Dmitry Kozak: Dear colleagues, do you want to ask Vladimir Vladimirovich any questions? Go ahead.

Tamara Karyakina: Tamara Karyakina, employment agency.

Vladimir Vladimirovich, greetings from the Tverskaya Oblast.

Vladimir Putin: Thank you.

Tamara Karyakina: We're near Moscow here, and we even say "Tver is the door to Moscow". And it so happened that young people found out some time ago that this door is opening. But the Oblast is getting old. Our demography is such that the Oblast is grandmothers on pensions. So it is particularly obvious to us who important and timely efforts to increase pensions are, and how important any positive factor is in improving the medical service of elderly people. We need to do this, this is clear.

So in connection with this, I have the following question to you: how do you personally estimate the human potential of a generation that is already leaving us, the older generation, in comparison with the potential of the current generation? Don't you think that they are not of the same calibre?

Vladimir Putin: Firstly I will talk about preserving villages and small towns. I do not think that we will solve this task merely by increasing pensions and benefits. We need to develop agriculture production, develop the social sphere of the countryside, and we talked about this recently on a visit. We need to increase the income of the population in the countryside. And this is a separate topic. I think that sufficient attention has been given to it recently. We will also pay as much attention to it in future.

As for comparing generations, I can say that this is a philosophical question: some believe the previous generation is better, some believe it is worse. In my opinion, changes take place very slowly. Over a millennium, mankind has not changed a great deal. Living conditions change. And in new conditions people show themselves differently, in a way that older generations could not show themselves, because they lived in completely different circumstances. But I am absolutely certain: the most important thing we have is our national character. I am absolutely certain that in this sense the younger generation does not lag behind the elder generation.

But in order to show this, we should do everything to make sure that the older generation feels comfortable in our country. Because we will continue to increase efforts on improving the pension system, and create conditions that increase the prosperity of people who gave the country the best years of their lives, and did everything to help the country to its feet after different periods of its difficult history. I see this as one of the primary tasks for all levels of power, including a task for the President.

Lidiya Vasileva: Vladimir Vladimirovich, I am Lidiya Vasileva from Astrakhan, and I am the head of the sturgeon-breeding institute.

We in the fishing industry are very concerned about the very difficult state of the industry. Over the last ten years, the industry headquarters has been reorganised four times. The head of our committee has changed ten times. During your presidency, we expected that order would be brought to the committee. But over this period, the head of our committee also changed four times. Non-professional people come to head the industry, people who do not know the industry, and who run it incompetently. We are, quite frankly, in despair.

The last step concerns us especially. Currently there is discussion about privatising scientific research centres of the fishing industry. I believe that putting functions into private ownership that should be decided by the government will destroy the fishing industry once and for all.

I have not heard much in your speeches about the fishing industry. I would very much like for you to give this industry some attention, especially at this difficult time.

Thank you.

Vladimir Putin.: Thank you for your question.

Naturally, the fishing industry primarily concerns the people who work there, which explains the reaction among the audience. At the same time I would like to tell all colleagues gathered here today that this is a very serious problem. It has national significance, because there is an enormous amount of money involved, and the results, if there are any, affect the realities of our lives, and the lives of ordinary citizens. If there are no results, this is also very noticeable. And Lidiya Mikhailovna put the question absolutely correctly.

It is one of the problem that has not been solved yet. There is constant reshuffling of staff, and the Government has not been able to fundamentally regulate these problems in the way that this could and should have been done from the very beginning. I hope that the last decision on redistributing quotas and so on will somehow change the situation and increase the role of the regions in solving these issues. And this is a case where bare formulas cannot be applied. We need to look at the realities of our lives, the realities of the lives of the people whose existence depends on the industry functioning. But as for privatising scientific institutes, I must say quite frankly that I have not heard anything about this yet. I will pay attention to it.

But you probably also know that so-called scientific quotas on catching fish have long since turned into commercial quotas. And if this science only means that people involved in it fill their pockets, then we do not need state institutes like this.

But they conduct real scientific activity, this is another matter. But in any case, the Government should establish order here. I agree with this absolutely.

A. Aksyonova: Vladimir Vladimirovich, I represent Vladimir and Suzdal. You have visited us many times.

Vladimir Putin: Hello. I remember.

A. Aksyonova: Vladimir Vladimirovich, could you say a few words about your view on the problems of culture. There are many problems.

Vladimir Putin: Culture is just like air: it is the foundation of our lives, it is what the entire edifice of our statehood is built on. As I have said many times before, we have a state composed of many different ethnicities and religions, we have a unique cultural wealth. I would have difficult finding another country which has the cultural wealth that we possess. So here the first thing that we need to do is to preserve everything that we have, to preserve this wealth, this language and cultural heritage, and of course to increase it. Here we need to take a very careful approach to all the processes going on in this sphere. There are profitable spheres and there, of course, market relations need to be developed and encouraged. But as a rule, the sphere of culture requires particularly attentive treatment from the state, and support from the state. The funds required to solve these tasks will be allocated in the state budget, and they will be increased.

Colonel Nikolai Belyaev, Paratrooper forces:

Vladimir Vladimirovich, in your speech you mentioned the break-up, the collapse of the Soviet Union. What is your personal attitude to this problem? And you do believe that it is possible to create a state of this nature in the future?

Thank you.

Vladimir Putin: Nikolai Alexandrovich, it is my firm belief that the collapse of the Soviet Union is a national tragedy of enormous proportions.

I think that ordinary citizens of the former Soviet Union and citizens of the post-Soviet area, the CIS countries, ordinary citizens, did not gain anything from this - on the contrary, people faced an enormous number of problems.

As for cultural diversity, issues of language and history, and this is what our colleague actually asked just now, they could have been solved on a new foundation and within the framework of a single state, but things happened differently. There now exists the situation that we have at the moment.

Incidentally, at this period of time there were also different opinions and points of view, including among different heads of Union republics. For example, Nursultan Nazarbaev was categorically opposed to the dissolution of the Soviet Union, and talked about this directly, proposing different forms of maintaining the state in common borders. But I repeat, this is in the past. Today we need to look at the realities in which we live. We cannot just turn back and complain about this problem - we need to look ahead.

There are also certain pluses in the situation that we are in. I think that mainly the so-called elites and the nationalistically-minded section in these republic gained from this demarcation. But this did take place, it is recognised by the peoples of these countries, recognised by the international community and the Russian Federation itself. They are independent, fully independent states, and they need to be treated with respect. Respect means acknowledging their legal interests. And on this foundation, there are also plusses for us. The plusses are that Russia should stop being a "milk cow" for everyone.

And, meeting the requirement to treat all our partners with respect, taking into account their interests, we have the right to ask for the same treatment from them, for them to take our interests into account, and for new relations to be built on this basis. The question is whether we can do this effectively or not, and I am simply that we can. We have everything for this - we have something that does not exist in other regions of the world where integration processes are underway. They are taking place very actively in almost all regions of the world. We have Europe next to us, and we see what is happening there, but the same thing is happening in Latin America, and in Asia, everywhere in fact. Unlike other regions of the world, if we take the post-Soviet area, there are clear advantage - we have a language with which different nationalities can communicate, Russian, which everyone speaks.

We have a similar mentality, we have a common history, there are connections between our economies, production and personal ties simply at a genetic level, there are many mixed marriages and so on. This is a magnificent foundation to build new relations for integration, which will undoubtedly benefit both Russia and our partners in the CIS. Our partners have an understanding of this process, and the importance of this process. I hope that we can realise these plans.

Vladimir Kalashnikov, Tyumen Oblast:

Vladimir Vladimirovich, you have not been able to do everything that you planned in four years.

Vladimir Putin: If you help, we will do it.

Vladimir Kalashnikov: The Presidential term must be extended to seven years.

Thank you.

Vladimir Putin: I have already answered these questions, and I would like to confirm my position once more. Of course, this is an attempt to achieve a certain stability, but this stability may turn into stagnation. Arguments can always be found to increase the term of power indefinitely for one head or another, for one leader or another. Of course, perhaps five years would be fine, it is a rounder figure. But I think that seven is far too much.

If the Russian head of state performs all the obligations that he should, then taking into account the enormous number of problems that have accumulated, he must give his all to this work. If you work for seven years like this, you can go mad, you know.

There is also another component to this problem. You know, I have also thought about this, and it means that we want to achieve stability by breaking the Main law of the state - the Constitution. As soon as we start altering the Constitution, this is already the path to an unstable situation. We only have to start, and then we won't be able to stop. So it is better not to touch the Main law of the state, and to work within the framework which the people who worked on this law established.

Four years is not a long term, but it is not a short one either. Two terms of four years, if the President has done his work properly, people will understand this and appreciate it. This will be eight years. And then the task of any leader - especially of this rank - is to offer society a person whom he considers to be worthy of working in this position in future. If people agree, then they will support this. And this will be a continuation of what is being done now. But in this case, even if this person is worthy and experienced, he is still a different person, and with him come new people, new ideas, and new approaches to solving the problems that the country faces. This is always a plus.

Akhurbek Magometov, dean of the North Ossetian State University, head of the Presidential candidate staff:

Vladimir Vladimirovich, you have visited our university, and you liked it. God willing, you will visit again.

Vladimir Putin: Thank you.

Akhurbek Magometov: I have a question which probably concerns many deans, it is a question about branches of central universities and other departments on the periphery.

Currently, there are small towns in the North Caucasus, 25-50 branches of central universities. We are not scared of competition. We have a constantly high entrance requirement, and a normal competitive situation. But the problem is that these branches hinder our work, hinder the work of professors and teachers, whom they "tear into pieces" - in other words, teachers who work at university, for example, have no time for education work, no time for scholarly work and often not even for a normal family life.

Can something be done about this in legislation, or can the Ministry be given some powers on this issue? For example, the council of deans, and I as the head of the Council of deans - we will not give our agreement. We will make a well-argued, objective decision at a council meeting that we do not need this branch, because these specialists are present in one university, in a second, third or fourth - but nevertheless, a certain amount of time goes by and another sign appears: a branch of one central university or another.

Thank you.

From the audience: Have you tried raising wages?

Vladimir Putin: The issue of raising wages and competition in this labour market is certainly a part of this whole problem. But in general, as I already mentioned in my speech, we have all manner of universities and institutes sprouting up out of nowhere and the quality of education they offer is low. What you spoke of, this idea of universities opening branches, in some cases it is justified and in other cases not. Also, as I mentioned regarding graduates, the vast majority do not end up working in the area they trained for and it is not at all clear just what they end up doing.

This is a sector that demands particular attention from the state. This does not mean that the state should turn the pressure up on everything and everyone, but it does mean that some order should be brought to the system. I discussed this just recently at a meeting with the Presidential Council on Science at one of the academic institutes. There are some ideas and proposals about what we can do to develop the education system in general. I agree that the state and the government should pay increased attention to this sector. In general, the government should have a clear and full picture of the geographical distribution and number of higher educational establishments and the numbers of students being trained for this or that area. In this I agree with you completely.

Andrei Klebeshev, rector of Kaliningrad State University:

I would like to ask a question that is not related to education. Among Russians, the people of Kaliningrad Oblast probably feel most keenly how close the links can be between resolving our domestic problems and dealing with foreign policy issues, including the positions taken by the most developed Western countries. This is where my question lies. Do you think that our allies or partners today - the United States, Britain, France - are generally helping us to follow the course you have spoken about, or are they hindering us? There's the impression that many people do not trust us or do not want to trust and help us.

Thank you.

Vladimir Putin: And why should they help us? Are we so helpless ourselves?

I have already spoken about this matter. Yes, there are forces in this world that continue to live according to Cold War stereotypes. I must say that I sense this and see it, and you have clearly got the same impression. This question has not come up just by chance, and I can feel this in practical work. There are indeed powerful forces that are still freezing away in the Cold War past and still see us as their geopolitical opponents. But let's also remember the popular saying about how we can see the mote in our neighbour's eye but not the beam in our own. We also have people of widely different opinions, after all, and various political forces, some of which share extremist views and publicly voice these views at a high level, including on international issues. So I would not slap the same label on everyone because there are all kinds of people and approaches. We must look for allies in the civilised countries. We must melt the ice of distrust that built up over the 80 years of confrontation between the Soviet Union and the rest of the world. We need to be patient and act with thought and care and not allow those who would seek to sow divide between us and the rest of the world - and there are such people - to pursue their plans and provoke us into doing something. Throughout the world there are positively-minded forces, in Europe, in North America, in the United States, and they are the majority and they are our partners. These are the political forces that we will seek to work with in these countries. And our aim is to make Russia a full-fledged and equal member of today's international community.

We have already taken a good number of steps in this direction, but of course, we must also always ensure that we keep sight of our own interests. This does not mean that we should empty our pockets and scatter everything to the wind. No, we must be consistent in our actions, persevering and think through carefully all our undertakings in this area. I am sure that this kind of restrained approach will ultimately lead to positive development and that we will achieve our goals.

Dmitry Kozak: Are there any more questions?

K.G. Achmiz, campaign supporter, Republic of Adygeya

We liked the economic part of your platform. Russia is a federal state and it has regions that contribute to the budget and regions that are subsidised by the budget. What prospects are there for building a new system of inter-budgetary relations and how do you see this system? Can it really be that the regions that currently depend on budget subsidies will continue to do so during your next term in office?

Thank you.

Vladimir Putin: The system of inter-budgetary relations should be built in such a way as to encourage the regions that currently depend on budget subsidies to develop their local economies. The coming years will show us whether or not this policy proves successful. But at the same time, we realise that these regions still need federal support for now and this support must be given. What I would say here is that over the past years I have discussed this subject often with my colleagues, with the regional leaders. The so-called donor regions always say, why should we have to pay the whole time, why should we keep handing over our money? They say that a golden mean should be found. Of course, it would be a bad thing to simply keep taking money from the donor regions and to create no incentives and do nothing to encourage other regions to develop their territories. But what we should also recognise is that these donor regions built up their wealth and their industry through the efforts made by the entire country, including by people now living in territories that today need support. And so the only way to redistribute these resources is through the federal budget.

The problem we have encountered over recent years is that the rights and obligations of the various levels of power - municipal, regional and federal - are not regulated. The municipal authorities have found themselves facing a whole mountain of responsibilities without having the financial resources to back them up. The big package of legislation, part of which has already been approved by the Duma and part of which is still being worked on (other laws need to be passed confirming the financial powers of the different levels of power) aims at making the municipalities, regions and federal centre self-sufficient. This is one of the key issues that we must resolve in the nearest future.

Dmitry Kozak: Are there any other questions? Unfortunately there is time now for only two more questions.

Svetlana Khorkina, twice Olympic gymnastics champion:

Could you say please what you think the Russian Olympics team should do to be at the top of the medals table in the upcoming Olympics in Athens?

Vladimir Putin: Win like you know how to do. I saw the last competitions and saw your brilliant performance. I want to congratulate you on your excellent performances and I hope that our other athletes will also show some mettle and show us what they are capable of. And the Sports Committee, the government and I will do everything we can to ensure the team gets the preparation it needs. We wish you success.

Question: Vladimir Vladimirovich, what is your vision of Russia's national idea and national mission in the twenty-first century?

Vladimir Putin: I already spoke about this. This is the kind of subject that can get discussed endlessly. You know, it is my firm belief that we face a very important challenge at this time. Various countries and regions are developing very actively. If we just spend all our time talking about our centuries of history and how much natural resource wealth we have and how clever we are, and if we just sit on our laurels, then we will never get anywhere at all. We must strive to become competitive in every area. Our people must be competitive, our cities, our villages, our industrial sectors and our entire country. That is our main national idea today.

Vladimir Putin: Go ahead, please.

N.F. Korolchenko: I am a village schoolteacher and director of a school in the Moscow Oblast. You visited our school and what was most important for us and very clear for us was that you very much love children, and we know that you have two daughters of your own.

Vladimir Vladimirovich, when will the conditions in our country become such that people will not be afraid to have three or four children? After all, more than anything else, children are the future of our Motherland.

Vladimir Putin: Of course. This is also a problem, the problem of our natural population decline. There are many reasons for this decline. For a start, there is the Great Patriotic War, the consequences of which are still being felt to this day, then there are also the problems of the early 1990s that are still making themselves felt. There is also the concept of the "planning horizon," something that can be applied to people, the country as a whole or a given region or city. This planning horizon broadens as people start to perceive their environment as more or less stable. People can then start planning for the longer term and set projects for themselves and their families. This is not the only factor, but it is an important factor. Of course, we cannot follow the path taken by some other countries. Some countries, for example, have a very high birth rate. This is said to be linked to the absence of a pension system. Some countries have no pension system at all, and so having a lot of children is one way to ensure that you will have someone to look after you later and have a more or less decent old age. In these countries there never was a pension system. But we cannot return to such a state of affairs and we would never let this happen. We have a different society, a different country, and we have to find more modern ways of encouraging a higher birth rate. I must say that the main ways to do this are to ensure political and economic stability and to pursue carefully planned economic development policies.

It was not for nothing that I said that we need a frank and open dialogue between society and the authorities because we need to make certain decisions in order to become effective and competitive. We need to recognise and say honestly that such and such is not effective and needs to be abolished and replaced with something else, because we have calculated what the consequences will be.

We need to get away from the old stereotypes that we were used to living with under the planned economy system. Though they seem attractive at first glance, they are totally ineffective in the modern economy and the modern world. This is what we need to understand and explain, and we need to make the right decisions and take them through to their conclusion. Then people will see that the upheavals are over and that even if life is still difficult and complicated, at least it will have become clearer and people will know that the end is in sight and what it will bring. If a clear and understandable forecast is made and sustainable development of the sort we have had over the last four years continues (and we must recognise that the GDP and the economy have grown considerably over this time), if this all continues and if we manage to go even further, then I am sure that this will have a positive impact on the birth rate.

Let's take a few more questions, as there are still people waiting their turn. Please.

Sergei Zaitsev, Mashinostroyeniye Production Association, director of the united space vessel directorate:

Vladimir Vladimirovich, Russia's security today depends a lot on having a nuclear shield. We all know how much effort, knowledge and skills were put into creating this shield. Today we have a world in which lawlessness is increasing and regional conflicts are breaking out. Could you say, please, are you paying enough attention to ensuring that no one ever dares raise their hand against us?

Vladimir Putin: This is a key issue for our security. And I must say that it is an issue of concern to us, of course, but strange though it may seem, it is also of concern to others.

During the Soviet years, the very existence of the Soviet Union and its might, above all the might of its nuclear forces, was a major stabilising element in the balance of forces in the world. Today the situation is radically different. But in the military-strategic area this balance remains in place to a certain extent, thanks to the Russian Federation's developed and powerful nuclear deterrent force.

I am absolutely convinced that we should not behave in such a way as to make the rest of the world fear us. This is why our actions both within the country and on the international stage should be understandable and predictable. As I said in response to other questions, we must become a part of the modern and civilised world so that it comes to see our military might as part of the global security system. But this also means that we should maintain this potential we have and this we will most definitely do.

We have plans for developing the Armed Forces over the coming decade. Every year the decisions made as part of this decade-long programme face a serious test when we set the parameters and make decisions regarding the current budget and budget for the following year, but these are issues that do and will have the constant attention of the country's political leadership.

The upcoming nuclear deterrent forces training exercise is confirmation of this. Exercises such as these, which are set to begin soon and will also involve other branches of the Armed Forces, were not held for a long time because there were no available financial resources and insufficient preparation for such large-scale military events. Now they will begin very soon and we will continue to hold such exercises to help develop all the different branches of the Armed Forces, including the nuclear deterrent forces.

Please.

Dmitry Kozak: The last two questions, colleagues. For there is such a thing as the president's schedule. Please?

Leonid Roshal: Vladimir Vladimirovich, maybe you can stay a bit longer, for there may be more questions. This is a highly interesting conversation. I have always said I love such conversations, when you look each other in the eye.

Vladimir Putin: Thank you very much, I love them, too.

Leonid Roshal: I know that today's meeting is special, as the people have waited a long time for it. In fact, it is the first of its kind. And it would be wrong not to say anything about healthcare. What is your vision of the future of the Russian healthcare? Everyone knows that it is in the worst condition ever: only 30% of doctors work in the countryside and outpatient clinics have only half of the doctors they need. We are extremely short of personnel but we are also short of funds for developing healthcare in rural areas. Surveys show that people complain above all about the present form of healthcare.

As for the medical staff, though some leave for commercial organisations, the core keeps working. And here is one more question in this connection. What do you think about transferring teachers and doctors to the ranks of civil servants? Thank you.

Vladimir Putin: Leonid Mikhailovich, this is one of the vital questions and I have touched upon it, but only in passing. I think that the healthcare system that was created in Soviet times - I closely followed discussions on this issue, including those which you attended, and I fully agree with you - was one of the best in the world; this is a fact. And we must do everything possible to preserve certain key elements of that system, since everyone uses it. It is an accessible system. If we recall that nearly 30 million people in Russia still live below the poverty line, we will have to admit that chargeable medical services will be inaccessible to very many people for a long time to come. This is why the state must do its best to preserve the key elements of the old system.

At the same time, and I have spoken about it before, it cannot operate in market conditions, in its previous form. To make everything operate as before, we will have to push the country back in time. But this is impossible. So, we should adjust our healthcare system, as well as the system of education, to new conditions in the areas where they come into contact with the market - which is almost everywhere. There can be several ways of doing this, including by organising medical practices in a specific manner, and so on. We should develop the system of chargeable services but accurately. And of course, at this stage we should increase direct budgetary allocations to this form of activity. Though I would like our medical establishments, as I have repeatedly said, to be paid not for merely existing in a city or village, but for the quality and quantity of services they provide - this may be the solution to the problem, as I see it.

As for teachers, we recently took a decision - and it came into force on January 1 this year - to raise several aspects of this problem concerned with salaries and technical equipment of schools to the state level, the regional level. It was the first step. We will watch how the decision is applied and draw conclusions requisite for taking further decisions.

Dmitry Kozak: Just one more question, colleagues, one more question, please.

Vladimir Putin: Speak into the microphone, please.

Question: A system has been created in the country in the past four years that is conducive to tackling agricultural problems that had not been solved for decades. In my region alone, a thousand combine harvesters have been delivered under the federal lease system; 25% of our machinery pool has been renewed.

Here is my question: Firstly, will assistance to agriculture grow commensurately with the accumulation of state wealth? And secondly, what do you think about the idea of drafting a block of laws to allow the state to regulate prices and intervene in case of danger? As in the case of bread prices: the requisite block of laws was eliminated, the state was removed [from controlling the issue]. Do you think we should resume work and create a block of such laws?

Vladimir Putin: Yes, I do think we should do this. The state can use market instruments to prevent economically unsubstantiated, speculative growth in prices; market methods will be enough - it is not necessary to "grab and hold" to attain this goal. We could use market intervention, create exchanges, and so on. We can do all of this. The government is aware of this but it is drawing out the adoption of the decision. I hope everything will be done just as it should be. So much for the first point.

Secondly, concerning assistance to economic sectors. On the whole, it is not correct to support one sector to the detriment of others. But we should remember that nearly 40 million people live in the countryside; they not only work there - they also live there. All countries pay special attention to agriculture. Look at the development plans of the EU, which spotlight three basic areas: infrastructure, agriculture, and science. We are closely watching developments in the world, and I think they are sometimes overdoing it in some areas.

We are helping the countryside. This takes the form of both reduced taxation and developing leasing, which you mentioned, and this item of spending will be kept up and augmented. Leasing, too, will be used. We shall do our best to support the development of Russia's own agricultural machine building. And, of course, the Government should pursue a more flexible and responsive policy with regard to the admission to the domestic market of farm produce from other countries. This should be done so that these instruments help our producers without leading to increases in the prices for staple foods.

Question: Best regards to you from all Pskov residents. We remember you, invite you again, and look forward to your arrival.

There was a question about medicine. I have to tell the audience that four years ago Vladimir Putin toured the Pskov region, inspected our regional children's hospital and helped us a great deal. The second wing of the hospital is to open in early March, and we would like to officially invite you to the opening.

But this is not what I wanted to say. In your speech, you devoted some time to small towns, and I represent a small territory, not in terms of area, nor in terms of the number of people living there, although this could also be discussed: I mean a small territory in that it makes a small economic contribution to Russia's budget. The Pskov region does not have any gas, oil, coal, or any big plants built during Soviet times- there is nothing like that. But we are spiritually rich and make a big contribution in this respect. The Pskov region may be proud of this, as indeed can some other territories. We marked our 1,100th anniversary just last year

My question is as follows. Do you think Russia, its economy, is mature enough to give perhaps some special attention today to these small territories? Not small towns, but the territories I mentioned. Certain early steps can already be seen. For example, in electricity rates, we noticed that, and this is fine, but not enough. We were placed 96th in the overall economic ratings seven years ago, but today are in 64th place now. Yet any further progress will cost us more and more.

Thank you.

Vladimir Putin: What do you mean by "it will cost us more and more?"

Question: (away from the microphone): If the plank set practically for all Russian regions ... in budget subsidies, if it is the same for all ... (inaudible).

Vladimir Putin: I understand. I wish to inform you that such an across-the-board treatment no longer exists. You remember that when answering my colleague from Adygeya I said that the Finance Ministry and the Russian Government had developed a system to redistribute resources, partly of course, from donors to subsidised regions to help their development. This is being done now. The trick is not to overdo it, because ongoing and steady injections from the federal budget into subsidised territories remove incentives for them. But for an incentive to exist, certain framework conditions need to be created for the economy to function. Ours is a very disparate nation. You mentioned Pskov. A colleague raised his hand and said that you hijacked his question. He is from the northern districts and surely wanted to ask a question about them. Our territory is 70% categorised as northern and remote territories, and they, too, call for special attention, and this, mind you, is 70%. And the Far East? Go to the Far East and listen to what people say there. Many of them think that they should be just paid for just living there.

You know we should, after all, come to an understanding that the Far East, Siberia, remote territories, central regions, and the Non-Black Soil area are all one country, which should live by unified laws, ones allowing effective economic development. But, of course, every effort should be made to ensure that local authorities adapt some or other economic regimes to develop their territories effectively. I have already mentioned the principles which ought to underlie our economy, and they will be liberal enough, but with targeted support - as you said. But we must go about it very carefully so as, I repeat, not to remove incentives for them.

Now I would like to thank you all for the support and for our joint work. I, of course, wish you every success, because it will be our shared success. Thank you very much. Goodbye.