In Conversation with Dmitry Medvedev: Interview with five television channels

The Prime Minister answered questions from TV anchors Pyotr Tolstoi (Channel One), Sergei Brilyov (Rossiya), Irada Zeinalova (NTV), Ilya Doronov (RBC) and Irita Minina (Tomskoye Vremya).

Excerpts from the transcript:

Sergei Brilyov: Let’s begin with a traditional question about the outcome of the year. The Russian economy has withstood the shock from falling oil prices. We have gradually decided what we need to do about the sanctions. We have even avoided a recession. But one of the President’s May executive orders set the goal of joining the group of the world’s five largest economies. How can we attain this goal with the current development rate?

Dmitry Medvedev: I would like to begin with political rather than economic results, because it was a very important year for the country when we elected the president, other executive bodies and top officials as well as held elections to our legislative bodies. We have achieved all the goals and created conditions for a stable development of the country.

Now for the economic performance. The growth rate for January−October reached approximately 1.7 percent, just as we planned. Although it is a modest figure, but the economy is growing and the growth rate is comparable to the figures reported in European countries.

In order to keep up our development, we must increase the growth rate, and this goal is set out in the presidential executive order. We need to reach the growth rate that is stipulated in the Key Guidelines for the Government to 2024. We expect the growth rate to reach the figure I have mentioned, but we will do our utmost to increase it to 2 percent in 2020 and 3 percent in 2021, because we must keep up with the world’s average growth rate. However, it should be noted that the global rate has decreased because of the ongoing trade war.

We will have a surplus budget for the first time in years. And it won’t be a minor surplus, but quite a substantial one. This means that we are investing our revenues and forecasting the results of possible decisions correctly.

Our economy has a margin of safety thanks to these decisions.

Another notable factor in addition to a surplus budget is low inflation. This is a major recent achievement. This year we expect inflation at some 3.5 percent. At any rate, it will be under the 4 percent target we set several years ago.

We continue working to increase the margin of safety, so that our economy will be protected from external stress, which has not gone away. Oil prices are volatile and largely unpredictable, despite the ongoing consultations in the OPEC+ format. We will see what it comes to. This is the first thing I wanted to say.

The second and no less important factor for our economy is the continued confrontation with a number of countries that has resulted in the adoption of the sanctions. It would be foolish to say that this has had no impact on our economy. Yes, it has had an impact both on the global and Russian economies, as well as the economies of the countries that have imposed these sanctions. Despite all that, we have increased our foreign currency reserves, which have grown by some $30 billion this year to over $460 billion. It is our safety cushion. Other important factors are our traditionally low internal and sovereign debts, which we are managing quite well, and other parameters that ensure our movement forward.

In short, I would describe the economic results of this year as positive, despite the difficulties and problems. It is clear that we are not satisfied with everything either.

Irada Zeinalova: When the President was setting the goals, he said that we needed a breakthrough. The cost of the breakthrough came out at 8 trillion roubles. Did you manage to raise this amount?

Dmitry Medvedev: Yes, of course, we did. It was really necessary to accumulate 8 trillion in order to reach the national development goals outlined in the Presidential Executive Order of 7 May, 2018. You and I understand well that life goes on, and there are common and routine expenses in addition to these 8 trillion, which are not part of the national projects, and no one cancelled them.

The expenses associated with operating, expanding and upgrading infrastructure, as well as the costs associated with a number of social programmes, coupled with the expenses that we will incur in the wake of accumulating extrabudgetary sources, will amount to 23 trillion roubles before 2024, of which 22 trillion roubles are earmarked for fulfilling our social obligations under the education and healthcare systems.

The next question was where we were going to get this money from.

Here, we had to make certain efforts in order to understand what exactly would be least painful for our country at the moment from the point of view of accumulating additional sources of growth and extra revenue. Eventually, we decided to increase the VAT by 2 percent, adjust the excise policy and resolve a number of other issues. However, in general, all of this is the result of the proper redistribution of sources of funding for a number of programmes.

Now, we have launched 12 national projects which cover all areas of our life, including roads, housing, healthcare, education and social expenses. I am absolutely positive that we are up for the task.

Pyotr Tolstoi: You mentioned the sanctions war. Amid this war, most industries in Russia are unlikely to count on securing foreign investment. What sources of economic growth do you see today to compensate for the shortfall of foreign investment?

Dmitry Medvedev: The national economy can develop primarily through its own investment, reinvesting the funds coming in from the growth of the national economy. Foreign investment is a secondary source anyway.

We must focus on our sources of growth. This certainly does not mean that foreign investment is no longer welcome. Obviously, we will try to keep everything that we have achieved in recent years, including the investment climate. And to improve it, of course, because it is not ideal yet. Even though we have climbed up to very decent positions in business activity rankings, and did it quickly enough – up from 150th or even below to much more respectable places, ranking 40th or higher, depending on which source.

Speaking about foreign investment, it depends on specific countries and specific companies. Many of our partners have stayed. I am not only referring to the Asia-Pacific region, our friends from China, India and some other countries. No. I mean our partners from European countries, and even our partners in the United States, a country Russia does not have the warmest relations with these days.

I recently held a meeting of the Foreign Investment Advisory Council. It includes the world’s largest companies. The total capitalisation of these companies, which come to visit us here, is several trillion US dollars. These people are their top executives. And they all say: we would very much like to stay in Russia and to develop our business here. So in this sense, no one is leaving. Although certain governments have indeed thrown a spanner in the works. One of them is the government of the United States, the US administration, and the governments of some European countries.

But other countries have been much more sensible in their actions, and they are saying more and more often that all these sanctions have caused tremendous damage to everyone – approximately $100 billion.

Pyotr Tolstoi: Should we count on ourselves?

Dmitry Medvedev: Absolutely. This is not what is commonly called self-reliance – as some countries formerly understood the term. But we have to count primarily on ourselves, always – on the strength of our economy, on the processes that are taking place in industry and agriculture.

Russia’s agriculture, which was called the black hole in the 1990s, is now feeding the entire nation. We have attained the main food security goals and are now supplying grain and other farm products to world markets. Our country has been predestined to feed the entire planet. And we will try to do it.

Look at the leap the pharmaceutical industry has made. In recent years, pharmacology, pharmaceuticals production has been growing at a rate of 15 to 25 percent per year. This list can be continued.

Sergei Brilyov: The pension reform is a very special topic this year. It was a compromise between different branches of power against the background – let us call things by their proper names – of tensions in society. Is this the last increase in the pension age? Does what has been done really make it possible to improve pensioners’ living standards?

In Conversation with Dmitry Medvedev: Interview with five television channels

Dmitry Medvedev: As is obvious, it was a very difficult decision. It was the most difficult decision the Government took over the last few decades. At the start, everyone was aware that decisions of this sort do not make the Government any more popular. On the other hand, this decision was painful to make. And decisions of this kind cannot be often revised. Let me remind you that the last decisions [on pensions] were adopted about 70 years ago.

It is obvious that this decision, too, is intended to last long. Life expectancy in this country is increasing, as it is doing the world over, and this is the main synthetic indicator of our state’s development. Nevertheless, the compromised decisions were made and adopted. The President made the key suggestions on August 29. The pension age for women was adjusted, to keep in place the five-year gap, as well as the majority of fringe benefits and additional opportunities for certain groups of those entitled to benefits. We have taken this path to make the transition much smoother. We have retained a number of seniority provisions. I mean 37 and 42 years of employment. We have retained provisions related to supporting certain groups of citizens. We have introduced rules on additional incentives for, or additional payments to, people in rural districts who have been working for a long time in the agriculture sector.

And, finally, we have done this primarily to enable pensioners to receive higher pensions and to increase pension incomes rather than for the sake of stability of an abstract pension system (although this is also important from the point of view of macroeconomics). And this has been directly set out: Pensions will increase by one thousand roubles each year for six years at a stretch. We would have been unable to do this were it not for these decisions.

Pyotr Tolstoi: Government ministers have been speaking recently about unprecedented growth of wages in Russia. But the people somehow don’t feel this. There is no improvement in the financial situation, and, judging by the general sentiment, it is the number of poor people that is growing rather than anything else. Can you comment on the social aspect and people’s displeasure with the Government speaking about high incomes in a no-income situation? 

Dmitry Medvedev: It is absolutely right to demand justice, the aligning of living standards, higher incomes and the elimination of poverty. This demand can be supported at all political levels. This is something that was done in the presidential executive order and in the Government’s documents. Let me remind you that our objective is to reduce poverty in half in this country. And we will focus on this task. 

People’s incomes were going down for a long time because of the crisis and all kinds of restrictions and other problems. They have resumed growing over the past two years. There are objective economic figures for this. The real disposable incomes of the people will grow by 1.6 percent this year. And real – not nominal – wages will increase by 7.6 percent. This means that we have reversed the downward trend. Therefore, I believe that our ministers are telling the truth. But we must not rest on laurels. On the contrary, we must do our utmost to spur on this growth. But we must implement a whole plan to reach the target of reducing poverty by half. Our colleagues are preparing this plan.

In addition to supporting certain low-income groups, we must also continue to implement the programmes that have shown good results. We have decided to extend the maternity capital programme. Under it, we hand out very good sums of money – 450,000 roubles – for such necessities as housing and medical services.

Therefore, we will keep working on our priorities and will further expand upon them whenever possible. We will be doing this in all areas that have to do with helping the low-income groups.

Irita Minina: The state has an even more challenging job – to increase life expectancy in the country. We have analysed two national programmes – Healthcare and Science – and we have concluded that there are no points of contact between them. They are two parallel lines that will never meet. Why is this? Because there are no research targets in the Healthcare programme and no subjects that concern healthcare in the Science programme.

In Conversation with Dmitry Medvedev: Interview with five television channels

Dmitry Medvedev:  There is no wall between science and healthcare as national programmes. But some of their provisions stand apart in terms of monitoring. The Science programme also stipulates the development of healthcare, medical research, biotechnologies and gene technologies, while the Healthcare programme definitely includes a research component. Even the decisions we have already adopted provide for establishing 27 research centres for promoting all this.

We want both fundamental science and applied research to develop. We will not achieve breakthrough results without an applied research aspect in the Science programme and provisions for fundamental research in the Healthcare programme. So have no misgivings; everything will be done properly here.

Irita Minina: Let us speak about problems in the healthcare sector. You know that our people have great respect for doctors. But the downside of this profession is occupational burnout. There is a big problem with medical specialists in the regions. The best doctors seek employment at private clinics, so that people have to wait for four to six weeks for an appointment with a specialist at publicly funded medical facilities. Is this a personnel or system problem?

Dmitry Medvedev: The medical profession is a difficult occupation in terms of knowledge and human skills. Like in all other professions, there are good and mediocre professionals in healthcare. But the overwhelming majority of our medics are loyal to the Hippocratic Oath and faithfully serve the people.

This doesn’t mean that the situation when it comes to healthcare is simple. We are short of some 22,500 medical professionals across the country. Some regions are short of GPs and paediatricians, while others need more specialists. So it is a mixed picture, but it is clear that we must train more doctors. We must start with training the 22,500 doctors we are short of. We have trained some 8,000 in the past years. We must keep this up, but not at all costs. When I delved into the matter, I learned that the enrolment competition at some medical schools is 30 people per place. This is good, this means that students are going to medical schools.

There’s a doctor training system at conventional universities. Many major universities have medical departments that are quite strong. They are strong if they have clinical bases.

A doctor cannot receive proper training if all they use is an iPad or a notepad to take notes. Before they become doctors, students must undergo training in operating rooms and hospitals. So, our efforts should focus on training and professional development of modern doctors, eliminating staff shortages and improving doctors’ working conditions. We have accomplished quite a lot in this regard over the past years, such as raising salaries quite significantly and installing innovative equipment. Of course, it is important to continue to make such decisions into the future.

Irita Minina: You said during your previous interview that doctors at outpatient clinics are overwhelmed by paperwork whereas in private clinics salaries are higher and overall conditions are better.

Dmitry Medvedev: Quite a few things have changed in terms of reporting and the transition to electronic medical records over the past year. During an appointment, doctors must spend 90 percent of their time talking with patients, examining them and giving recommendations. All the remaining information should already be there in the computer. Doctors should be able to access the database in a few mouse clicks. Electronic medical records are becoming routine practice. We are about to start this transition as a pilot project throughout the country.

Ilya Doronov: The prices of medicines may grow by 10 percent or even more next year when producers will shift the cost of labelling onto people. What will the government do in this situation? Will there be a shortage of medications?

Dmitry Medvedev: Absolutely not. Everything will be fine, and prices will not increase. We are monitoring prices.

We have transferred some 150 billion roubles to the regions for supporting those who are entitled to medical benefits this year, and we will add another 15 billion roubles for these purposes next year so as to guard against price hikes or any other related problems.

We have a list of medicines that are abbreviated as VEMs, that is, vital and essential medicines. There are 699 of them. Next year, we will add another 36 VEMs to the list, which will increase to 735 entries. These are nearly all the medicines that are essential for dealing with health problems. The list is periodically updated and is protected in terms of money and parameters.

Our pharmaceutical industry is improving. Sixty percent of the medicines on the VEM list are made in Russia. They are made in Russia and sold for roubles. When we purchase medicines abroad, we depend on the currency situation which is why prices may grow.

And lastly, the labelling issue. We must know what is taking place on the pharmaceutical market. There must be no counterfeit medications and no abuses in this sector. There must be no expired medications on the shelves. People must be able to tell good medications from counterfeit ones by reading the QR codes on the package. They must know how these medications reached Russia, where they were produced, as well as the ingredients, of course. We are doing this to promote the development of the national pharmaceutical market and to provide support to people.

Irada Zeinalova: All of us are aware of the tragic shooting at the Kerch school. It concerns the psychological health of the nation. The lives of our children are in danger. We fear for the lives of our children. What is there to do? 

Dmitry Medvedev: It is indeed an awful tragedy. I would like to express my condolences to the parents and relatives once again. You are right, it is a world problem but it has to be addressed in the context of our country’s conditions.

The main thing in a child’s upbringing, as conservative as it may sound, is the family. Everything begins there. If a child is glued to the computer and spending hours on it, and the family is right there beside him during all that time (I am not talking about problem families now, although such families also exist), of course, it is the parents’ duty to come up and ask what has him so transfixed. The child may have some problems, may need some support. And if the best they can do is wash their hands of it, saying “Let him stare at the computer, no problem”, then it creates the basis for such tragedies.

School, of course, is very important. No one denies its role, and the appropriate course of action should also be taken there.

You and I understand that the internet is just a means; you cannot look at the internet itself as the cause of all problems. Although it should be attended to and we do attend to it.  The problem is that such cases are always individual in every country – in Russia, America and other countries. And there is no cure-all. Nevertheless, it is necessary to keep an eye on this field and such decisions should continue to be taken. For this reason, given our conditions, I think it is necessary to pool the efforts of everybody responsible: family and parents, school and of course the state, where regulatory options are concerned. 

Sergei Brilyov: There’s a national project entitled Science with 635 billion roubles allocated for its implementation. The May executive order identified the top priority area which is creating a digital economy. Of course, the digital economy has inherent risks. Machines are replacing humans, and this is a global trend. Unemployment is up ... Has the Government assessed these risks?

In Conversation with Dmitry Medvedev: Interview with five television channels

Dmitry Medvedev: Yes, we have. You mentioned the amount allocated for science. Speaking about total costs, they amount to about 400 billion roubles a year which covers not only research, but civilian applications as well. In other words, much larger amounts are at play that are quite significant for our country at the moment.

Surely digital is not just a boon, but also a tremendous challenge that humanity, including our country, now faces. We need to make sure that digital brings more positives than negatives.

In some instances, the introduction of modern digital technology really leads to a reduction in the number of jobs. This year, unemployment in our country is unprecedented low at 4.7 percent according to the International Labour Organisation definitions. We must build on this achievement. We are aware of the unemployment numbers in other countries, including the developed ones. The digital challenge creates such issues.

Everyone is enthusiastically discussing the internet of things where a number of decisions will be made by machines. This is important, but also affects employment. We need to train people for more complex and high-tech jobs.

Meanwhile, less technologically advanced and low-skill jobs will become a thing of the past, considering the low pay if nothing else. Therefore, retraining programmes must be there as part of the overall digital economy programme. We are on top of it. We realise that digital creates convenience. The state must combine convenience with addressing existing challenges, overcoming them and moving forward.

Irita Minina: Is our education system up to the challenges of the digital age?

Dmitry Medvedev: Let me put it this way: the education system is never ready for challenges. That is why it is undergoing changes. There are always challenges and issues to tackle, and they are always one step ahead of what you are preparing for. That's how things are. Otherwise, the education system would stop evolving. Statecraft - and the decisions that we take - is all about responding to these challenges in due time.

Irada Zeinalova: Here’s a question from the public. We raised the retirement age, raised some taxes, including VAT, and took certain decisions in the oil industry with the potential to raise prices for petroleum. What are we looking at come next year? Will we able to keep a lid on prices for food, services and medicines?

Dmitry Medvedev: We considered a variety of options for raising this money - 8 trillion, or even more if we take it to the maximum - I gave you a different figure earlier. We decided to increase the VAT which has changed several times in recent years. Let me remind you that initially the VAT in our country was 28 percent, then 20 percent from 1994 to 2004, then 18 percent, and now we have taken it back to 20 percent. We did so precisely because, all costs considered, an increase in taxes is the least painful move for people. This is the most balanced, the least difficult solution for the economy and companies and, most importantly, our citizens. We went through this and took these significant decisions. Importantly, we are not planning to revise these decisions as they should create the basis for stable growth in the coming years. 

Ilya Doronov: Another question about Government decisions. The agreement reached with the oil companies was not a market tool. Belousov’s plan is probably not a market plan either. Are we moving away from a market economy and back to “hands-on” economic management?

Dmitry Medvedev: Of course, we are not moving in that direction. Our economy is market-oriented, open, and operating under generally accepted principles with liberal guidelines. Nothing is changing here. But it is obvious that we have to monitor what is happening. In some situations the Government’s responsibility is to adjust ongoing processes.

You mentioned the oil industry. In the recent period, due to the rise in oil prices, our oil companies considered themselves penalised. They came to us and said: we are not making as much as we expected in the domestic market. Maybe they are not making what they expected, but we had to decide what was more important: oil companies meeting their high revenue targets or affordable petrol for people, especially low-income people. So, let’s face it: we were forced to put pressure on the oil industry. To have them sign these agreements. I think we did the right thing.

If we manage to keep this situation stable – I very much hope we will, because there is an agreement, there are certain provisions, a change in the excise policy and some other decisions that we made in the interests of the oil industry, among others, because this industry is important – it feeds a significant part of the economy – if everything is stable, we will not go any further. If the situation gets out of control, we will have to make decisions that are unpopular with the oil companies, including imposing so-called protective duties on exports. I hope this will not happen.

Sergei Brilyov: The Government raised the issue of using the US dollar. What do you mean, what will this mean for ordinary Russians? Does this mean giving up the dollar, or banning dollar transactions?

Dmitry Medvedev: Weaning the economy off the US dollar in general does not mean banning it. The dollar is certainly the most important world currency, the most important reserve currency, so the dollar’s ​​circulation as established by law in our country will not be prohibited. People will be able to continue to exchange dollars into roubles or other currencies. No one has promoted this; these ideas are absurd and defy economic rules.

But we need to do something simply because we have to focus on our own currency. We have a currency, the rouble. It is more efficient for us to pay in roubles, and it is more efficient for us to make international transactions with other countries in roubles. We would like to carry out transactions in roubles and the yuan with China; we have had an ongoing discussion with them. The same with India – respectively, in rupees and roubles; with other countries – in their national currencies and roubles. This is only natural. We will definitely continue to promote this policy, there is nothing wrong with it. And, to be honest, the US authorities often do everything to undermine trust in the dollar.

Ilya Doronov: You said once that imposing sanctions on Russia is akin to declaring war on our country. What is the situation at the front now? What are we afraid of when the Americans impose new rounds of sanctions?

Dmitry Medvedev: All quiet on the Western front. The sanctions are still in place, it is a reality of modern life. The world economy has already lost almost half a trillion of dollars because of trade wars which, of course, affect economic growth. The sanctions imposed on our country and our retaliatory measures have resulted in losses of approximately 100 billion dollars, a huge amount, in our trade with European and other countries. However, since the sanctions remain in place we are maintaining all the decisions that were taken, especially since they have not only downsides but also certain elements making it possible to develop the economy.

The same goes for our agriculture; there is no point in concealing that it has simply benefited from the retaliatory measures against agricultural produce from the EU and the United States.

Irada Zeinalova: Sanctions is not a means of solving problems – this is at least the Russian position on the Western sanctions. Your Government is imposing sanctions on Ukraine. What is their purpose if they do not solve problems? How long are they going to last?

Dmitry Medvedev: I don’t know how long these sanctions will remain. And I would like to point out once again that these sanctions, based on the presidential executive order and the resolution signed by me, a Government resolution, were, of course, imposed not on the Ukrainian people or even the Ukrainian economy, but on those who discredited themselves, who are doing harm to our country. We do not know how long they will be in effect. We don’t want a sanctions tug-of-war. Anyway, as it is known, it was not us who started this sanctions story. They imposed sanctions, they began to place restrictions on us and this did not fail to have an effect. Our trade with them has fallen.

Nevertheless, despite all the efforts of the Ukrainian authorities to somehow limit the development of economic ties with our country, it is not an easy task. Russia is still one of Ukraine’s most important trade partners because exports are 15 percent and imports are 9 percent. We are the largest trade partner for Ukraine. Ukraine is not the largest trade partner for us. Ukraine accounts for about 2 or 2.3 percent of our aggregate trade. It is very little. It was more. But we remain the largest trade partner for Ukraine. Notably, they started to actively promote their partnership with the EU but trade with the EU practically has not changed in the years of promoting their partnership. This is the real outcome.

Naturally, the number of sanctioned persons may change. As far as I know, currently there are 368 individuals and about 70 companies. We are not interested in endless confrontation. However, if their restrictions are maintained, naturally we will maintain ours. And we are well aware that it is a sensitive matter for a number of Ukrainian businessmen and politicians, who sometimes continue to keep their money in Russian accounts.

Sergei Brilyov: In general, is it possible now to talk about a global approach to economic matters? Or does everyone already rely on one’s own?

Dmitry Medvedev: I can say from my own experience… It became worse, objectively it became worse. I remember how, in the end of 2008, we all got together and talked: the crisis broke out, everything is bad, but look, we are all sitting together at one big table. This is the G20, we can have a discussion here… I remember how the then President of the United States said: there is a representative of the Russian Federation here and a representative of the People’s Republic of China, and we are so different, and yet we are trying to come to an agreement. True, that was partly political rhetoric but it was partly fair, too. And we were able back then to overcome the aftermath of the first blow of the 2008-2009 crisis. And today, in addition to the current problems stemming from the crisis in the global trade system, those problems have come back to bite. Today, the United States of America is at odds with the People’s Republic of China and the European Union too, let alone our country. And this is a huge economy. This is a huge part of the global trade. It certainly damages the world trade principles. Some leaders, including in the United States of America, have even gone as far as to say that the WTO is unnecessary and that all those principles should be done away with and all partnerships should be dissolved. The question arises: what rules will remain? The dollar is, of course, the biggest reserve currency. But some 100 years ago, it was not the dollar. There was the pound sterling, there was the franc, and the German mark, too, claimed certain positions. Today, the yuan is gaining momentum as a reserve currency, in fact. So, there can be no monopoly here.

Sergei Brilyov: Will we go to Davos, after all?

Dmitry Medvedev: That depends on the management of Davos itself. As I understand, they have started to modify their position. The aim of the trip was simple. The aim of a trip to any forum is simply to rub shoulders. And we always welcome that and were always glad to do that, and our businessmen and government representatives used to go there. But if our business is unwelcome, if they say “those are not good guys” –  in that case, there is no point in us going there.

Sergei Brilyov: Let them come to our St Petersburg.                  

Dmitry Medvedev: Yes. Let them come to our St Petersburg, Sochi, Crimea or Vladivostok.

Ilya Doronov: And it looks like Davos has started to right itself.

Dmitry Medvedev: I think that, after all, they are pragmatic people, so let us wait and see.

Irita Minina: The richness of our forests, forests, or our “green gold,” is a common concern for all of us living in areas where there are plenty of forests. What shall we do to protect forests against barbarians, illegal timber cutting, fires and rubbish dumps? The most sensitive issue in all areas with abundant forests, particularly, in the border areas, is that round timber is being taken out of the country to China on a mass scale. You have just said that we are on wonderful partnership terms with China…

Dmitry Medvedev: Indeed, the area covered with forests in our country is the world’s largest. We must do the utmost to preserve this wealth for the generations to come. So we will change the rules. Amendments were made to our Forest Code, making those who have cut a hectare of forest responsible for planting a hectare of new forest. This is not all. We must also keep track of the flow of goods.  Incidentally, about a week ago we talked about this with [President] Vladimir Putin. Where does the problem lie? In principle, we are interested in having a modern woodworking industry, as well as leading-edge furniture factories and timber mills in Russia, and we are working with our partners to achieve this. Many of them – Western companies and even some Chinese companies – have agreed to do this. But this is not the end of the story. It is much easier to cut down everything and in a half-fraudulent way ship it somewhere, especially if there is no control over these operations. So, we must fully sort things out in this area. Currently, we are introducing a tracking system that will enable us, in fact, to tag shipments of timber or various timber products.

Dmitry Medvedev: If we introduce all this and the Unified State Automated Information System (USAIS Forest) works similarly to how the same system works for alcoholic products, it will dramatically change the situation. There should be control and even a ban on deliveries if they are the result of barbaric logging, uncoordinated decisions and deliveries violating the rules. But this has to be done on a case by case basis, without doing damage to existing partnerships.

Sadly, fires pose just as big a problem. Of course, they occur in other countries as well, but we have massive wildfires that are hard to put out. We have to invest in fire-fighting equipment. We have already decided to allot an additional 20 billion roubles to purchase such equipment because the regions are not coping with this problem. We also have to increase the number of inspectors; we often have one inspector per million hectares. And, of course, there should be efforts to prepare people for fire prevention measures.

As regards dump sites, which have already become a major issue, we have to eliminate hundreds of illegal dump sites across the country. We must learn how to prevent dumping like they do in Europe. This requires big money. Everything should be processed and utilised instead of buried. Currently, we recycle about 10 percent of all waste and the rest is dumped, while in Europe, they recycle up to 70-80 percent, with higher environmental standards and recycled products. That said, we are all facing the challenge of creating advanced recycling facilities.

Irada Zeinalova: It seems that local officials have completely lost touch with reality. They tell us to live on 3,500 roubles per month. They say the government owes nothing to us - but under the constitution, our government has social obligations. What can we do about these officials who think that they pronounce the truth? 

Dmitry Medvedev: Those in power need to switch on their brains. Sadly, not everyone is able to do that. I don’t want to offend all public officials. We have about a million people in our country who work in the public sector, with about two-thirds of them being federal and regional officials and one-third being municipal workers. These are mostly responsible and good people who are committed to their work. But there are also other people as well. Those who say stupid things must be held accountable.

Any public sector worker, from those working in a village to top officials, have to think before speaking. 

Pyotr Tolstoi: Mr Medvedev, I have a question about culture in general.

Do you believe it is necessary to increase the influence of the state in that part of national culture which the state actually pays for, sponsors and otherwise helps fund? Is there a national dimension of this kind in culture? I believe it is impossible to move forward without such a national dimension. There can be no breakthroughs unless a person feels part of the great history of a great country.

Dmitry Medvedev: Of course, we can be rightfully proud of our great national culture, the culture of the Russian Federation, which includes people of different ethnic backgrounds and religions. It is important to properly prioritise efforts to support culture. Nothing should be imposed, however, and culture should be diverse. If we channel everything into several streams, so to speak, and say what needs to be done, then it will not be culture, but censorship. Setting priorities is a different story. In this sense, the state has means of regulation, which can be just about anything.

Our national project has 100 billion roubles allocated for culture. So, this money should be used to promote things that are important for the citizens of our country. Not just cinema. At some point, we focused on rural cultural centres which serve as focal points of civilisation in villages and small towns. These centres must be saved at all costs. It is necessary to invest in them and turn them into modern facilities outfitted with the latest equipment. That is why we are creating 500 virtual concert halls. Modern technology makes visiting brick-and-mortar concert halls unnecessary. You can enjoy masterpieces of music or whatever else in the comfort of your own home.

These priorities, such as libraries, concert halls or new major cultural sites, need to be properly aligned.

Ilya Doronov: What does the Russian Prime Minister read and watch?

Dmitry Medvedev: More than anything else, the Russian Prime Minister reads business papers and other documents. Usually, and I am not exaggerating, I have a pile that big to read on a daily basis. However, I would have stopped evolving as a person if I did not check out things from other areas. I try to read research papers on economics and law, as well as fiction.

Irita Minina: Our memories of the World Cup are still fresh. We still remember the emotional highs and the joy associated with this festive event. However, there are other cities without such beautiful stadiums. People from these cities were unable to buy a ticket and enjoy the championship. Some people think that this money could have been spent on pensions and raising wages in the public sector. What do you think about that?

Dmitry Medvedev: We spent about 650 billion roubles on preparations for the World Cup. For your information, this amount of money covers one month of the pension system’s functioning. It looks like a fairly large amount of money, but is, in fact, an average amount in terms of current spending. According to economists, the proceeds from the championship amounted to about 200 billion more. Even in this sense, the balance tips in favour of holding the championship.

You mentioned the cities that hosted the world championship. They often did not have decent airports or hotels before the event. Now they have everything. The Cup gave a powerful impetus to developing infrastructure and medical and social services. I am not even talking about the fact that we hosted the best world championship in history. I think absolutely everyone agrees with that, even those who are not really our friends.

Sergei Brilyov: What was your most memorable impression from the outgoing year? What are you going to start next year with?

Dmitry Medvedev: All impressions come from being around people. This year, I traveled to many regions of our country. Our country is very diverse and beautiful.  Our people are also diverse and have big hearts. They are open, sometimes tough and sometimes very gentle in their opinions. I was everywhere from Kaliningrad to Petropavlovsk-Kamchatsky. This is probably the most powerful impression I had from this year. All the more so that 2018 was not easy for the government as we had to take difficult decisions. Talking with people helps find the most appropriate solutions.

The New Year for me will begin in exactly the same way as for all other people in our country – with the anthem of the Russian Federation played after the President’s greetings. After that, I plan to take some time off and do some skiing in Sochi, if things go my way. If not, I will continue to work during the holidays.