"Today, as usual, it the message will go about our tasks in the economy, the social sphere, in domestic and foreign policy. More attention this time take the economy, social issues and domestic policy. We have to solve all these problems in complex, unusual conditions, as it happened many times in history. And the people of Russia once again proved that they are able to answer these challenges", - said Putin.
The performance lasted for about 70 minutes, and during that time, of course, impossible to cover all key aspects and topics affecting the development of the national economy and providing prospects for the long term.
Russia's economic strategy
In the Message to the Federal Assembly Vladimir Putin noted the importance of maintaining macroeconomic stability. General Reserve Fund 1,992 trillion rubles., NWF - 3,133 trillion foreign exchange reserves of the Bank of Russia increased.
Vladimir Putin instructed the government to develop long-term development program until 2025
"I charge the government with the participation of leading business associations no later than may of next year to develop a substantive action plan 2025, the implementation of which will allow at the turn of 2019-2020 to get on the pace of economic growth above the world, and thus to build up Russia's position in the global economy," he said.
We should also mention the need for a clear understanding of the processes occurring in the global and domestic economy. Without it will be impossible to establish the correct sequence of actions in the framework of such program.
Putin stressed that the forecast should be adjusted and to reflect the interdependence of sectors and segments of the economy.
"We need to clearly define what contribution to economic growth will contribute to improving the business climate, launching large investment projects, increasing non-oil exports, support for small and medium enterprises, other measures, what will be the role of regions and specific sectors of production," he said.
This is an extremely positive point, because without an understanding of the clear relationship between sectors and the developments in the world economy, which led to the current crisis, it will be impossible not only an effective remedy, but against such threats in the future.
"I want to emphasize that the stabilization means automatic transition to sustainable development. If we do not solve the basic problems of the Russian economy, not start in full force new growth factors, years can hover near the zero mark. Initially we have to take a haircut, to save, to postpone its development, and this we can not afford", - said the President.
The state of the economy
Vladimir Putin has offered to cease to blame the anti-Russian sanctions, explaining the downturn in the economy. Need to focus on solving internal problems: the shortage of investment resources, modern technologies, professional staff.
Putin noted that the country has passed a difficult path in the last two years, as it faced serious economic challenges, unfavorable situation on the world markets, sanctions. He noted that external forces tried to force Russia to "dance the tune of others", ignoring the fundamental national interests.
However, he acknowledged that the main causes of the economic crisis lie in domestic issues.
"However, the main causes of the deceleration of the economy lie primarily in our domestic issues: the deficit of investment resources, modern technologies, professional staff, lack of development of competition, shortcomings in the business climate", - said the President.
With the main negative consequences have managed to cope.
"We have ensured macroeconomic stability," - said the President. The downturn in the Russian economy in 2016 will amount to only 0.3%. Already there has been a growth in industrial production.
"Let me remind you that the lowest inflation rate recorded in 2011 - 6.1 percent. I repeat: this year may be even less. This means that in the following we can really achieve the target of 4%", - said Putin and added that this is a good base in order to achieve significant economic growth
The President reminded that in 2015 inflation was 12.9%.
"I hope that this year it will not rise above 6%, it will be 5.8 percent. The dynamics are obviously positive and significantly positive," - said Putin.
The head of state announced about the termination of recession in the real sector and a trend to a slight increase in the industry.
He also spoke about the state of the reserves: "We have maintained financial reserves. The total amount we have from the Reserve Fund 1,992 trillion rubles., NWF - 3,133 trillion in dollar equivalent is $103,86 billion has Not decreased, but even has grown up foreign exchange reserves of the Central Bank. If at the beginning of January 1, 2016 it was $368,39 billion, now $389,4 billion Here the dynamics is also positive".
Agro-industrial complex feeds the country
Agriculture is the industry that feeds the country and conquering the international markets, but recently talked about it not only as the "black hole". Impetus to the development of the given sanctions.
Putin devoted to the state and prospects of agriculture, a sufficiently large part of its report. Agriculture in General is a point of growth for the world economy at the present time, therefore, for Russia such attention to this sector by the President is a positive signal.
According to him, the opinion about agriculture as a "black hole" that has long been a staple in the Russian Federation, it is not true.
"APC is a successful industry that feeds the country", – said Putin.
However, he proposed to give the regions greater autonomy in the allocation of subsidies, as it is the regional authorities depends on the successful development of the sector. But the President noted that more freedom also means increased responsibility: "If we give more autonomy to use budget funds, and the responsibility of the regions for their efficient attachment and problem-solving should also be increased. Need to pay special attention to supporting agricultural cooperation".
Also not without mentioning sanctions.
"As we have people say: a blessing in disguise, our so-called partners have imposed sanctions, we retaliate. Well, helped in the domestic market for our farmers, but we must not forget that it may not and probably will not continue forever," — said the head of state and added that consumers, in any case, the need in a competitive market, so now you must use the current favorable situation.
He said that now the export of agricultural products brings in more revenue than selling weapons, and that were previously impossible to imagine.
Last year, exports of such products amounted to 16.2 billion rubles, at the end of 2016 the figure will be even greater.
The translation of the defence industry to civilian production
The military-industrial complex have shown a good example for other industries. However, we must now focus on the production of civilian goods, because the order of the Ministry of defence can't be long at such a high level
The issue of development of the military-industrial complex of Russia has always stood sharply enough. In addition, it has long been clear that only on the public procurement and arms export sector will not be able to exist a long time, so it was necessary to raise the question of the transfer of defense industry to civilian production.
This is what made Vladimir Putin.
"We conducted a thorough modernization of defense enterprises. You need to target the industry for manufacturing modern competitive civilian products for medicine, energy, aviation, shipbuilding, space. In the next decade, its share shall be not less than one third of the total production in the defence industry", – he said.
However, he voiced a clear enough targets for the share of production of civilian goods at the enterprises of the defense industry: in 2016, the share was 16.1%, 2025 – 30%, by 2030 at least 50%. In the next five years, the proportion will not be much to grow, because now the defence Ministry has a lot of orders in connection with the performance of their respective weapons programs.
"I ask the government to organize systematic work on this task with the participation of development institutions VEB the Russian export centre, the industry support Fund", – said the President.
He also reported on the growth of production in 2016 of 10.1%, and expected growth of labor productivity in the sector by 9.8%.
The development of medical technologies
Given that economic growth depends on human capital, natural population growth is the most important task of the state. The efforts of the authorities aimed at the implementation of population programmes.
According to modern economic theories, the next economic boom can be achieved through development of medical technologies. Therefore, Russia is extremely important not to lag behind in this segment. Vladimir Putin, this issue spent a large part of his message.
"Over the last ten years a 15-fold increase in the volume of high-tech medical care. Hundreds of thousands of complex operations are made not only in leading the Federal centers but also in regional hospitals. If in 2005, when we started this program, 60 thousand people in Russia received high-tech medical care, and in 2016 it will be 900 thousand Also still need to move on. But still, compare 60 thousand and 900 thousand the Difference is significant", - said the President.
He said that next year it is necessary to implement mechanisms for sustainable financing of high-tech care. This will provide an opportunity to further improve accessibility, reduce waiting time of transactions.
Putin noted that the problem in health care is stored as a whole, especially in primary care and its development should be given priority.
Starting next year, on the basis of Federal and regional medical centres and universities will be organized regular training of doctors. In this case the expert with the educational certificate will be able to choose where and how to improve their skills.
Will also increase the level of Informatization of health in order to make easy and simple appointments, documentation.
Also with the help of information technology is substantially improved control over the market of essential drugs. This will allow to get rid of the fakes and counterfeit goods, to prevent the overpricing in the procurement of medicines for hospitals and clinics.
Over the next two years offer you to connect to high speed Internet all the hospitals and "clinics of our country. This will allow doctors to even in a remote city or town to use the possibilities of telemedicine, quickly get the advice of colleagues from regional and Federal clinics. I want to draw this to the attention of the Ministry of communications. The Minister assured us that this task is realistic, doable," the President said.
The development of the technological sector
Vladimir Putin address to the Federal Assembly proposed to connect to high speed Internet all medical institutions for telemedicine. He also urged to extend the benefits of insurance contributions for IT companies.
Without advanced technology, the development of modern economy is impossible. While Russia has largely been among the Laggards in the race in the framework of the 5th technological structure, which was formed in the late twentieth century.
Unfortunately, political and economic consequences was not given of the Russian Federation to take a leading role in the universal computerization, the introduction of the Internet, the creation of new chemical technologies, new materials, etc., although the Soviet Union was the leader in the race for the 4th technological way. The share of such technologies in the economy had to be up to 60%, but in Russia this figure is much lower.
Now must preparing for the introduction of technologies of the 6th technological structure, and it is primarily the widespread use of advanced technologies, including nanotechnology, for example, graphene.
Putin called the IT industry one of the fastest growing sectors of the domestic economy. According to him, the export volume for five years has doubled, reaching $7 billion, although more recently the figure was closer to zero.
"I propose to launch a large-scale program of economic development of new technological areas, the so-called digital economy. In its implementation, we will rely primarily on Russian companies, research and engineering centers of the country. It is a matter of national security and technological independence of the country", - said Putin.
Judging by these words, the question of the introduction of technology in the economy will grow, Russia has more than 20 years to reach the necessary peak in the framework of the 6th technological structure.
The President also noted that the industry's growing revenues and tax revenues, and this has been achieved at the expense of privileges on insurance premiums.
"The Ministry of Finance has asked me not to say that it is only because of the benefits. I say that there were other tools to support industry, but we have to recognize that these benefits have played a significant role in the support of IT companies. This measure allowed them to effectively implement their intellectual and innovative potential," Putin summed up.
Therefore, it is proposed to extend these benefits.
"In the beginning, in 2010, their tax deductions was $ 28 with a small billion, and two years later - already 54 billion. the so-called lost income with benefits - a total of 16 billion rubles to support such dynamics propose to extend these benefits until 2023," said Putin.
He also noted the need to commercialize research and development, transform research and research projects into successful commercial products.
"Next year at leading universities, including regional ones, will create centers of competence. They are designed to provide intellectual and human resources to support projects related to the formation of new industries and markets. A powerful factor in the accumulation of scientific and technological groundwork for economic growth and social development should serve as a fundamental science", - said Putin.
Construction of residential real estate
In the Message to the Federal Assembly Vladimir Putin noted the importance of maintaining macroeconomic stability. General Reserve Fund 1,992 trillion rubles., NWF - 3,133 trillion foreign exchange reserves of the Bank of Russia increased.
Traditionally, construction is one of the indicators of the state of the economy, so this sector should be supported.
"In 2015 in Russia was introduced more than 85 million square meters of housing. This is a record indicator for all history of the country", - stated the head of state.
However, now the cost per square meter is too high, many families simply can't afford to buy a home. We are talking not only about capital, but also on the regional centres.
In this regard, Putin noted that it is necessary not only to build, but also implement the property.
"Therefore, it is necessary to raise the purchasing capacity of people, I mean our program to support the mortgage", - said the President.
The Development Of The Far East
Separately, the President touched upon the development of the Far East. He instructed the government to fulfil all obligations which had been accepted previously.
"I ask the government to fulfil all their obligations in relation to the Far East. Active Eastern policy of Russia was dictated not by conjecture, not a cooling of relations with the United States, and national interests," Putin said.
For Russia, the far East should become the main platform for technological cooperation with a large number of countries. In this way, for example, is China, which has signed agreements on cooperation in science and technology with countries along the silk road.
In this case, Russia is not even necessary to begin such a global project as the silk road, as for the development of this potential is all the original data.
In particular, Vladimir Putin about need of development of cooperation with Asian countries.
"The Russian-Chinese partnership is a model of world order, built on the harmonious interests of all States. Every year we have new joint projects. Also the priority of our foreign policy is the development of relations with India and Japan. We have a huge potential of cooperation with Asian countries", — said the President.
Banks and lending to the economy
Putin suggested to think how to stimulate Bank lending to the real economy, supported by proportionate regulation in the banking sector.
"The recovery of the banking sector, and the Central Bank. All this is a good basis for rapid economic recovery, the development of lending to the real sector. In General, in several States, banks were created incentives for crediting the real sector of the economy, while some countries are considering restricting the ability to invest borrowed funds in financial instruments.
I'm not saying that everything that is done abroad, we need to blindly copy, especially that the Russian economy and its structure differs significantly from other countries who apply such measures. But to perform all this practice, to adopt all the things that suits us, possible and necessary", - said Putin.
In many countries, is successfully operating non-banking financial sector, should be promoted in Russia. "All this allows us to attract funds into the economy, investors and citizens through bonds and other mechanisms. I hope that the Bank of Russia and the government will jointly work out proposals for the development of the financial market. Everything must be aimed at economic growth. However, any changes should not lead to the manifestation of macroeconomic imbalances and to inflate the so-called "bubbles" in the economy", - said the head of state.
Putin supported the proportional system of regulation of the banking sector (banks division into three groups is systemically important, and universal banks with a basic license, specializing in lending to SMEs and natural persons).
"Such differential regulation of the banking system will allow customers to contact the Bank that best suits their needs, a small business will experience competition for loans from large companies", - said the President.
Proportionate regulation will not create risks for the banking system, given the modest share of small banks is only 1.5% of Bank assets. "Each of the levels of the banking system should be healthy and sustainable to clients and investors could be confident in the security of their funds", - said Putin.
Russia needs a predictable tax system, which should work on the main goal - the promotion of business activity. In 2017, you need to configure the tax system, and until 2018 to adopt all the amendments to the tax code, said the President.
"I propose in the next year in detail and comprehensively to consider proposals for setting up of the tax system, be sure to do it with the participation of business associations. Despite the political calendar, we still need in 2018 to prepare and make all appropriate amendments to the legislation, the Tax code, from 1 January 2019 to enter them into action, registering a new stable rules in the long term.
In 2014, the decision was made to freeze the existing tax environment for business. We did not review them, despite changes in the economic situation. This had a positive impact on the operation of enterprises. However, we must Orient our tax system to make it work on the main goal - to stimulate business activity, economic growth and investment, creating competitive conditions for the development of our businesses. Need to streamline the existing fiscal incentives to make them more targeted, eliminating ineffective tools," he said.
The road network
In his Message to the Federal Assembly of the Russian head of state urged to pay attention to Federal highways.
Large-scale work on the modernization of the road network are also in Moscow and St. Petersburg. And in 2017 the same large-scale projects will be implemented in cities and urban agglomerations with a population of about 40 million people.
"The decision was made, the funds planned are appropriate, only need to work effectively", — said Vladimir Putin.
Construction of Crimean bridge across the Kerch Strait is on schedule, he said. It is an object of national importance, the President said
What is not said Vladimir Putin
Unfortunately, the format of the message does not allow comment on all aspects of the development of the domestic economy, so many questions still remained unsolved.
For example, regarding the development of industry in Russia is "industrial development Fund", this tool has shown its effectiveness, but it needs to capitalize. There is no sense to invent a new development institutions or search for new paths, if there is already a working and successful tools.
In addition, it is necessary to solve the issue of "long money" in the economy. Here would help the development of the Institute infrastructure bonds, what they say, economists and representatives of the business community, but, in General, the question is almost not worked out.
Part of the President mentioned the need for a clear understanding of the interrelation of sectors within the economic development plan, but might want to raise the issue of the new input-output balance. When the government makes decisions on, for example, the tax maneuver in the oil sector, it is necessary to understand exactly how this will affect the metallurgy, construction and so on. Now it is not, therefore, many solutions do not achieve maximum efficiency.
If we are talking about the need for more active construction, then this issue should be studied more carefully. Perhaps the return of national projects would play a positive role, but it is clear that construction needs a new and ambitious program.
The issue of financial literacy also was not raised, although this is an extremely important factor in the development of the financial sector. Improving financial literacy means not just knowledge about loans, deposits, etc., but also promoting entrepreneurship, small business. Without these programs, even stimulating small businesses, will be extremely difficult to achieve significant growth in the share of small business in the economy. Roughly speaking, the boys should dream to open his own business like in the 60's dreamed of becoming astronauts. Now we are working on improving the conditions for such enterprises, but informational support is almost none.
Pressing issue is the pension reform, although this question is generally one of the main in many countries. It is quite clear that there is no other way to achieve at least relatively balance in the pension system besides raising the retirement age. The authorities have postponed the issue until 2018, but to discuss it now.
In addition, the replacement rate of income at retirement remains extremely low.
We should fight it, including through the modernization of accumulative mechanism of pension system. Yourself to increase of cumulative part of the final very few citizens of the country, so, on the one hand, we need large-scale information campaign, using the state to stimulate the growth of these contributions.
First of all we are talking about tax incentives to employers who help citizens who do not have the opportunity to increase the cumulative part of the pension.
The President also said about privatization. Meanwhile, total privatization is now dangerous. Yes, the decline in the share of government in the economy in most case it is useful. A few years ago, Yevgeny Primakov said that without the privatization of state property to do difficult, but to hold it is necessary not only with an eye on the budget.
But the criterion of necessity should be the level of production efficiency with a particular owner.
Why sell the asset if he makes a profit? Yes, the budget will be transferred the necessary money, and often very large, but in the long term the budget will receive more in the form of dividends. In addition, in some cases, for example in the financial sector, the state control over companies may reduce their stability.
From the point of view of the state completely privatized the meaning of company that do not bring profit and increase the efficiency of which is practically impossible.
The effectiveness and necessity of privatization is still open, but it is clear that it is impossible to carry out the sale of state assets for sale. Moreover, the current macroeconomic situation, when cheaper assets around the world, is not conducive to profitable deals.
You can sell the shares of Sberbank and Rosneft, investors will buy them, as prices are now very attractive and large investment of the company confirm that the value is greatly underrated, but as far as immediate profit is more important a stable income in the long term? Perhaps the government should consider improving the efficiency of distribution of profits to shareholders in the companies under state control and receiving the income, to ensure a more equitable dividend, and only then make decisions about possible privatization.
And if potential investors will know that they are guaranteed to receive dividends, the total amount of which would be 3.5% of the net profit and not even 25%, and much more, the chances of a successful and profitable privatization will increase markedly.
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