6 Annual Big Press Conference Part 1
February 1,2007
President of Russia V.Putin
Round Hall,the Kremlin,Moscow
PRESIDENT VLADIMIR PUTIN: Good afternoon, ladies and gentlemen.As has become tradition, I will begin our meeting today by summing up a few of last years results. As I have said many times in the past, everything the government and the authorities in general do should pursue one main aim, that of raising the living standards and quality of life of our countrys citizens. I will therefore begin by summing up the results achieved in the social sphere in 2006.Wages rose by 13.3 percent on average, real incomes increased by ten percent from last years base, and old-age pensions rose by 5.4 percent. We have a problem, of which our pensioners are well aware, in that the replacement coefficient in Russia is not very high 27 percent. This is lower than in many European countries, but the retirement age is also higher in Europe. In Russia, the retirement age for women is 55, for men 60, and for many categories the retirement age is even younger. In Europe there is no difference between men and women and everyone retires at 60, or at 65, and in many countries there is even talk now of raising this retirement age. But we do have a problem, nevertheless, especially in the main sectors of our economy. Regarding the aviation sector, we have decided that employers in this sector now have the right to put more money into pension funds by counting them not as profits, but as cost value. This could be the path to follow in the main sectors of our economy, and the government, in any case, will have the opportunity to reflect on this matter.
We are starting to see the first results of implementing the national projects. Wages in the education sector rose by 30 percent on average, while wages in the healthcare sector rose by 37 percent, as compared to the planned increase of 15-17 percent. We are now seeing a new inflow of recent graduates, especially into primary healthcare, and there is increasing competition in medical schools for this area of specialisation. We are pleased to see that natural population decline has decreased by 17.3 percent. The mortality rate is falling and the birth rate has picked up slightly.I very much hope that the measures adopted last year to address the demographic issue the maternity capital and the whole package of measures to support women who decide to have a second child will help to consolidate this emerging tendency.We still have a great amount of work to do in social development, including resolving one of the biggest challenges we face in this area, namely, reducing the gap between high-income earners and people, citizens of our country, who are still living on very modest means indeed. But we cannot, of course, adopt the solution used 80 years ago and simply confiscate the riches of some to redistribute among others. We will use completely different means to resolve this problem, namely, we will ensure good economic growth.Looking now at what actually happened in the economy last year, the national economy continued to grow at a rapid rate. We will get the final result for 2006 only in March, but various estimates suggest GDP growth of approximately 6.7-6.9 percent for last year. I say approximately because we still need to calculate events in the energy sector at the end of the year in connection with the warm winter. Perhaps there will be slightly lower figures in the energy sector, but in any case, GDP growth was higher than in 2005 (it was 6.5 percent in 2005). As you know, one of our main goals is to double our GDP in ten years, and this requires an annual GDP growth rate of around 7 percent (6.8-6.9 percent).For the first time in modern Russian history we had single-digit inflation 9 percent - in 2006. It is very good to see that this was precisely what we forecast. I remind you that when I became prime minister in 1999, inflation was running at 36.5 percent. We can see that much has been done to lower inflation over these last years. But we cannot stop here, of course, and we will continue to fight inflation and should be able to bring it down to 4-5 percent over the next 3-4 years.As you know, Russia has settled and paid off the former Soviet debt ahead of schedule. We paid not only our share of the debt but also that of all the former Soviet republics. Last year, Russia paid $22 billion ahead of schedule. Just to remind you, Russias debt in the mid-1990s came to around $165 billion.
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