tax treatment or easy-term loans, for example?

Vladimir Putin: Yes it would, but this would not be fair. Because this would not be their support, but again support on the part of the state: the state will only take from the main pocket and put it in their other pocket.

Remark: Mr President, seeing that we are talking about an important matter, housing… I have a family, two little children… We have joined the Young Family federal programme that subsidises home purchases. It has been about three years. The queue under this programme is very long: we have calculated that we will no longer be a young family when it is our turn [to buy housing], and we will have to withdraw from the programme. Will the state help to reduce the queue in the short term?

Vladimir Putin: This is linked to budget restrictions alone. Thank God, we have more and more young families with children and we need more and more money – purely budget funding – to support these programmes. There are two ways: either we provide extra funds from the budget or we help to raise pay levels. We will seek to follow both these paths to reach the needed result. The target for the Housing programme – and Young Family is part of the overall Housing programme – was, if I am not mistaken, to improve housing conditions for more than 400,000 families by 2018. This target is based on budget capabilities.

Of course, we would like to accommodate young families first and foremost. But we have categories such as veterans, people with disabilities and so on. The state wants to support everyone, but it is difficult to do so for all at once. But anyway the state, proceeding from the principle of social justice, has been working to support all these privileged categories. Of course, we want to help the young. We will work hard and see what comes out of it. Plainly speaking, it simply requires pouring in more budget funds.

Yulia Shcherbakova: Yulia Shcherbakova, service technician at the industrial electronics department, Yaroslavl Motor Plant.

I am the mother of two kids. We have received maternity capital and plan to use it very soon. But there are large families that not only need housing but cars, too.

Vladimir Putin: Well done. This is what I call lobbying the industry through government social programmes.

Yulia Shcherbakova: Do you think the state could help these families purchase minivans?

Vladimir Putin: You know, when I meet with large families and ask how we can help them, in a semi-private manner, what they usually ask for is minivans. Especially really large families, with five or six kids or more. We do not have a programme for this yet, although the maternity capital programme still exists and is developing. It was supposed to end in 2016 but we decided to extend it through 2018.

Speaking of which, I would like to remind those who do not have children yet – and I see there are many young people here – that the maternity capital programme is running through 2018. The support amounts to 450,000 rubles. Next year, we will maintain maternity capital at the current level. There are already 7.5 million people like Yulia who have received maternity capital. Just this year, the number of recipients has increased to 600,000 families.

Why am I talking about this? These are significant expenses for the government. It is a unique programme in the history of Russia and the Soviet Union. Moreover, this has never been done anywhere before. We invented this programme and are implementing it, which requires huge funding. Yulia perhaps knows and has used, speaking the language of bureaucracy, other instruments of maternity and child support like provision of medicines, vitamins and other things, a whole range of what is available. We started this support and it is helping.

Fortunately, the demographics are improving. Let me remind you that in the 1990s, Russia, sadly, was dying out, because every year, our population would drop by almost a million. The natural decline was over 900,000 people, almost a million. It was a disaster. Demographers from everywhere in the world and UN experts even predicted how the Russian population would fall in the coming decade. This creates system-wide problems for everything, down to retaining our huge territory, the largest country in the world, and to our defence capacity, the quality of production, everything. Fortunately (touch wood), we managed to overcome this situation, which is partly due to maternity capital, I think, and the entire maternity and child support system.

If I am not mistaken, back in 2012 we had a birth rate, which is the average number of children per woman, of 1.69. Now it is 1.777. It may seem like an insignificant difference between 1.69 and 1.777, but it is significant because it is right on the dividing line and indicates the start of population growth.

Unfortunately, the number of births between January and September was slightly lower, but the natural increase continues, because life expectancy is growing as well. We all can see these trends and we are really glad to see them and will try to maintain the most successful strategies. I wish we could also distribute minivans.

Remark: Perhaps, there will be a stimulus programme.

Vladimir Putin: I really hope so, it would support both large families and the car industry. But for now, there is no such programme. We will think about it, all right?

Remark: Mr President, I have a question which mostly troubles the male audience here.

Vladimir Putin: Should the women here cover their ears?

Remark: No, they can listen. The World Cup is coming up.

Vladimir Putin: Why would you offend women? Women play football these days and support teams, too.

Remark: Will the stadiums be ready?

Vladimir Putin: Of course they will.

Remark: I have one more question. I’m interested to know, which ice hockey and football teams are you a fan of?

Vladimir Putin: As I’m sure you understand, I have no right to root for any particular team. I root for the national teams, although I like to watch a beautiful game. To be honest, we have not seen a beautiful game involving our national [football] team for a long time. Our ice hockey players are making us happy, and they are certainly improving their performance. Although we still have a lot to accomplish in the area of football and ice hockey. And above all, it is necessary to work with young athletes who are starting out, and who show promise. We need to create a favourable environment, so that they will be able to realise their potential here, just like in any other area. We have a very good athlete-training school that turns out a lot of talented and promising young players. And, of course, they are highly popular on the labour market, and they are being invited everywhere. We need to create conditions that would dissuade them from leaving. In principle, we are working on this.

Remark: We need to create the right conditions.

Vladimir Putin: We need to create conditions for financing and training. Certain requirements should be stipulated. An athlete who has played here for a certain time period would be free to go elsewhere. We need certain legislative provisions, so as to interest young people, so that our clubs would not lose their athletes and so that Russia would be part of the global sport movement, including in the area of football and ice hockey.

Regarding stadiums, I would like to assure you and all other football fans that everything will be done on time, and that this will be high-quality work. I would like to recall that we are to host competitions at 12 stadiums in 11 cities. Everything is proceeding as planned. In some cases, we are behind schedule, but these are temporary technological delays. Everything will be ready.

Alexander Bagrov: My name is Alexander Bagrov, I’m a production supervisor. I play in the Night Hockey League, just like you. It’s nice that many young people have resumed playing hockey. It’s clear that they really like it.

I would like to say a few words about children’s sport, which has become too commercialised. Taking up tennis or some other sport is too expensive, and parents are unable to pay for them. They can pay for a year or two, until they have to pay for team travels and also training sessions. You know that this is very expensive. So my question is about sport: will you support the development of children’s and amateur sport?

Vladimir Putin: Yes, of course. What did you say your name is?

Alexander Bagrov: Alexander.

Vladimir Putin: Alex said he is a production supervisor, and I immediately thought about my father. He was a production supervisor at a plant, and he was proud of his job. Anyway.

As for children’s and teenagers’ sport, it is certainly an area that should be supported by the state, as I have told your neighbour on your right. But support should come above all from the regions. And big clubs should create a network of smaller clubs for children and teens.

Alexander Bagrov: Yes, our hockey club is working with children very well, and we also have many branches of children’s hockey schools.

Vladimir Putin: Yes, I know, because your acting governor has told me about this just recently.

Remark: It is one of the best sport schools in Russia.

Vladimir Putin: Yes, he spoke about this in detail, including the prospects and what should be done to keep up and develop this area. This is very good.

However, so-called amateur sport should be supported by the regional and municipal authorities. We will do our best to promote and encourage this as the foundation for high performance sport.

Remark: Are you planning to create leagues in other sports, like people come to Sochi for?

Vladimir Putin: Yes, we have an idea of this sort – to create a similar league. Do you mean something like the Night Sports League? Amateur ones?

Remark: A football league, a volleyball league…

Vladimir Putin: A football league – yes. I think they should have created it last year. If not, this should be done soon. Football, yes.

Why ice hockey? Why football? Because these are mass sports.

Remark: Yes, mass sports. We have a lot of ice hockey; we have 20 teams playing in just one league. I mean, a lot.

Vladimir Putin: I know. Yaroslavl is fond of ice hockey, I know.

Remark: Mr President, we have a new Governor in the Yaroslavl Region, Dmitry Mironov. The first thing he did was to visit our plant. We really appreciated this, because the plant is the city’s main employer.

Vladimir Putin: Did he come with me only, or did he come earlier?

Remark: No, he came earlier. He came right away. The new governor’s young team is doing a lot for our city. They got to work quickly and very well.

Vladimir Putin: Are you asking a question or did you just want to praise him – just in case he might do you some favour?

Remark: We didn’t prepare this.

Remark: Oh no, it’s very good, honestly.

Remark: I am a father and I know that no maintenance had been done on our children’s playgrounds for years. But now people come and check the state of playgrounds and they have begun cleaning the streets.

Vladimir Putin: I just wanted to ask if they clean the streets.

Remark: Yes, they do.

Remark: Can I add something? They’ve put in order the city’s historic centre. Banners have been removed and in fact the city has become nicer. Thank you very much, Mr Mironov. We should have more governors like you.

Remark: The Snow Ticket operation was undertaken not so long ago and it has dealt with the collapse on city streets.

We have a question: what are your criteria for choosing a governor?

Vladimir Putin: The criteria are typical, there is nothing secret about this: professional aptitude and [human] decency. I have known Mr Mironov for very many years. He rose through the ranks to Deputy Interior Minister, and he was dealing with economic matters at the ministry as well. He is a very active, energetic and able person; otherwise I would not have offered him this job. And he is very decent; this is one of the main criteria. I hope that he will display his best qualities on this job. Well, this is about all. I wish him success.

Yelena Vasilyeva: While we’re on the subject of leisure, I would just like to add that the guys are into hockey and football, but me, I like to travel too, I love our country.

Vladimir Putin: Me too, I’m always travelling.

Yelena Vasilyeva: I love travelling around Russia’s towns, especially the Golden Ring towns, which include our city, Yaroslavl.

Vladimir Putin: You have three towns within the Golden Ring.

Yelena Vasilyeva: That’s right, including Yaroslavl itself.

Vladimir Putin: Pereslavl Zalessky, Rostov Veliky, and Yaroslavl. What’s the problem?

Yelena Vasilyeva: The problem is that as a tourist, I sometimes encounter our tourism industry’s shortcomings. For example, I really want to stay in good, modern hotels, but at a reasonable price. I would also very much like to see a more developed road and transport network. We all know that tourism is developing rapidly now in Crimea, Krasnodar Territory, and Altai Territory. Could the Government take measures to develop the tourism industry and infrastructure just as rapidly in Russia’s central regions?

Vladimir Putin: You are a very tactful person, putting things like this, “sometimes I encounter…”. Unfortunately, it is not sometimes but very often that we see a lack of organisation and regulation on the domestic tourism market. We do have a programme for developing domestic tourism though. Last year, we had 70 million tourists holidaying in Russia, of which 50 million were our own country’s citizens. We thus had 20 million tourists from abroad. That is quite a few, though there could be more.

It is not a lot if you consider that our country is the biggest in the world in terms of territory, and there is no way that it can be anything but interesting. Just look at Kamchatka alone. We should start allowing cruise ships to come in there and visit various beauty spots. The Far East in general is a magnificent region and very unique. Then there are Siberia, Altai Territory and Republic of Altai, Krasnodar Territory and now Crimea too.

Krasnodar Territory posted the biggest increase in domestic tourism. Sochi has become a year-round resort centre, working winter and summer, just as we hoped. People go skiing in winter, and in summer there is the sea. The two complement each other well. High-speed trains are in operation there now. Two roads run from the lower part of the resort hub up the mountain area, and there are high-speed trains too that take just 20-25 minutes, I think, to reach the mountains. Crimea has shown strong tourism growth since 2014, and Tatarstan is also doing well.

Of course, central Russia and the Golden Ring have great potential. I fully agree with you here. As you noted, the Yaroslavl Region has three towns within the Golden Ring, including Yaroslavl itself. The city’s historic centre is on the UNESCO world cultural heritage list. I certainly hope that the new regional and city authorities will do everything possible to make the region more attractive. The federal domestic tourism development programme is being implemented and this work will continue. I fully share your view that action is needed here.

It is needed because the tourism sector accounts for only 1.6 percent of total GDP. In countries with a developed tourism sector, tourism accounts for 10 percent of GDP, and here, the figure is only 1.6 percent.

Dmitry Vorobyov: I have a question about the armed forces. Our armed forces are developing fast now. They have new arms, a good-looking new uniform, and young people are showing interest in a military career. What else will you do to keep our armed forces strong, if it’s not a military secret, of course?

Vladimir Putin: I will tell you, but you must promise not to tell anyone, OK?

We have a comprehensive programme for developing state defence procurement. As we have said on many occasions, this programme must be compact but effective. We will continue structural reforms and changes and will continue to optimise numbers. This will not require mass cuts to service personnel; we will simply look at the types of forces and different branches and see what needs to be done and how to go about it. We will give particular attention to defence areas such as information technology, intelligence in the broad sense (not just agent-based intelligence but also technical intelligence), communications systems, and, of course, modern high-precision, high-tech weapons.

You have probably noted the regular meetings I have started holding in Sochi every year, in May and in November. During a whole week, I bring together people from the defence industry, the chief designers, directors of the big defence enterprises, the Defence Ministry heads, and the heads of the different armed forces branches. We review the work over the last half-year, look at what has not been done for whatever reason, and settle the steps needed to ensure the state defence procurement programme is carried out as planned.

Our armed forces are not out to threaten anyone. I want to stress this point once more so that everyone hears it, not only those present here today. Our army is not a threat, but it is combat-capable and has become modern and highly effective. We have dramatically increased the number of exercises and training manoeuvres, including the spot inspections that sometimes cause our partners some concern. We do not get alarmed when they hold military exercises, but they immediately start getting nervous when we do so. They must be the nervous types.

Let me say again that we are not a threat to anyone and have no intention of threatening anyone. Why should we want to? We have the biggest country in the world, as I already said, and everyone knows this. Our task is to ensure our own country and people’s reliable security. Our armed forces have what they need to do this and we will continue to develop them.

Perhaps we should start rounding up now?

Remark: One final question?

Vladimir Putin: Yes, the last one.

Question: My question is purely on the human dimension. How difficult is your job? Could you tell us the pluses and minuses of your job?

Vladimir Putin: Speaking seriously, the biggest positive thing of my job is no different from your own. When you see that your job gives satisfaction, see that you are achieving your goals and objectives and doing important work that benefits yourself and all those for whom you work, this is the greatest satisfaction. We always gain this greatest satisfaction from results obtained.

As for the minuses, yes, there are many negative emotions, there’s no getting away from that fact, but in your job too, you no doubt have the same situation when things don’t go as hoped, when someone lets you down, or when other unforeseen circumstances come up. But this is also the charm of our jobs in a way, this ability to overcome difficulties and achieve the needed results. I wish you just this.

Response: Thank you very much.