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DMITRY MEDVEDEV: Ladies and gentlemen,
It is with pleasure that I welcome you here to Siberia, where one of the Russian economy’s growth centres is emerging.
A week ago, the President outlined the main directions for our country’s development until 2020. These main directions are: building a society that provides better living standards and offers equal opportunities for people to realise independently their talents and skills; developing an innovation-based and dramatically more effective economy; and creating a large middle class.
This will be a Russia in which its citizens can take pride not only in its great past but also in its present and can look upon their land as the best place to live in the modern world.
These are ambitious goals but I think they are entirely realistic. Attaining these goals calls for a responsible and consistent policy, a policy that makes the individual and the future of millions of Russian families its central focus.
Today, I would like to look at the steps we need to take in the upcoming period.
Our policy is founded on a principle that, for all its self-evidence, I consider the most important in the life of any modern state seeking to provide high standards of living. This is the principle that the existence of freedom is better than its absence. These words are the quintessence of human experience.
I am talking here of freedom in all its different manifestations: personal freedom, economic freedom, freedom of self-expression.
I think that achieving harmony between freedom and law and order is crucial at this stage. Empress Catherine the Great wrote on this subject: “Freedom is the soul of all things and without it all is as if dead. I want obedience to the laws, but not to the laws for slaves”.
Freedom is an inseparable part of citizens’ acceptance of the rule of law. Freedom does not mean chaos but respect for the country’s laws. The supremacy of the law should be one of our greatest values.
I have spoken many times about the sources of a legal nihilism in our country that remains a distinguishing feature of our society. Breaking the law must be excluded from the national habits that are part of our people’s daily lives. We must end this disrespect for the law that enriches some and corrupts others.
One of the reasons for this disrespect is that, unfortunately, our laws are not always of a high quality. Of course, this is partly due to the fact that we have created the legal framework for a new economic system in record quick time, and not everything was carried out at the highest professional level.
Today, it is important to work consistently on improving the laws and adapting them to meet the needs of Russian society and the objectives we are pursuing. They must be innovative in character and designed for modernisation.
Each new law must undergo detailed analysis to assess its likely effects on people’s lives. New obligations and costs must be justified and in principle should have the agreement of a large part of society. I think that all legislative initiatives and draft laws should go through a process of public discussion and expert assessment by public organisations.
Respect for the law is no less important an issue. The poor quality of some laws is never an excuse for breaking them.
We are, in essence, at a historical crossroads.
We can either continue to live according to the old adage that the harshness of Russia’s laws is offset by not having to actually abide by them. But I think that such an approach is incompatible with our goal of building a modern society. Disrespect for the law inevitably leads to disrespect for the rights of others and neglect of one’s own duties. What kind of equal opportunities can we speak of if everyone knows that justice will always be on the side of whoever’s ‘teeth are sharper’ and not on the side of those who obey the law?
Or we can take the only positive option open to us now and radically change the way our laws are enforced.
We need to start with ourselves, all of us, civil servants, police, judges, prosecutors, businesspeople, each of us in our own job.
Only then will our citizens feel that they are the masters of their own country and that they can always defend their honour and dignity, freedom and security. And they will know that the state will protect them from the kind of arbitrary action we have seen in our society.
This requires political will and civic courage. I and this country’s leadership have this political will. This is essential. We have no other road. This is the only way we can build a normal society and offer a normal life. This is the minimum condition, the foundation on which we will continue to build the Russia of the present and the future.
Our journey along this road must begin with an improvement in the judicial system’s work that is visible to all. We need to do everything we can to give people confidence that the courts are places where just decisions are taken and where they can find protection from those who break the law, be they street hooligans or state officials. Officials who fail to obey the law undermine trust in the rule of law and the democratic foundations in general.
Our key priority over the next four years will be to make the judicial system genuinely independent from the executive and legislative branches of power and ensure that it is professional and offers fair and equal access to justice for all.
This will require us to take measures in several different areas.
First, we must eliminate the practice of unfair decisions made through connections or for money. This requires determination and responsibility from the whole of society, but above all from the magistrates, the judges.
Second, we need to draw up a system of measures aimed at compensating citizens and organisations for losses suffered as a result of unjust decisions and red tape in the court system. These measures should be applied to all kinds of cases and the compensation should come from a fund specially set up for this purpose.
Third, we need to work further on making our justice system more human, above all by relaxing suppression measures taken before a court verdict is passed, and also by improving conditions in the country’s prison system. We also need to establish a mechanism for investigating cases when unfounded criminal charges are brought against people and subsequently dropped without any verdict being passed.
Finally, we need to develop procedures for resolving disputes before going to court or outside the court system. This is especially essential for disputes between citizens and state organisations.
The situation remains unsatisfactory not just in the justice system but also in administrative life – the area where citizens come into contact with the work of individual state officials.
Civil servants must realise that they are in the employ of society and that they are responsible before the whole of Russian society, before Russia’s citizens.
Several measures are required in this area.
First, all administrative procedures should be fixed in the different state organisations’ regulations and should be as convenient as possible for the public. We have been talking about this for five years now but we have yet to make progress. I started tackling these tasks as part of my work in the Presidential Executive Office. This is something we need to do not so as to produce yet more bureaucratic documents but so that our citizens know the responsibilities of each official and have the real possibility of complaining about illegal action or failure to act. There must be no question of guilty officials being able to avoid punishment in such cases.
Second, we need to change the very ideology underlying the administrative procedures associated with opening and conducting business. We need to trust people and give them the opportunity to make their own decisions.
I think it would make sense to replace the majority of procedures based on seeking official permission for procedures based on notifying the authorities. This is probably the only way to give people real opportunities to develop small business, which today is drowning in a swamp of bureaucratic indifference and corruption.
The many months of collecting all the approvals needed for starting a business or building a new production facility must become a thing of the past. Subsequent supervision, and only subsequent, not of any other kind, should be delegated to regional or even municipal level. At the same time, civil liability insurance and credit organisations need to play an expanded role. This is absolutely not the case at the moment. We also need to toughen the penalties for non-compliance with the law.
Third, a substantial number of the functions carried out by state organisations should be transferred to the private sector. This would make it possible to considerably reduce the number of civil servants and municipal officials.
Fourth, while cutting back excess numbers of civil servants we also need to introduce a system of suitable material incentives to encourage highly qualified professionals into the civil service. Civil servants should be rewarded according to their responsibilities and performance. The state is as if ashamed that its officials are not terribly effective and underpays them accordingly, but we will not get very far with this approach.
Fifth, we need to raise the quality of management in public sector enterprises. I think that the majority of state officials in these companies’ boards of directors have no real reason to be there. They should be replaced by genuinely independent directors hired by the state to realise its interests.
Finally, the sixth and perhaps most important point of all is that in carrying out these measures we must also enter into real battle, a difficult battle, with the serious disease that has infected our society – corruption. We need to draw up and carry out a special national anti-corruption plan.
It is also important to understand that access to justice, being able to defend and enjoy one’s rights and freedoms, and success in the fight against corruption are inseparable from citizens’ right to receive accurate information. We must protect the real independence of the media, which provides the channels for feedback between society as a whole and the state authorities.
Another subject I would like to draw to your attention today is that of the disregard for private property, which persists in our society today. There are several reasons for this state of affairs.
First of all, during the Soviet years, the state was practically the only owner of any consequence, and over the decades we quite simply forgot just what rights and obligations private property entails. Second, the first round of privatisations carried out in the 1990s left society with a sense of injustice. Today, the state itself often fails to protect ownership rights in full measure and this creates a sense of impermanence among people with regard to their ownership status.
It has not been easy developing a business environment over these last 20 years. Faced with a situation of total collapse and absence of laws people found themselves constantly having to balance between criminals trying to seize their assets on the one hand and pressure from foreign capital, able to buy up all potentially attractive assets on the other hand.
People clearly did not realise immediately that the market economy in Russia was not going to be just a brief season of economic freedom on the lines of the [1920s] New Economic Policy. The majority of owners therefore kept most of their profits abroad, just in case. Many also acquired citizenship of another country. Only with time did they slowly begin to realise that Russia and its greatest assets, its people, are the main source of Russian business success.
But constantly looking back at the past is a dead-end road. Over these last years we have seen new companies emerge virtually from scratch. We have seen how companies privatised earlier have become transparent and efficient. Today they are in the process of becoming large public and sometimes even international corporations. I am sure that the very concept of private ownership will be rehabilitated within society over time and will come to be seen as something valuable created through honest labour.
Respect for private property must become one of the pillars upon which the state’s policy is built. In its own respect for property the state should set an example for society as a whole and for each and every citizen.
Widespread cases of illegal seizures of companies, so called raiding, are one manifestation of disrespect for ownership rights and for the work of others. How can we encourage initiative and motivation when entrepreneurs know that at any second bandits can deprive them of their business? This is a relic of the kind of relations we saw back in the 1990s. We must act urgently today to pass a package of anti-raider laws, and we must ensure that these laws are not just banal declarations but create real instruments for preventing these practices.
We have a unique opportunity to continue economic transformation not by carving up assets, as has been the case in our past, but by recognising the undeniable value of ownership rights.
We are carrying out a lot of work in the financial sector to establish a normal investment environment. This involves ensuring macroeconomic stability, developing the country’s financial institutions and creating opportunities for raising financing on the international markets. We are now seeing a real investment boom as a result.
But this boom is characterised by investment being concentrated in the big companies, above all the state-owned companies. We have to admit that we have been running the economy in manual over these last years.
The time for this kind of hands-on spot decision-making in the economy is over now. The new economy calls for a completely new approach: incentives for innovation and not directives issued from above. It is private initiative and motivation to create and spread the use of new technology that must form the foundation of this new economy. What we need are decisions and technology that will make us competitive not only on the domestic market but on the global market and ensure that there are always areas in which we have the lead.
The modern economy’s development should be based not on a handful of large companies but on hundreds of medium-sized businesses and tens of thousands of small businesses that enjoy genuine economic freedom.
One of the obstacles to innovative breakthrough is the situation with taxation.
We live in a global economy and not on an isolated island, and our tax system must be competitive compared to other countries’ systems. Only then can we hope that people will invest in our country, and not just foreigners but above all our own business.
The state should collect only as much tax as it needs to carry out the functions essential for society’s existence, to ensure that national business does not flee to other countries and to keep the economy healthy.
With these objectives in mind, the following measures should be taken in taxation over the upcoming years.
First, as the President said just recently, we need to pass a law as soon as possible that sets out a timetable for introducing a single reduced VAT rate. At the same time, we can continue the work to analyse the expediency of replacing VAT with a sales tax. We should not forget that not even the most advanced European Union countries have succeeded in completely resolving the problem of deductions and what amounts to the theft of VAT from the budget, a problem that affects our taxpayers and tax authorities.
Second, the situation with the tax on profits requires several decisions. Above all, we need to give taxpayers greater flexibility in deciding on the depreciation system and also introduce mechanisms for additional incentives for research and development work, introducing a higher coefficient for research and development costs, for example. For 15 years we killed private sector motivation to invest in research and development and today it is quite simply our duty to repay this debt, as it were.
Third, we need to change the principles governing the setting of taxes and export duties in such a way as to create incentives for building new facilities for the refinery and processing of natural resources. Investment in oil refineries in particular should be aimed at introducing the latest technology and producing petroleum products of the highest world standards. Today, it is often more profitable to produce fuel oil than highly refined petrol, and this is an absurd situation.
Fourth, the situation for small business requires a special decision. Above all, steps must be taken to vastly simplify tax accounting procedures. The amount of tax accounting should be in keeping with the size of the business and basic tax declarations should fit on a single page.
These tax proposals could lead to tax revenue losses, but I am confident that this would be only in the short term. We all know that not all businesses are working in the open yet and the potential for increasing the tax base by improving tax collection has not yet been exhausted.
The decisions on VAT will also enable us to improve the tax administration situation. This concerns above all minimising the possibilities for companies to register under false names and addresses, combating illegal use of tax breaks and preferential regimes and, one of the most important areas in my view, combating attempts to reduce the tax base for the consolidated social tax. Employers and employees must realise that not disclosing real wages amounts to stealing from the pockets of everyone in our country, and, especially sad, from the pockets of every pensioner.
Along with the tax situation, the state of the financial markets is another crucial factor in establishing a comfortable investment climate.
The world economy is going through a difficult time at the moment. The difference with past financial crises is that the problems this time have emerged in the markets that only yesterday were seen as the most stable – the U.S. and European markets.
Our economy’s growing openness is most definitely a positive force today, but while bringing considerable benefits it also exposes us to risks. Our citizens felt this in their own lives over the last year. The rising food prices and the drop on the stock markets are diseases that have come to us above all from abroad.
The latest events, which practically amount to a revolution in the financial world, make it eminently clear that we must build a strong, independent and at the same time open financial system. It must serve as a security guarantee for our country’s development on the one hand and contribute to the stability of the world economy in general on the other.
The financial world is currently setting the rules of the game for the future. The role played by the main reserve currencies is undergoing rethinking. We absolutely must make use of these opportunities and take measures aimed at ensuring that we can achieve one of the long-term goals the President announced – that of becoming one of the world’s biggest financial centres, the attractiveness of which is based in part on a stable Russian currency, a currency that is convenient to use on world financial markets and that ultimately would become one of the regional reserve currencies.
We need a sustainable financial system that can ensure that citizens’ savings do not lose their value and that provides sufficient resources for business projects ranging from opening a restaurant to building an electric power station. The financial system also needs to be able to meet the demands of our citizens as they strive to improve their own living standards, counting not just on current but also future income.
A whole package of measures will be required here.
First, we need to launch instruments for long-term refinancing in the banking system. The banking sector needs long money. We need to look at how we can make use of the National Prosperity Fund and pension savings in this respect, and this calls in turn for the creation of an insurance system similar to the bank deposit insurance system.
Second, we need to develop a set of instruments for supporting the banking system in the event of crisis situations. Russia’s banks must know what possibilities exist and in what circumstances they can be used.
Third, we need to establish a comfortable regulatory environment on the financial markets, above all through the development of corporate and tax law. In particular, we should examine the possibility of tax exemptions for revenue from the sale of securities on Russian territory. We also need to simplify the regulations governing the work of commercial banks and demands on banks’ accounting and reports, and we need to introduce favourable regulations for listing securities on the Russian stock market.
The situation with Gazprom’s shares provides a good example of how big an impact these regulatory measures can have. For a long time, there was a dual regulation system in place that was opaque for investors and prevented the market for Gazprom’s shares from developing. We then decided to introduce a common set of rules for circulation of Gazprom’s shares. Today, 49 percent of Gazprom’s shares are in free circulation and the company itself is now one of the world’s biggest public companies as a result. Gazprom’s capitalisation has increased almost 50-fold over the last seven years.
Fourth, we need to encourage the transition to payments in roubles for raw materials exports. In particular, we need to develop markets trading in the relevant commodities and revise the calculations for new contracts exclusively in roubles.
Fifth, we need to considerably expand support measures for Russian exports and investment by Russian companies abroad, and for improving the image of Russian business abroad.
I spoke about this not long ago at another forum in Krasnodar. I stress that this is one of our biggest policy priorities.
Finally, we must adjust our budget and currency resource management policy in such a way as to ensure that not only do we maintain our resources, as we have been doing quite successfully over the last years, but that they have a more tangible positive impact on the Russian economy.
The next important subject is the creation of the modern infrastructure the Russian economy requires. We have the opportunity today to create an infrastructure built on a completely new technological foundation and using the very latest developments.
I have travelled around the country a lot over these last years. Wherever I go the regional leaders, the governors and the municipal heads, all say the same thing: help us build the roads and we will take care of the rest ourselves, get production up and running and create jobs. To be honest, we have not been doing very well with our roads. I am not just talking about highways but also about the approach roads to small villages, city streets and yards. When you stop to think about it, this is also a part of territorial freedom. What we are talking about here, after all, is citizens’ mobility and how easy it is for them to get around.
In order to resolve this problem that has long been a bane of Russian life, I propose that we take the first step – a step that we have already tried and tested in many ways – of replacing the existing bureaucratic structure with a joint-stock company under state ownership that will be regulated by a law specially drafted for this purpose.
This company would act as state procurement agency and would use annually allocated budget funds and raise ‘long’ money on the markets to carry out big investment projects. It should not carry out independent economic activity. There is already a perfectly competitive market environment for this. The main function of this new company would be to coordinate the construction and exploitation of roads.
We need to develop not only the physical roads that we can travel on but also the ‘roads of the future’ – modern telecommunications.
We need to give people throughout the country the best possible access to information using rapid, round-the-clock, reliable and high quality digital technology that meets next-generation national standards.
This concerns television and radio broadcasting and the Internet, all the more so as we all know that the borders between these different media will have all but faded away over the next five-seven years. This also concerns access to education, knowledge and all the mass of information that humanity has accumulated. This concerns creating new jobs, not just in the big cities but in all towns, villages, and even at home. And this also concerns the distribution and accessibility of mass media and information of all kinds. This is, in essence, one of our biggest political tasks.
The situation in the energy sector is another big infrastructure problem. The state of our roads increases costs and reduces people’s mobility, but the problems in the electricity sector today are such that many investment projects are simply unable to go ahead.
There have already been some changes for the better. The sector received hundreds of billions of roubles in investment last year alone, mostly from private investors.
But just increasing capacity is not enough to solve the problem. We need to take serious action in the energy sector over these coming years if we want to achieve genuine modernisation and development.
This calls for a whole series of measures to ensure that it is far more profitable to build power stations and transmission lines using the most advanced technology rather than last century’s blueprints. We also need to create incentives for increasing the share of modern nuclear, hydro- and coal-powered electricity generation and modernising gas-powered generation.
Over the next two years, we need to adopt technical regulations that encourage innovation and energy conservation and introduce tough penalties for breaking environmental laws. At the same time, we need to make long-term loans available for projects that meet the strictest energy efficiency criteria. Furthermore, the state must and should take part in co-financing electricity sector projects based on the use of new technology, and at the same time must keep in mind its key task in this sector, namely, the task of building the electricity grid network.
I believe that by developing the use of advanced technology in the energy sector we will make a contribution to the world’s energy security and to resolving the climate change problems that are of such great concern to the international community today. We will unquestionably fulfil all of our international oil and gas supply commitments and we will do so not to the detriment of our own country’s needs, but by developing the use of beneficial technology and carefully looking after our natural resources.
Colleagues,
Generating and spreading new knowledge in the economy requires the corresponding infrastructure.
Russia has always abounded in inventions, but why does it take so long for us to enjoy their fruits? Why have we always been unable to use them to maximum advantage? The answer is that we never had any clearly established mechanism for commercialising inventions.
Fragmented decisions are clearly not enough to establish such mechanisms. We are talking not of individual inventions but of a system that encompasses all sectors and every aspect of our lives.
Putting in place a national innovative system is a complex undertaking but it is one of the key tasks for our economy.
We must increase support for fundamental science and at the same time improve the way scientific work is organised.
We need to carry out mega-projects in key technology development areas, concentrate resources, human resources, state attention on these projects and work in close contact with the business community so as not to miss the opportunities we have today and risk being left behind by the march of civilisation.
But while we work in these key areas we should also not forget the thousands of people who want to and know how to create new things and want their inventions not to remain on paper only but to benefit them and the whole of society.
The task here is to establish a support infrastructure that is not local in character. This is not an issue of building five technology parks, though this is also important. The system we establish must be all encompassing, reaching out to every town and village and, via the Internet, to every home.
Everyone who has the enthusiasm, aspiration and ability to come up with innovation should have access to this support system. People should have the possibility of earning not just through physical labour but also using their heads, their ability to generate ideas.
The Presidential Library has a part to play in this respect. It has been conceived as a vast information base offering free access to Russian and world knowledge in its central offices, regional and local branches and right on down to school libraries.
Colleagues,
It is clear today that at this stage in history individual behaviour, individual family lifestyles and freedom for self-expression are determining factors in successful development. To repeat the President’s words: “Investment in people is our long-term national priority”.
This is above all the responsibility of the state, of course, but not of the state alone. We need to create strong incentives for private investment in all areas of the social sphere, including through the use of active tax incentives.
Private spending on education, healthcare and pensions should be counted as deductible expenditure for profit tax purposes and should also be exempt from the consolidated social tax and personal income tax to the greatest reasonable and possible extent. I think that similar procedures could apply to companies that co-finance interest payments on their employees’ mortgage loans. We also need to draft laws aimed at creating a comfortable tax environment for philanthropic activity. We have already begun this work but we still have much to do.
Substantially increased public and private investment in social development will lay the conditions for realising citizens’ potential and developing a new society in which everyone, be they workers or students, teachers or doctors, civil servants or entrepreneurs, is motivated to create and consume goods and services of the highest and most advanced standards.
This is, in effect, a society with a new culture. It will be formed, of course, on the basis of the cultural wealth we have already accumulated and must preserve and look after in every way. But as we face a colossal flood of information, only moral and intellectual ‘filters’ can prevent the soul from losing its bearings in the midst of this enormous flow. This is something we also need to think about.
In his works describing the possibilities for the society of the future, the well-known futurologist [Alvin] Toffler warns us that dangers will not simply increase but will increase exponentially, and said that this is not a future for the weak of character.
But it is not enough just to have strong will and character. We also need equal opportunities.
I want to illustrate what it means when millions of families are left behind by economic change. Recent surveys show that the majority of the population does not understand the sense of the reforms carried out in the 1990s, and more than 70 percent of people, including young people, think that state price controls are justified.
The reasons for this situation are probably quite straightforward. Many people have not seen the benefits of economic growth and development in their own lives and do not feel as though they are living in the country with the world’s seventh biggest GDP.
Part of the population is still living in a social coma. They do not see opportunities and prospects for improving their living standards. This is one of the causes of alcoholism and a suicide rate that still remains very high. Unless we create equal opportunities for people, all declarations about innovation and the importance of economic transformation will be meaningless.
A modern economy requires a modern social development policy. The focus of social policy should not be particular sectors within the social sphere (we have already tried this approach) but each citizen, each family, and it is around these families and individuals that we must build and fashion our healthcare, education and social support systems and create wide-ranging opportunities for people’s self-fulfilment.
This is an issue we will examine soon at a meeting of the Council for the Priority National Projects. Today I just want to mention what I think are the most important directions for our work in this area.
First is education.
We need to be clear about what kind of schools we are creating, about what our future schools should look like. Will our children feel joy or fear in their teachers’ presence? Will they be forced through dull years of rote-learning or will they learn how to think? Will our schools help raise tomorrow’s good citizens or will they be indifferent to what goes on around and close their eyes to the fact that cigarette butts and even syringes litter school toilets?
It should not be a matter of indifference to us whether a child leaves school fit and healthy or plagued by chronic ailments picked up during his years in the classroom.
Our schools should see children not as an extra burden but as a source of their financial prosperity and the material well being of their staff. We want an environment where teacher training college graduates compete for places in schools. We want our schools to have not one computer per 20 pupils – the goal we worked towards over these last years and something we have announced as an achievement – but for each pupil to have personal access to electronic networks.
We need to set out clearly the rights of children in schools and the rights of their parents, the ways in which they can influence the school and take part in organising the learning process.
Of course, we also need an objective evaluation of the end product, the knowledge children take with them when they leave school. This knowledge should be assessed not only by the teachers but also by parents, by the children themselves and by independent expert institutes.
Our universities’ performance should be measured not by the number of holders of doctorates, not by the amount of lecture theatres and square metres of space, but by high teaching results and the ratings of the universities themselves.
We want a situation where the graduates of our universities and technical colleges do not have to ask for everything to be explained to them when they begin their professional lives. We want them to bring to their new jobs the latest knowledge and technology their employers need. We want them to be a step ahead of their colleagues.
We need to create the schools of the future, new technical colleges and universities with modern campuses, broad scientific, economic and academic independence. We want them to be able to find investors and build up the capital they need for their sustainable development.
All new curriculum programmes should take full consideration of students’ individual talents and interests.
We need to invite the best professors from around the world to work here and involve students and teachers in large-scale research and development work.
We also must give every teacher wanting to raise their professional qualifications to the latest modern standards the chance to do so.
The result of our work should be a system of ongoing education that is accessible for all, education that develops as an ongoing process in our people’s lives.
Colleagues,
We need a strategy for protecting and improving people’s health that everyone can understand. It should be clear to everyone what they are entitled to from the state and what they must do themselves to look after their health.
The President set the goals of dramatically increasing life expectancy and reducing the death rate. To achieve these goals we must first reduce deaths and disability caused by diseases that modern medicine already knows how to cure. We must work over these coming years to substantially reduce deaths from heart attacks, strokes, malignant tumours and road accidents, tackle infectious diseases and reduce the number of cases of disability caused by complex forms of diabetes and allergies. This is just the minimum programme we need to carry out.
This requires reorganisation of our healthcare system.
We are living under the illusion that healthcare in this country is free, but this is not the case. We collect huge amounts of taxes to fund this healthcare system and everyone is paying for their health from their own pockets.
We end up with a situation where we take money from people to pay for their healthcare but then tell them that they cannot choose their doctor, cannot choose their treatment and cannot choose what to be treated for. We assign them to a local doctor, medical centre or district hospital and tell them that, like it or not, they have to go there, have to wait their turn in the long queues, even if the service is rude and the treatment inadequate.
Our healthcare system has combined the worst elements of the Soviet system and the biggest problems of a market-based healthcare system and it offers people no alternative. This is not the fault of our doctors; this is the system that the state has established.
It is absolutely clear that the state must make it possible for people to choose their own medical centre, their own doctor and insurance company. The money the state collects from citizens in the form of taxes and fees should go to doctors only through the patients, through the provision of quality service to these patients, and not through local healthcare administration officials or on the basis of funding estimates.
The legal possibility should exist for uniting all of these different sources of money coming from state and private funds into one channel. It should not matter which medical centre a person chooses – municipal, federal, private, in his home town or in some other place – what matters is that this is his money and therefore his right to choose.
This right to choose should not be illusory. The provision of healthcare services should be a competitive environment and I think that in this respect we must not only build modern medical centres ourselves (we have begun this work and have made some success) but should also encourage private investment in this sector as much as we can. Ultimately, this is a big business with good prospects.
There should be enough state funding to ensure common standards of medical care. Doctors, healthcare organisations and insurance companies need to be responsible for the results of their work and for the effective use of resources.
Healthcare workers’ pay should also be tied to their performance. This would make it possible to substantially increase their wages, make the medical professions more prestigious and attract highly qualified people to the sector. We need to put in place the conditions for healthcare workers to continue raising their qualifications and give them greater motivation to keep acquiring new skills and knowledge.
I want each of us to realise just how important people’s health is for our country’s development. We must all become responsible for our own health and for the health of our families. We need to remember the simple truth that success in life comes only to those who live a healthy lifestyle.
Of course, comfortable housing is also an integral part of our well being. Our homes, after all, are the places where we found our families and raise our children.
We have already taken steps to build more and better housing, and we will continue working in this direction. This is a huge social and economic project and it is an important foundation for growth in the entire economy. But this is not enough. We no longer want to build homes of the standard old kind now. We no longer want to live in such homes.
Huge housing-construction plants were built during the Soviet times to produce cement panels for mass housing. At the time, this was an advanced method. Now we need to lay the foundations for industrial-scale production of individual homes that would not cost more than a city apartment. We want to give more people the possibility of buying not just housing but acquiring their own home and land. This is not an easy undertaking but it is a realistic objective.
For every citizen, having a home and land of one’s own is a form of capital, a little homeland, and the possibility of adapting and rebuilding as family circumstances change. It creates a different mentality in people which has nothing in common with the grubby building entrances we know from communal life.
Today I will outline just the main directions for our future housing policy.
First, we cannot allow a situation in which only exclusive housing is built and around it we have lifeless space in which nothing is happening. Only by carrying out big projects can we provide new residential districts with modern and convenient social and transport infrastructure and create the conditions for work and leisure, for all-round human development and comfortable family life.
Second, we need to use new construction technologies and materials to their full advantage, make the heating systems in our buildings more energy efficient and bring down high exploitation and maintenance costs.
Third, we need to continue the policies that have already proven their worth through the projects to provide housing for young higher education graduates (including in rural areas) and military servicemen. We need to solve the problem of housing provision for people on low incomes. This is an issue we have a duty to address.
These steps aim at increasing the share of people able to buy housing on the market using their own savings, mortgage loan schemes, and also taking into account state support measures, to at least 35 percent by 2012 (as opposed to 20 percent today). We want this share to increase even further in the future – to 60-70 percent – that is, have it correspond to the size of the middle class that we hope to achieve in our country.
By 2012 we also need to be close to achieving another of our stated objectives, that of building at least one square metre of housing per person a year.
I would like to conclude this not so brief speech by summing up the main points of my address.
While continuing work on the projects begun two or three years ago, we need to concentrate over the next four years on four main areas, the four ‘I’s: institutions, infrastructure, innovation and investment.
We have the following tasks in these areas.
First, overcome legal nihilism. We need to focus particularly on the quality of our laws and how effectively they are enforced.
Second, drastically reduce administrative barriers.
Third, reduce the tax burden in order to encourage innovation and private investment in human capital.
Fourth, build a strong and independent financial system that will eventually become one of the pillars of financial stability in the world, and turn the rouble into a regional reserve currency.
Fifth, modernise transport and energy infrastructure and create the new telecommunications infrastructure of the future.
Sixth, form the foundations of a national innovative system.
Seventh, carry out a social development programme in our country.
Colleagues,
It has often been the case in our history that no sooner has our country begun to spread its wings than we have been irresponsibly catapulted into armed conflict or had revolution come tumbling down on our heads. But we have learned something from history, namely, that we cannot be indifferent to our future and that stable and consistent development is absolutely vital for us today.
But stability does not mean relaxing and doing nothing while the petrodollars rain down. We have accumulated such potential for development today that it would be stupid and immoral not to make use of it, not to seize this opportunity for economic growth, technological modernisation, raising our people’s living standards and creating a society that is genuinely able to withstand outside upheavals. We have everything we need for this, and above all, we have our greatest treasure – our people.
A few words in conclusion: “We must finally gain the right and the strength to take charge of our own present and decide our policies in culture, in the economy and in state law. We answer before time and we cannot place all of the responsibility on our rightfully esteemed and respected forebears. We are free and we are therefore responsible”. These words belong to Academician [Dmitry] Likhachev and I fully agree with them.
Thank you for your attention.
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