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Putin stresses importance of competition for solving Russia’s current tasks

Russian economy is facing formidable challenges now, according to Putin

MOSCOW, April 5. /TASS/. President Vladimir Putin called on all levels of the government to take measures to increase competition.

On Thursday the president is chairing the first meeting of the State Council after the presidential elections.

"You know how formidable the challenges are our country is facing now. Their solutions require involvement of everyone - civil society, business and the government, and, of course, the efforts of all the regions of Russia," Putin said.

He noted that the topic of the meeting is the development of competition in the country - "this is one of the key areas of our work." "Without solving problems in this area, we will not achieve anything," the president stressed.

Putin stressed that "the fundamental importance of competition is stipulated by the Russian Constitution. According to him, "this is one of the main lines for achieving the goals that were mentioned in the address [of the President to the Federal Assembly]."

The Russian leader underscored that "fair competition" is a basic condition for economic and technological development and a guarantee of the country's renewal and a dynamic advancement in all areas of life."

Putin also noted importance of the business community’s contribution into economic development. "Fair work is needed; one should not be a time server," the president said.

"There is a need to look for and find the balance, provide exactly fair and equal competition," the head of state said. "I am confident that work will be enough for everybody under skillful management approaches. It is critically important for breakthrough development of the nation to support economic liberties and the high level of competition," Putin said. "This is highly dependent on all government tiers of the state but the business is also playing a definitely major role in development of the business climate, the business culture, and the fair competition practice," he added.

"It is clear that profit is the top priority for the business but it should not be achieved by all manner of means," Putin said.

The right to work in critical economic spheres should not be provided to companies without any proper consideration even for the sake of competition development, the president noted. "Where essential services are the case in point, one should take into consideration, what companies [work in these spheres]," Putin added.

Violation of competition legislation

Violation of competition legislation leads to great damages to the economy, according to Putin.

Russia has "many cases of direct flouting the law, especially on the part of local authorities," the head of state said. "Violations of antimonopoly laws by federal executive authorities accounted for 1.2% in 2017, while 98.8% of violations were made by regional and municipal authorities," Putin noted.

"Damages for the national economy are great indeed," the president said.

Legal regulation of competition in Russia "is generally in line with international standards," Putin noted. Four packages of antimonopoly laws were approved in recent years, he said. "The most important is to ensure their proper enforcement practice," the president added.

Tougher punishment for violating antitrust laws

Putin believes that the punishment for violating the antimonopoly legislation should be as stringent as possible.

"As for tightening of the antimonopoly legislation: we all know, at least, those who dealt with it, how they worked on antimonopoly legislation in those countries that are now regarded as developed market economies. A more severe punishment than for violation of the antimonopoly law can be only for treason and for murder," Putin said.

President noted that honest companies suffer losses from unfair competition.

Speaking of cartel agreements, Putin noted that they usually do not happen by themselves and often involve not only business entities, but also public authorities.

"This is a merger of business and the state in the bad sense of the word, the one we must fight," he concluded.

Regional protectionism 

Putin harshly criticized Russian regions for their protectionism, saying that this contradicts the principle of a single economic space of the country.

"In 2015, the regions started implementing the Competition Development Standard approved by the government. For a number of regions this became a real incentive to support competition, which is true, we see it. But in general the situation has not changed for the better," he said.

Speaking about the trend towards the development of regional protectionism, Putin noted that he understands the desire of the regions to create special conditions for local producers, to simplify their access to the market.

"Local producer means Russian producer, which is extremely important, but now we observe regional protectionism even our most advanced regions, which is absolutely unacceptable, "the Russian leader said.

Putin agreed that in order to support business local administrations can and should use regional mechanisms.

"However, it is one thing when benefits are equally accessible to everyone, and it is another, when they deliberately create discriminatory restrictions for entrepreneurs from other regions, or ban import of goods," Putin said.

The Russian leader stressed that this approach directly contradicts the principle of the unity of the country's economic space. In his opinion, such "greenhouse conditions for locals distort the competitive environment." In general, the companies that grew on artificial advantages over time will lose their effectiveness and offer low-quality goods and services, Putin said.