DMITRI MEDVEDEV: WE SHOULD NOT HAVE MANY PRIORITIES

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An interview with First Deputy Prime Minister Dmitri Medvedev

First Deputy Prime Minister Dmitri Anatolievich Medvedev discusses potential obstacles to implementing the national projects in housing, health-care, education, and agriculture, and how the government intends to monitor implementation.


Question: It has been said that the first perceptible results of the national projects will be apparent by February. But what kind of guarantees or protective mechanisms are in place to guard against failures?

Dmitri Medvedev: The only guarantee is that we should work normally and systematically on what we are supposed to do. Such work is under way. It is happening in the government and in the ministries; it is being coordinated via the presidential administration, so it’s also being extended to the regions. There are no other guarantees, unless you count the fact that the Duma and the Federation Council have passed the federal budget for 2006. The money is there, so we can start implementing the projects. In other words, guarantees take two forms at present: well-planned, high-quality work, on the one hand, and the resources to back it up, on the other.

Question: But are the regions ready for this process? President Putin said recently that some regional leaders still don’t know exactly what they’re supposed to do.

Dmitri Medvedev: The national projects are new, and we’re working with the regions all the time, of course. Contacts with them are in place. Contacts are being maintained in all areas. For example, we recently held a meeting to discuss the national projects with regional leaders from the North-Western federal district. The process is under way, and we hope that by the end of December the regions will be ready as regards the key points of the national projects, especially the aspects that will come into force from the start of 2006.

Question: Does this mean, for example, that a range of anti-corruption measures will be implemented in the regions?

Dmitri Medvedev: Anti-corruption measures can’t be implemented in any one region in isolation. It’s a state-wide problem, and it requires a solution (I think this is obvious to everyone by now) that extends across the whole system. We can’t just tighten the screws somewhere and say that’s it, one particular region is now totally corruption-free.

Everyone should be involved in creating an anti-corruption mechnism. The federal government should create a mechanism capable of monitoring spending effectiveness and project implementation. In the regions, these efforts should involve regional and municipal leaders. As for how well this works in municipalities – let’s wait and see. Obviously, the municipal system is only just getting started in Russia. The law on local government will come into force from the start of next year, transferring some powers to municipal formations. Joint efforts are required to ensure that they are ready to implement the national projects.

Question: You’re explaining what everyone should be doing – so it seems that no such system-wide effort is being made as yet. But do you think the national projects can be implemented at all if they’re not accompanied by anti-corruption measures?

Dmitri Medvedev: I wouldn’t link anti-corruption measures solely to the national projects. I think that oveall, in this area, we need to take some serious and tough steps which are also rational and legally verified. Life goes on, beyond the national projects framework as well as within it, and we encounter corruption in other areas besides implementing the national projects. I do understand what kind of apprehensions there may be: we have all found ourselves in situations where we are asked to pay for services we haven’t ordered. It would be extremely aggravating if any part of the national projects is influenced by corruption factors. I’m confident that we won’t allow corruption to undermine our efforts.

Question: Do you agree that the fifth national project should be oversight for the implementation of the other four?

Dmitri Medvedev: There are various views on the fifth national project. For example, we recently visited Novyi Urengoi, looking at issues to do with connecting gas supplies. It might be said that a fifth national project has also started there. True, it’s of a corporate nature, involving Gazprom. But Gazprom is a national company, and connecting gas supplies is a matter of concern for millions of people. Obviously, this is a potential national project.

As for oversight, we understand that it’s a very important component of implementing all the national projects. Right from the start, we must try to establish an oversight system within the framework of all four projects. What do I mean by that? We should use all available oversight mechanisms: the federal government, the presidential administration, the parliament, the Auditing Chamber, and the Prosecutor General’s Office, as the body that exercises general oversight for observance of the law and investigates crimes. We might need to involve other law enforcement agencies as well. Finally, we need civic oversight. And all this should, ideally, be connected into one oversight system. To be honest, that has never been done before. We have caught a few fragmentary glimpses, but we have never seen the whole picture with regard to the state’s major objectives. Now we’ll try to do things differently.

I hold certain hopes for information and telecommunications technologies and electronic forms of monitoring. They make it possible to see the entire picture. Otherwise you receive ten reports from one oversight entity and others but you cannot connect all this into one uniform picture. It is also necessary not only to connect all this but also to find out which of the reports is closer to real life and which report stems from emotions or something different.

Question: How will civic oversight be established? Or are you going to involve only the United Russia party?

Dmitri Medvedev: Of course not. I think that if these projects are called national absolutely all political forces have the right to information and oversight. When the matter is about parties, we have the parliament where the main political movements are represented. They have the right to demand reports from those who participate in implementation of these ideas from government members to representatives of the regions. Other public associations having a recognized authority, for example, society for protection of consumers’ rights, can be used too. Finally, let the recently-established Civic Chamber try itself in this capacity.

Question: What will be the declared openness in development of the national projects look like?

Dmitri Medvedev: Openness should be everywhere starting from the most insignificant procedures, for example, purchase of equipment or necessary technologies or contracts for construction of some facilities. By and large, according to our laws all state purchases or state contracts should be arranged only on the tender basis. That is why we are going to observe these rules stringently in the national projects too. At any rate, auctions are good only when people known about them and not when they are organized secretly and their results are distributed under the table. From this standpoint availability of information should be provided. As to the decisions made, they should be public. Everyone should understand in which direction this or that project will progress. People will be able to receive information not only from traditional sources like mass media. We are going to create a website where documents will appear daily in the online regime and where the ongoing events will be outlined.

Question: Many previous decisions like the reform of state service actually sunk in bureaucratic resistance. Are you ready for a clash with it now?

Dmitri Medvedev: You are right. Many useful initiatives have got stuck in bureaucratic problems and in inability to organize work in a due manner. Just recall what President Putin has said at a meeting of the council for national projects: we need to liberate this area of activities from bureaucracy. These words are absolutely correct. Any decisions progress only in case of presence of efficient control. This is the main difficult. State procedures should be formal in a sensible way, otherwise we will receive the same corruption and disorder. It is necessary to formalize these procedures but to formalize to the degree when this doesn’t hinder the forward movement. Alas, it is possible to find this balance only by the empirical way. I don’t see any other way except for manual finding of the optimal form of development of this or that national project. We understand perfectly well that even if we accomplish the projects fully and optimally we will not turn the country upside down. In two or three years we will not make our country ideally prosperous in all directions. The meaning is different. We need to provide correct modern guidelines both for development of the society and for development of a separate person and to improve living standards through these normal and correct guidelines.

Question: What do you think are the main dangers for yourself in development of the projects?

Dmitri Medvedev: I see the same dangers as you. The main danger is of the work being drowned in talk and bureaucratic fuss, as well as with distribution of resources. These are the main dangers. This would be the worst scenario of all possible ones.

Question: It is already clear that affordable housing will be the most difficult project. Ministers confess that there are problems already now. What are the reasons?

Dmitri Medvedev: So far, I would not say that something is going in a wrong way. You are right to some extent. This is the most ambitious project intended for a very long time. Let’s recall what happened in other countries where housing building and construction infrastructure programs were implemented. This took decades. Our country is huge in territory and not very small in population. There are also many macroeconomic factors that impact the progress of this project. This is not like taking money from the pocket and purchasing of medical equipment. A number of certain economic preconditions are needed.

Which ones? It is obvious that people draw credits if this is beneficial. This is beneficial only when inflation is suppressed and when this credit doesn’t destroy the idea of repayable use of money. There are objective and organizational difficulties in this. At a certain moment we lost the speed of preparation of the norms resulting from the new housing and city building codes. The main task now is refilling of this gap and release of all normative acts necessary for beginning of work.

Question: How is it possible to surmount the domination of clans in housing construction mentioned by President Putin?

Dmitri Medvedev: In case of reception of information saying that this or that economic tasks is used by a certain clan for mercenary goals it is necessary to simply use capabilities of the law enforcement agencies. I think that capabilities of controlling bodies and prosecutor’s office should be used by all 100%. It is necessary to react to this. It is also quite obvious that introduction of transparent procedures is a normal macroeconomic means for surmounting of the clan domination and provision for cleanness of running business.

On the housing market very much is connected with distribution of land. In certain situations this land is distributed with breaches of the rules. That is why transparent procedures for distribution land plots represent at least a good basis for forward movement within this project. We also do not have a normal market of construction materials and it is necessary to develop it too.

Question: Let’s take a situation, for example, widespread in construction sector when a procedure is formally transparent but actually it is not. What we are to do?

Dmitri Medvedev: There is only one remedy, that is to try to bring the procedures to the logical end. If we treat this otherwise we can simply give this up and say that it is possible to bypass this easily anyway, that all tenders are discussed beforehand in high offices and only people close to the authorities are chosen. This is a vicious circle. That is why we need to permanently and probably sometimes with certain dullness introduce transparent procedures based on the law. I don’t see any other way at this point.

Question: Do you agree with those colleagues in the government who say that injection of money into the housing sector now will lead only to growth of prices?

Dmitri Medvedev: There is such danger. That is why we need to calculate very accurately the ratio of money supply coming to the housing sector to inflation factors and housing prices. We will have to balance. Now we understand that our housing market is of deficit type and we need to develop it. We need credits in circumstances of suppressed inflation, competitive production of construction materials, competitive fulfillment of housing contracts and provision of services.

Question: What can you answer to those who consider large-scale financial injections in the framework of national projects incompatible with the goals of inflation hindrance?

Dmitri Medvedev: It would be wrong to believe that only one factors influences inflation. It is impacted by growth in non-interest expenditures, growth in revenues, growth in prices of certain categories of goods and a lot of other factors. All this should be balanced. The task of the government is to determine which of these factors exerts a more serious influence and which has a weaker influence, which factor we can sacrifice for the sake of achievement of the end social result and which we cannot. Unfortunately, this year we exceeded the target inflation figures. In the second half of 2005, inflation growth slowed down. At any rate, it is possible to say that the inflation task is not fulfilled. So suppression of inflation will be a priority next year. We cannot allow eating up of the money allocated for development of national projects by inflation.

Question: What can do those who have not found themselves in the framework of national projects yet, for example, teachers at musical schools or doctors not eligible for salary raises?

Dmitri Medvedev: I am sure that their turn will come soon. Even with regard to the categories that you have mentioned it is planned to make decisions influencing well-being of the people in the near future. For example, we will adjust payments to doctors of the primary level to the increased salaries of physicians, general practitioners and junior medical staff. There is an economic mechanism for them, quite adequate in my opinion. Thus, the necessary decisions will be made. With regard to other categories, naturally, we should think about this and should simply return to this topic when material capabilities are built up.

Question: What may become the next national project?

Dmitri Medvedev: Overall, there should not be many priorities. Four (or four and a half if we consider gas distribution program a priority) are quite sufficient. We need to find forces, means and methods of control over fulfillment of these tasks. If we feel once again that we are ready to fulfill new national tasks, of course, we will have to announce them. It is probably possible to do this next year and this depends on our readiness. Which topics can we discuss? It seems to me that this could be science and culture, the areas where Russia has traditionally had the leading position and which, unfortunately, have received limited financing lately. At any rate, we should not be too hasty and should not emasculate the idea of national projects in such way. The project approach is confined in development of important areas of life of the society through a set of important key priorities.

Question: Analysts have already called you a person paving the way for the future president. To which extent will electoral preferences be taken into account in development of the national projects?

Dmitri Medvedev: Implementation of the projects pursues an absolutely different goal. This goal has been formulated. This is not a pathos goal but it does sound loudly. This is improvement of living standards of citizens of Russia. Electoral goals have nothing to do with the relevant programs. If we manage to do something good this will be good for everyone including probably those who will succeed the incumbent authorities.

Question: But it is hardly possible to consider the fact that significant part of fruits from development of the national projects will appear between 2007 and 2008 to be a mere coincidence.

Dmitri Medvedev: I disagree. In reality they will appear much later. When President Putin formulated ideas of national projects (this was in the presidential address of 2004) he mentioned another horizon of development intended for ten years ahead. It is difficult to look further but I think we will have something to do even ten years later practically under each of the national projects. This is just another matter that we are obliged to fulfill a number of priority tasks in the next few years.

Question: Well, it is clear who will be responsible for success of the projects. Who will be held accountable for failures, and how?

Dmitri Medvedev: I think that the same people who are held accountable for failures should be given credit for success too: this means all those who implement the national projects, without exception, from the federal government and the ministries to regional administrations and municipalities. These should be everyone involved into the process.

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