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Russian prime minister briefs State Duma on Cabinet’s first year in office

April 17, 2013, 16:24 UTC+3 Alexandrova Lyudmila

Russian Prime Minister Dmitry Medvedev on Wednesday briefed the State Duma on his government’s first year in office. Contrary to many mass media expectations the legislators’ questions were not very sharp, although Medvedev himself had said in advance that he was prepared for them. The discussion between the head of the Cabinet and the lawmakers looked calm and constructive. Many of the Opposition’s proposals met with the prime minister’s approval and were taken into consideration.

The executive bodies of power in general did come under the fire of criticism, of course - mostly from the leaders of oppositional parties.

Medvedev began his report with a review of the current economic situation in Russia. Also, he compared the macroeconomic parameters with the general world level.

“We had anticipated a slowdown in the development growth rates in the context of the situation on the world markets… We talked about that with the president the day before yesterday. We discussed measures to speed up economic development,” Medvedev said. “The government has its own vision of what is to be done. But these measures should be discussed in detail with the experts and the legislators.”

Medvedev said that in many industrialized countries the economic situation was far more grave. The problems facing Russia just reflect the general world trend. “The first months of this year indicate that the slowdown of economic growth is a world tendency and that that tendency is continuing. There are some major risks involved here,” he said.

The prime minister believes that the situation in the Russian economy is not bad at all. The GDP in 2012 grew by 3.4 percent, and the real wages throughout 2012 were higher than in 2011 (their growth rate went up from 2.8 percent to 8.4 percent in 2012). Medvedev pointed to an unprecedentedly low level of unemployment - 5.5 percent (against 6.5 percent in 2011) Consumer inflation in 2012 was at 6.6 percent - slightly above the previous index (by 0.5 percentage points).

“Poor harvest and other factors are to blame,” Medvedev said.

The federal budget was executed with a slight deficit of 0.06 percent of the GDP, in contrast to many industrialized countries.

He said the share of oil and gas incomes grew by 0.2 percent (to 10.3 percent). In the meantime, the share of non-oil-and-gas incomes remained at last year’s level of 10.3 percent of the GDP.

The leaders of regions must deal with the problem of supporting Russian export more tightly, Medvedev said.

“By the level of government support for our exporters we are still way behind other countries. We can learn a great deal from our neighbors. The situation must be changed in the cardinal way,” he said. Medvedev recalled that the government’s guidelines set a task increasing government support by 2018 to a level of no less than 13 percent of Russian non-energy exports (in 2011, 0.5 percent).

This year 130 billion rubles was earmarked for financing agriculture, and another 42 billion rubles, to support livestock farming, Medvedev said.

“There will surely be proper financing,” he said to have added that agriculture would enjoy outpacing financing for years to come.

This year more than 130 billion rubles will be spent for this purpose. I have made a decision to spend an extra 42 billion on livestock farming, on the refunding of loans and on technological modernization, Medvedev said.

He recalled that after Russia joined the WTO, the system of government support for agriculture in the country was re-adjusted in line with the requirements of that organization.

Medvedev promised that the pension retirement age in Russia would not be raised. Earlier, the economists and some government members raised the question of increasing the retirement age in view of the demographic situation in the country and the Pension Fund’s deficit.

Russia’s transition to a new pension calculation formula will not infringe on the rights of citizens, he said. Medvedev recalled that after a long and detailed discussion by the public and experts the Cabinet of Ministers approved of a long-term pension system development strategy extending will 2030 and formulated new approaches to forming and calculating the employer’s retirement pension. Medvedev said the employees would find it more beneficial to keep working after the retirement age, and the mechanisms of indexing pensions would stay in place.

Struggle against corruption must be held at all levels, “from the president to the government, the parliament and the municipalities and the individual territories.”

“True, this struggle will require consistency, fundamental efforts and time, of course,” he added.

Medvedev dwelt on the problems of education, in particular, in the context of criticism by the Opposition and some members of the ruling party against Education Minister Dmitry Livanov. The Communist Party of the Russian Federation, which spearheads the attack against Livanov, has begun to collect signatures in support of its demand for Livanov’s dismissal.

Russian children’s successful performance at international scientific Olympiads show that Russia has good secondary school education, he said. But at the same time there have accrued certain problems, he acknowledged, only to remark at once that some of them had emerged not over the past decade.

Medvedev described in favorable terms the new law on education, for which the education minister was strongly criticized.

When the legislators started asking questions, the issue of the education minister’s future was brought up again. Medvedev disagreed with the demand for dismissing Livanov from the post.

“You don’t really expect me to agree with this, do you?” Medvedev replied to a very harsh question from a Liberal Democratic party member.

Medvedev said “some posts in the government make those holding them feel like convicts in front of a firing squad.”

“Among them one finds the position of education minister and of the health minister, too,” Medvedev said. “But a minister who is liked by all is someone who most probably does a poor job.”

Also, Medvedev answered legislators’ other questions.

In particular, a Communist Duma member highlighted the need for ending the Russian economy’s dependence on off-shores in the wake of the Cyprus crisis.

Medvedev suggested “waving good-bye” to Cyprus and creating incentives that would persuade Russian people to keep savings at home.

He believes that “one should be grateful to the European Union for what it has done to Cyprus, because they gave the worst example of how to go about confiscation policies.”

“That’s convincing explanation to very many people why savings should be kept at home,” Medvedev said in reply to a question from a Communist MP.

Medvedev pointed out that the Cyprus crisis had not harmed either private of public companies.

“I have held special meetings devoted to this theme. We have sustained no losses. I mean, public structures and a considerable number of private companies,” Medvedev said.

“We should thank our EU partners for what they have done to Cyprus. They have shown the worst example of how to go about the business of conducting a confiscation policy… We can wave good-bye to Cyprus and learn lessons from that,” he said, adding that now far fewer Russians would be eager to keep cash in Cyprus.