On December 20, 2012, attending the RF Government session, Minister A.R. Belousov delivered the report devoted to implementation of the measures stipulated by the roadmaps to improve business climate in accordance with the National Business Initiative on improvement of investment climate in the Russian Federation.


Dmitry Medvedev: Colleagues. Today we will discuss several issues linked with previously adopted decisions, including a report on the implementation of measures set out in roadmaps to improve the business climate. I recall that this initiative, which was announced a year ago, is designed to improve the investment climate and to remove excessive restrictions and administrative barriers facing the business community. Roadmaps have so far been approved in five areas.

These areas are the issuing of construction permits, customs administration permits, export support permits, property registration permits and those which ensure easier access to infrastructure. Business leaders always say that these aspects are the ones that cause them the most problems. By 2018 the number of regulated procedures, stages, mutual approvals and all sorts of formalities usually addressed by the state must be significantly decreased.

The effectiveness of this work should be assessed by independent experts, which will help improve our positions in global ratings. As I have repeatedly said, we have started making some headway in this area. In some cases, movement is rather slow and in others we are moving slightly faster.

We are also making headway in construction, an important economic sector. However, many problems remain, including those linked with customs administration, although according to our sociologists 20% of respondents said that the time needed for customs clearance is falling. True, one in five, or even one in three people talk about the increased number of customs formalities. At any rate, this is what sociologists believe.

Executive bodies often adopt a formal approach to the implementation of these roadmaps, and this attitude has evoked justifiable criticism. It is important to understand that these roadmaps are not immune to change. They may be revised and supplemented. In any event, it is essential to use multi-level monitoring. I think this is a vital instrument for telling us what is going on. And most importantly, the implementation of these roadmaps should not be limited to ministerial offices or Government meetings.

The regions should become the main field of activity. Conditions of doing business often substantially differ from one region to another. In February 2012 we approved standards for the efforts of executive bodies to create an attractive investment climate. These standards have already been enforced in many regions. A number of regional governors are present at our meeting. We have invited Ulyanov Region Governor Sergei Morozov and Governor of the Republic of Bashkortostan Rustem Khamitov. I hope they will have their say as well.

The next issue concerns the adoption of the federal targeted programme for the development of the judiciary from 2013 to 2020. The implementation of the targeted programmes that were adopted for the 2002-2006 and 2007-2012 periods have raised the level of technical equipment of courts of law and, I hope, improved the quality of their performance.

The programme we are reviewing today should facilitate the resolution of the most urgent issues facing the judiciary. Its funding exceeds 90 billion roubles. Understandably, all of these funds are allocated from the federal budget. Three quarters of their amount will be spent on improving the material and technical base of the judiciary. By 2020 we are planning to provide all commercial courts with equipment for teleconferences, video recording and broadcasts. This should help courts of law to administer justice as openly as possible and enhance the independence of the judiciary. We want our companies to be willing to file suits within our jurisdiction rather than rushing to courts in foreign countries (the President has recently spoken about this in his address).

We have on our agenda very important amendments to some legislative acts on countering illegal financial transactions. We must curb the activities of fly-by-night companies that are out to legalise criminal revenues, fund terrorist operations, evade taxes and customs payments and launder bribes. The draft is fairly large. I looked through it again today. It contains amendments to most diverse legal acts. I hope these amendments will help improve control over these activities and confiscate the revenues received through economic crimes.

In general, these legal norms are aimed at creating responsibility for money laundering, that is, actions punishable by law in practically all countries. Needless to say, they should not affect law-abiding persons and corporate managers. It is important to maintain balance in this draft. However, in the final count, everything will become clear after it is enforced.

In line with the decisions of the Constitutional Court, we will eliminate different interpretations and gaps in the legislation on taxing individuals that have signed long-term voluntary life-insurance contracts. It is important to prevent dual taxation – that is, insurance contributions plus other insurance payments. This is what happened with the contracts of those who concluded them prior to 2008. Now, only other insurance payments will be taxed. Those who have already paid taxes on insurance contributions must be reimbursed.

And the last point I’d like to make in the beginning of our conversation. Working on the endorsement of priority state programmes, we should not forget those of them that are not on this list. We have agreed on this from the very beginning. Please note that they should be submitted to the Government no later than 20 January of the next year. But we’ll talk about this a bit later.

Okay, that’s it. Let’s get down to work. The first issue is on roadmaps. Mr Belousov, go ahead please.

Andrei Belousov (Minister of Economic Development)Mr Prime Minister, colleagues. Vladimir Putin put forth the National Entrepreneurial Initiative at the conference of the Delovaya Rossiya business association almost exactly a year ago. Just to remind you, this initiative provided the basis for developing and implementing a number of road maps aimed at improving the work of government institutions in the most delicate spheres of government regulation of business. Mr Medvedev has said today that currently we are implementing five road maps in the spheres where Russia is lagging particularly far behind other countries regarding the quality of regulation.

These road maps have to do with improving customs administration (according to the latest Doing Business Index, Russia is in 162nd place among the 185 reviewed countries in the relevant category), the accessibility of electricity infrastructure (184th), business environment in construction (178th) and the quality of government services in the sphere of registering property (46th). The fifth road map deals with export support.

The deadline has passed for some measures on the first three road maps, but before talking about our achievements and remaining problems, I’d like to remind you that the implementation of road maps is monitored at three levels. The first, administrative level, stipulates control of the formal fulfilment of measures by the federal executive body in charge, primarily the introduction or adoption of a corresponding legislative act. The second level implies control by the road maps’ designers, namely the working groups established by the Strategic Initiatives Agency, which assess the effect of planned measures. At the third level, the business community, associations of entrepreneurs and experts assess factual changes in a given sphere and in law enforcement.

All in all, 30 events have been planned in the framework of the approved road maps from July to November and another 35 events for December. What are the initial results? To begin with, it is clear that we have made progress in all of the five spheres, but primarily in relevant legislation. At the same time, assessments by the business community often differ from the relevant assessments by federal executive authorities.

Let’s begin with the road map on improving customs administration. To date, it includes five measures. It is clearly an achievement that we have secured the provision of information about the transaction certificates of foreign trade contracts from commercial banks to the Federal Customs Service in real time. This has created conditions for liberating businesses from the obligation to provide such certificates to customs agencies when declaring their goods.

The most important measure, which should have been implemented by this time, has to do with ensuring prior notification of checkpoints about the goods that are to be moved across the customs border and the use of this information in the system of risk management for taking decisions to allow such goods to leave the country. These measures are designed above all to shorten the duration of customs operations at the border checkpoints.

I’d like to remind you that according to a recent poll, which was conducted by VTsIOM to assess the implementation of this road map, nearly a half of the delivery drivers who cross the border at Torfyanovka said they spend upwards of 24 hours at the checkpoint, 33% said they spend one or two days there, and 22% put the duration at more than two days. The opinions of the Federal Customs Service and the business community differ widely on that issue. The Service has taken a decision on this, issued an order and secured the provision of prior notifications. At the same time, the Association of International Road Carriers (ASMAP) and the working group of the SIA (Strategic Initiatives Agency) have not seen a substantial reduction in the duration of customs operations at checkpoints or any overall improvement. According to a poll conducted by VTsIOM together with Leaders Club Russia, 70% of the respondents said the situation has not improved.

In order to understand this situation, the Federal Customs Service (FCS), the Ministry of Economic Development and the business community have set up a working group, which visited the Burachki customs checkpoint in the North-Western Federal District. This is currently the most problematic checkpoint. This trip cleared up many things. Indeed, the FCS has done much today in the use of preliminary information on risk management. The bottleneck is a shortage of risk management information systems and a lack of communication between the information systems of different departments that are taking part in customs procedures.

The FCS has promised to change this situation during the first quarter of next year. We have come to the conclusion that by the end of the first quarter, the speed of customs procedures may be reduced substantially. Therefore, we suggest that the deadline for these measures should be suspended to complete the work on the information system and secure the full-scale use of preliminary information in risk management until next March.

Another issue of dispute is the endorsement of the procedures for reorganising and eliminating customs bodies. The FCS has also adopted the relevant procedures, but the business community is worried that this draft has left it fully responsible for all decision-making on these issues, with the exception of the elimination of customs checkpoints. We believe this decision of the FCS directly affects the interests of participants in foreign trade. Therefore, we suggest that the practice of assessing the impact of regulation be spread to these measures. Let me recall that at a past meeting, the Government approved the introduction of the procedures for mandatory assessment of the regulatory influence on legal acts on customs starting 1 July of next year.

Now I’d like to say a few words on the roadmap on improving access to power generating facilities. Things are going well here. Out of nine measures that were supposed to be carried out by that time, three have been fully implemented. Business people have confirmed that matters have improved. On five other measures, legal acts are in the process of being adopted, and both the working group and the professional community have reaffirmed that the content of these acts fully conforms to the expectations and the meaning that was programmed into them during the drafting of the roadmap. The first results have already been produced. A website containing an interactive map on accessible connection to electricity grids has already been launched in test mode. With time, this site will be supplemented with more data and adjusted for the convenience of online customers. A standard form of a contract for the connection to electricity networks via capacity redistribution has been adopted. It has considerably simplified contractual relations for customers. In addition, customers with energy-receiving capacities of up to 150 Kw have been given an opportunity to pay in installments during three years for connection. In the past, this privilege was granted only to minor consumers.

In the near term, there are plans to adopt rating indicators of regional investment attractiveness with respect to the ease of connecting to power grids. This rating will also take into account statistics on violations related to connecting customers to power grids, and as such it will inform businesses of the most convenient places to start an enterprise.

In early 2013, we are expecting full-scale introduction of a notification-only procedure for the operation of power-consuming facilities, without the need of additional approval of the Federal Service for Supervision of Environment, Technology and Nuclear Management. In addition, we will raise the current quality standards of grid connection services. In the first quarter, we will adopt the procedure for accelerated grid connection using a temporary scheme, which will make it possible to more quickly begin power supply to new consumers, before moving to a permanent arrangement for power supply. Then we will adopt the schedule for reducing the cost of connecting to the grid, so that the cost of connection services will go down every year.

And, finally, the third road map – improving the business climate in construction. Currently, this is the most problematic road map in terms of implementing the related measures. This road map includes a total of 21 measures, but some of these include subparagraphs. There is a total of 25 [subparagraphs]; of these, the deadlines for 16 measures have passed. Today federal bodies are reporting on the implementation of 11 measures; but the working group says that only two measures have been implemented – these are adding targeted lists of land plots to regional housing construction programmes and measures to develop rental housing. Nine measures are being implemented, that is, the legal acts have been submitted to the Government, and some regulatory acts have been submitted to the State Duma, but they have not been adopted, thus no progress has been made. And five measures have not been implemented.

No measurable results on this road map have been achieved, and we expect the results in the first six months of 2013 at the earliest.

The territorial planning system will be formed soon; we are developing a number of measures to stimulate Russian regions to provide utility, social and transportation infrastructure access for land plots where housing construction is going on. We are developing measures to put idle lands on the market in order to reduce construction periods and costs. In particular, we will increase the administrative liability of officials for violations committed when preparing and issuing licenses for construction in order to reduce the number of such offenses.

A very important point which has not been carried through but is very nearly ready – this is the comprehensive list of administrative procedures in the area of housing and industrial construction. It is so important because today, even under the existing legal framework, there is a big gap between regions with respect to the timeframe and cost of obtaining permits for construction. According to the World Bank’s subnational research, a construction permit requires the completion of 17 procedures in Surgut, and 42 in Moscow, which is the reference point of the Doing Business rating. A permit takes 150 days in Surgut, 344 days in Moscow, and so on. Were Surgut the capital of Russia, Russia’s position in ranking for this indicator would be 111th place and not 178th.

Dmitry Medvedev: So it would be easier to switch capitals rather than improve indicators.

Andrei Belousov: This refers only to one category. We would rather transfer the capital to Ulyanovsk because this city is an absolute winner in the rating – Mr Morozov (Sergei Morozov – Ulyanovsk Region Governor) is present here. If we were to transfer the capital to Ulyanovsk we would move to roughly 70th place.

Dmitry Medvedev: That would make sense. Our capital was once in Leningrad – Ulyanovsk is also a good name.

Andrei Belousov: In light of the point I’ve just mentioned and the existing, huge reserves for improving legal regulation of construction even under the current legal framework, yesterday, after the parliamentary hour, we agreed in the Federation Council to create a special working group, including Federation Council deputies, to analyse and implement corresponding measures in Russian regions.

In finalising the results of these four months of monitoring the road map’s implementation, I want to highlight major problems. Or rather two problems – the violation of deadlines for carrying out measures and the business community’s negative assessment of draft regulatory acts under development. The departments should, without doubt, pay more attention to the result of each measure and not only to the formal submission of a relevant document to the Government.

What is proposed? We all understand that road maps are not meant for adopting laws and directives that are not meant to be implemented; road maps are meant to effect a real reduction in all necessary procedures and the timeframe for issuing permits; road maps are aimed at adopting the best global practices in our legal framework. Following the President’s instruction, the Key Performance Indicators have been adopted for departments. The KPI include respective indicators and methods. We propose conducting measurements of cost reduction, reduction of the number of procedures and the timeframe required for these procedures in major areas of state regulation – in construction, in grid connection, in tax and customs administration – quarterly. We should monitor our progress quarterly and not only based on annual results – the progress we make toward the targets included in the President’s executive order, we should see the real result of our efforts to improve licensing procedures. The draft protocol decision includes relevant proposals. We ask you to support. Thank you.

Dmitry Medvedev: Thank you, Mr Belousov. Take your seat, please.

Do you have any proposals on moving our capital in light of the failure to reach planned targets during this period? Seriously, though, do you have any comments on the report on the measures under the road maps? Because there are many symptomatic things here. Not all of them are absolutely credible or reflect the real situation, but in any case they reflect a trend. Go ahead, please.

Mikhail Abyzov(Minister of the Russian Federation)Mr Medvedev, colleagues, I have a few words to add to what Mr Belousov just said. The benchmarks identified in the presidential executive order with regard to changing Russia’s standing in the Doing Business ranking are based on the World Bank’s guidelines and include data collected in large cities, such as Moscow and St Petersburg. Thus, to have Russia move up in this ranking as the executive order calls for, we need to focus on Moscow and St Petersburg. However, this is not what the roadmap is all about. Its objective is to change the system and the investment and entrepreneurial environment across Russia. Therefore, I believe that we should start developing our own national rating based on the World Bank’s guidelines in the first quarter of 2013 in order to be able to evaluate key performance indicators for Russian ministries and departments. I believe this would help us establish comprehensive monitoring of ongoing changes and see if we are ready to transition to higher-level key performance indicators. That way we will be able to show our people and businesses that the activities that we carry out under the roadmaps help us achieve our goals. For example, in the construction industry, we will be able to see how this affects new housing prices, because fewer and less costly procedures should translate into lower housing prices. Otherwise, this will not be as effective as we want it to be. Of course, it will improve the efficiency of the industry, but the end result should, perhaps, include such considerations as well. Thank you.

Dmitry Medvedev: Thank you.

Are there any other comments? Please go ahead.

Igor Slunyayev (Minister of Regional Development): Mr Medvedev, colleagues, Russia’s 2013 Doing Business rating has already been put together, and all of our efforts and roadmaps are focused on improving Russia’s ratings in 2014 and beyond.

We have held several meetings with the participation of the Ministry of Economic Development and First Deputy Prime Minister Igor Shuvalov to discuss ways of improving Russia’s ratings. We do have positive achievements to show, such as the improved rankings of the Federal Taxation Service, which managed to move up forty points in Doing Business in a matter of two years.

Speaking about construction, this is really a complex problem, involving lots of conciliation procedures… So far, 202 building permits have been issued for 220 million square metres of housing. As you may know, we commission 63 million square metres of housing annually.

Moscow, the Moscow Region, St Petersburg, the Leningrad Region, Krasnodar and other large urban areas pose most of the problems with regard to obtaining building parcels and construction permits. These are the areas where we have to base our decisions on urban development master plans. Nevertheless, the Ministry of Regional Development is actively involved in this process, and I believe that we will be able to turn around the situation concerning the ease of obtaining construction permits. By the way, some of the targets set in the roadmaps are worded incorrectly, because some of the goals, or rather concepts (non-legal ones) that we are required to fulfill, are nonexistent. We asked the Ministry of Economic Development to assign us the proper tasks. That concludes my report. Thank you.

Dmitry Medvedev: Thank you. Does anyone have anything to add? Mr Siluanov, please go ahead.

Anton Siluanov (Finance Minister)Thank you, Mr Medvedev. Indeed, our tax authorities moved up 41 ranking spots, but how did this happen? It happened because the information used by the World Bank hasn’t always been unbiased. It was all due to the lack of reliable information.

Dmitry Medvedev: Shouldn’t we then let them have the good numbers, and see Russia instantly propelled to the top 20?

Anton Siluanov: No, seriously, we worked a lot with the World Bank’s staff providing them with additional materials and information on each incorrectly assessed position. I urge our colleagues to do the same, because we saw that the World Bank doesn’t always have enough updated information about Russia, and things are moving fairly quickly in Russia now. You just need to be more in touch with the World Bank and make sure that they are using updated information.

Dmitry Medvedev: I would like to support the Minister of Finance here. In fact, this is important. Half of the myths and legends about Russia are due to lack of information or distorted information. This is true not only of what we are routinely criticised for, but also the economy, which is a much more complex subject.

Is there anything else left for discussion? Then let the Ministry of Economic Development continue to monitor these processes and draft roadmaps, and we will continue to look into their reports. Thank you.

The next item on the agenda is the judicial system, the targeted programme. Mr Belousov, over to you again. Excuse me, Mr Belousov, let’s first listen to what the governors have to say. Otherwise, we may have no time for them.

Mr Morozov (addressing Sergei Morozov, Governor of the Ulyanovsk Region) before the Government moves to Ulyanovsk and it becomes Russia’s capital, tell us how things are in your region?

Sergei Morozov: Mr Medvedev, thank you very much for your kind words and for this wonderful idea about the capital. Actually, the Ulyanovsk Region has too many problems to claim the status of capital.

You are aware that eight years ago, in December 2004, we were faced with a very hard choice: leave things as they are and start being a regular guest at Mr Siluanov’s office – he may remember our frequent visits – or become a leading Russian region. We chose the second option, which was a difficult path to follow. We tried using trial and error, since this remarkable document wasn’t available back then. The success formula that we discovered corresponded to what you said in St. Petersburg. At first it was just one “i” – investment, which we actively got involved in. Then we realised that we needed to take up infrastructure projects. Then you suggested two more “i’s” – intellect and innovation – and today we have seven i’s under our belt. In addition to those above, we now have internationalisation, integration, and interactivity, and we are entering 2013 with another “i” – intensification. Thus we now have a great success formula and a development strategy for our region.

Mr Medvedev, with your permission, I will not go into details about our experience of implementing the standard, but I would like to say here, in your presence and that of the Government members, that we have implemented all of its basic principles and provisions. This has been confirmed by the SIA expert group. The Ulyanovsk Region authorities had these roadmaps adapted to local conditions and they approved them as well as the corresponding ratings and schedules. By the way, based on the roadmaps and the regulations, compared with 2012 we will cut in half the turnaround time and the number of procedures involved in implementing the standard.

I believe the developers were quite right when they said that the standard is a good start for rebuilding the entire system of relationships and opening a constructive dialogue. Our results for 2012 (we still have a week to go) are as follows: we signed 10 major investment agreements worth nearly 70 billion roubles. All of the investors are international leaders in their respective fields. We are not including investments associated with the manufacture of less important products. I am not talking about investment agreements signed at the municipal level. We believe that once we have this standard in place, we will be able to move up to a whole new level of regional investment policy. Of course, prospective investors now have significantly higher requirements for the Ulyanovsk Region.

I would like to take this opportunity to say a few words. We all know that investors are interested in projects with developed engineering and social infrastructure. In this respect, I believe we need to address several priority issues. First of all, the Federal Government should become more involved in the construction of engineering infrastructure. For example, the Federal Government could subsidise part of the costs incurred by the region during the construction and operation of regional industrial parks. Secondly, we suggest that the approaches to putting together federal social programmes be reviewed. We can see that the funds are primarily being used for purchasing equipment, repairs and the construction of social facilities. This is really very important. However, staff development, training, the introduction of international standards and internships are not being financed at all. These things cost a lot of money, as much as capital projects at times. We would like to have funding for such programmes included in government programmes. In addition, I believe that the federal funding for reforming the vocational training system is not enough. We can see that now investors are looking to hire graduates of such schools and colleges.

Thirdly, we believe that the region should be more active on the international investment market. What do we have today? Investors go through a painstaking selection process trying to identify the best host country. We do nothing to help them choose Russia over China or Brazil. Once they finally decide to invest in Russia, for whatever reason, only then do the regions begin to vie for their attention.

Even the most advanced regions, such as the Kaluga Region or Tatarstan, the Nizhny Novgorod Region or even the Ulyanovsk Region cannot compete with Brazil or China. We suggest returning to the original idea of special economic zones as areas competing for investors from foreign countries, not other Russian regions.We have a situation when they became regional development zones though they are federal in fact. Perhaps we need to revise the way our special economic zones operate and re-focus them on attracting foreign investors, thus turning them into an all-Russian development corporation. Technical management, which they are now engaged in with regard to the management of federal zones, should be transferred to private management companies. They are fairly actively involved in managing regional development zones. I am sure that solving the above issues will help us to greatly accelerate the creation of a favourable business environment. Thank you.

Dmitry Medvedev: Thank you. Mr Belousov  (addressing Andrei Belousov), what do you think about changing the status of the zones and have them compete with foreign-based economic zones?

Andrei Belousov: We think that this is a good idea overall. This idea is not new, and we are currently preparing a set of proposals to change the status and the resource orientation of special economic zones.

Dmitry Medvedev: Mr Siluanov (addressing Anton Siluanov), what do you think about this?

Anton Siluanov: I support the Ministry of Economic Development.

Dmitry Medvedev: Good.

Anton Siluanov: Because we really believe that we need to change the performance indicator for allocating funds for special economic zones. I’m aware that we haven’t achieved the results that we expected to achieve from the introduction of these zones. These zones operate satisfactorily in just two or three regions; others are just treading water; therefore, I believe that it’s important to establish the performance indicators for the allocation of funds for special economic zones. I agree with our colleagues that it is first and foremost foreign companies that should be attracted to these zones and we should create the necessary conditions for them.

Dmitry Medvedev: Thank you. Mr Khamitov (addressing Rustem Khamitov, President of the Republic of Bashkortostan), over to you please.

Rustem Khamitov: Thank you. Mr Medvedev and Government members,

Whereas Ulyanovsk started out on this path eight years ago, we embarked on systemic work in this area just two years ago. Even in such a large and developed republic as Bashkortostan, there was no meaningful work to attract investment in 2010: there were no laws, no institutions, no policies, and no ratings. In fact, even the investment infrastructure was lacking. Now we have it all, including the results: we have signed over 60 contracts for major investment projects totalling nearly 400 billion roubles. We have good ratings and we are in fact making progress.

There are three main issues. First, we need to have rules to play by, such as standards, roadmaps, and monitoring. That’s what we do with the federal government, the SIA. Things are more or less okay in this area. Next, spending and financing. Even a region as strong as Bashkortostan finds it difficult to finance the construction of infrastructure on its own. Not only in terms of investors, but also in terms of housing construction and so on. We need compensation mechanisms. We must think about ways to attract federal funds to such work. We know that there are successful regions out there, but even they have too many loans on their hands. It remains to be seen how they will come out of this situation. So we need to think about how we are going to move in this direction. I don’t think we’ll be able to make as much progress as we want without federal support. The third issue has to do with searching for investors. Mr Morozov mentioned this: it’s about creating clusters and attracting investors in our spheres of competence, such as chemistry, engineering, electronics, and agriculture.

With regard to chemistry, it’s clear that Bashkortostan is a flagship of the chemical industry in Russia. Allow me to remind you of a couple of figures: Russia possesses about 15% of the world’s hydrocarbon reserves, yet we produce only 1% of chemical products and are ranked 22nd in the world. Chemistry can create jobs quickly and also create work for related industries, such as heavy engineering and others.

It is clear that we managed to set the wheels in motion for major companies to operate in Bashkortostan, such as Bashneft and Gazprom and they are heading in the right direction. They have publicly announced that they will invest about 100 billion roubles each to expand the chemical industry. However, we won’t be able to go far without the Federal Government, because the amount of work and investments is huge. It appears that we still have a long way to go in developing clear policies to guide us in our future work. I mean both regional and federal authorities. It’s hard for us to grab hold of the investor juggernaut, because we have no leverage to do so. I suggest holding ministerial discussions with regard to major projects. We should revive the forgotten practice of holding joint boards, joint discussions, and field trips by ministerial experts to our region, because unfortunately this is not practised any more. This also applies to the engineering industry, agriculture, radio electronics, and composite materials, in a word, all the areas that we are currently working on. My suggestions are fairly straightforward as you will see.

Firstly, federal agencies and ministries should be involved in the business of attracting investment. We need to go beyond rules, limits and ratings: we need ministries to start working with us directly.

Secondly, I believe that we could create, at least temporarily, specialised federal management entities for major projects. Market economies practise this approach. We need to do something with our chemistry industry. How are we going to do it? There are dozens, if not hundreds, of areas that need to be taken care of. We will never be able to accomplish this working at the regional level alone.

Dmitry Medvedev: Russia is also a market economy…

Rustem Khamitov: What I’m saying is that countries with 200 to 300 years of market history do have such entities.  I think these competence centres could be established at the federal level with this in mind. We would find it easier to work with them. Say, in five years we will have resolved the task and changed the format. All the more so since we have Rosnano and other examples.

We also need to adjust the criteria for assessing the performance of the regions. They have varying geography, profiles and manpower. It’s not productive to compare, say, Magadan with Sverdlovsk or Kurgan with Moscow. We must make adjustments in this regard because one percent industrial production growth in a republic like ours means much more than a 10% increase in a smaller region. My idea is to enhance cooperation on specific projects with the federal Government.

Dmitry Medvedev: Okay, but you should still start working on par with the Government as well.

Rustem Khamitov: Certainly. We will.

Dmitry Medvedev: It’s possible to create incentives for investors. The Interior Ministry and some other law-enforcement agencies can do a good job in this respect. However, this is our common job. I hope the experience of the Ulyanovsk Region and Bashkortostan – both positive and negative – will be considered. Thank you for raising this issue.

Let’s continue our meeting. Please speak from your seat. Mr Belousov, please tell us about the judiciary development programme.

Andrei Belousov: Thank you. On 20 September the Government endorsed a resolution on a federal targeted programme for the development of the judiciary in Russia in 2013-2020. Based on this concept the Ministry of Regional Development, the judicial agencies and other concerned agencies drafted the programme. It is aimed at creating the necessary conditions for administering justice and ensuring the openness, accessibility and independence of the judiciary. It is also directed at building an effective system of enforcement proceedings and enhancing the transparency of compulsory execution.

The programme identifies five main directions. The first one is to introduce modern information technology into the judiciary system. The budget allocates nine billion roubles for this purpose. It is to develop a so-called electronic justice system. Courtrooms will be equipped with video-recording and teleconferencing equipment; mobile justice will be introduced in commercial courts; judges will use mobile offices with video and teleconferencing equipment for conducting assizes in remote areas of the country.

We consider it important to ensure the protection of witnesses. Thus, general jurisdiction courts must be provided with special equipment to prevent the visual observation of victims and witnesses during interrogation.

The second direction is the biggest in terms of funding (it will absorb almost two thirds of the total funding or 64.5 billion roubles). This is the construction, reconstruction and purchase of 92 regular court buildings, 11 commercial court buildings and 22 territorial department buildings of the Federal Bailiff Service.

The third part deals with providing judges with housing and granting court employees subsidies for the purchase of accommodation. The budget appropriates 7.3 billion roubles for these purposes.

The fourth is to equip courts of law with technical security systems and easy alarm access. The funding is three billion roubles for this.

And, finally, the fifth direction is to introduce modern information technology into enforcement equipment. The budget is 1.7 billion roubles.

Under Article 124 of the Constitution the programme will be implemented exclusively at the expense of the federal budget. No extra-budgetary funds will be spent on it. The total funding of the programme is budgeted at 90.6 billion roubles over eight years, including 68.4 billion roubles of capital investment. Ten billion roubles are expected to be spent per year in 2013-2015. The draft resolution and the programme, per se, has been endorsed by the Constitutional Court, the Supreme Court, the Supreme Commercial Court, the Judicial Department of the Supreme Court, the Ministry of Justice, the Ministry of Finance, the Ministry of Communications and Mass Media and the Federal Bailiff Service. We would like you to support the positive opinion of the Ministry of Finance.

Dmitry Medvedev: Thank you. Ladies and gentlemen, what questions do you have on the federal targeted programme on the development of the judiciary? This is a very important programme. The main thing is to have enough money for everything. So, shall we support it? Okay, it’s a deal. Thank you.