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Putin: nation-wide tasks cannot be solved without project approach

July 13, 2016, 15:27 UTC+3

Russian President has named the challenges of the Strategic Development and Priority Projects Council

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© Mikhail Metzel/TASS

MOSCOW, July 13. /TASS/. Russian President Vladimir Putin has stressed the importance of project approach in solving the current tasks the country is facing. 

"We have to work now in conditions of known serious restrictions. Certainly, we cannot solve tasks the country is facing without this project approach, and we need to rely on what we have earlier and address the current situation and the best work administration practices," Putin said on Wednesday at the first meeting of the Strategic Development and Priority Projects Council..

According to the president, the situation is more challenging and fundamentally different from the one Russia faced in the 2000s when the first national projects were initiated.

"I’d like to stress projects should not be viewed as requests for utilization of budget funds," Putin stressed.

"Regarding each project it is necessary to make it clear what will be done already by 2018 and simultaneously establish a mid-term trajectory, outline the targets, which needs to be met by 2020 and 2025," he underscored.

According to Putin, this "does not mean that the targets set earlier should be neglected" though "adjustments are obviously needed."

We do not need revolutions

The Russian leader has however ruled out radical change in the existing governance system.

"Application of the project approach does not mean the existing governance system requires immediate and profound changes. We do not need revolutions in this sphere. Everything should be done in a balanced fashion, working out each step so that not to do harm," Putin said.

According to the president, advance management technologies should be implemented and best practices should be replicated within the framework of solving specific tasks. 

"The most important [task] is to improve the efficiency of managing branches, the economy on the whole and resources," the president pointed out.

Efficiency improvement is the key task, Putin said. "The point is to catch up the best governance practices of sectors, the economy on the whole and social sphere," he added.

No odd expenses

The head of state has also emphasized that Russia's priority national development projects should be budgeted without odd expenditures.

"All the expenses should be clearly traced and estimated and admittedly inefficient costs should be excluded," Putin said.

"National development projects should be provided with financial resources when drafting the federal budget for 2017 and for 2018-2019," he noted. "Otherwise all that will be boiled down to idle talk and wishful thinking."

"This should be done as a matter of priority but without crossing budget balance limits," the president added.

Trade union representatives should join the Council on Strategic Development and Priority Projects

Putin has suggested that trade union representatives should join the Council on Strategic Development and Priority Projects.

"I’ve seen that the Council has no representatives of trade unions. We have to contact the FNPR [Federation of Independent Trade Unions of Russia - TASS]. It is necessary for leaders to be present here if they are interested. We’re going to discuss issues directly impacting people’s life and trade unions have to be engaged," he said.

Lowering interest rates on mortgage loans

Commenting on the report of the Construction Minister Mikhail Men, the president stressed that lLowering the key rate of Russia’s Central Bank should not be the only condition for the reduction of mortgage rates.

"The reduction of the key rate of the Central Bank is not the only condition for lowering interest rates on mortgage loans. Let’s have it in mind, this is not a cure-all solution," Putin said.

In his report the minister stated that formation of market of mortgage-backed securities guaranteed by the Agency for Housing Mortgage Lending in combination with a gradual reduction of the Central Bank’s key rate would make mortgage more accessible for people and boost demand for new housing.

Earlier, the minister said that the reduction of the Central Bank’s key rate to 8.5% would help the government complete the state program for mortgage rate subsidizing to 12% (the program was launched in March 2015) because market rates will be acceptable for the population.

On June 10, the Central Bank lowered the key rate by 0.5 percentage points to 10.5%. The regulator lowered the key rate for the first time since August 2015.

The next meeting of the Central Bank’s Board of Directors on the key rate is scheduled for July 29, 2016.

Council on Strategic Development and Priority Projects

Vladimir Putin announced establishment of the Council at the St. Petersburg International Economic Forum on June 17. The Council will deal with key projects aimed at structural changes in the economy and social sphere and at raising economic growth rates, President said.

As TASS reported earlier the Council will focus on 11 priority areas: healthcare, education, mortgage lending and rented housing, utilities and improvement of urban environment, labor productivity increase, high quality and safe roads, export support, small and medium enterprises support, environment and single-industry towns, and control and supervision activity. The plan is to present 3-4 key problems within each of these areas at the Council meeting, which shall be resolved in midterm.

The Council Presidium chaired by the Prime Minister will meet monthly and the Council headed by the President will hold meetings once per quarter.

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