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Д.Медведев.Ответы на вопросы К.Клеймёнова.11.10.09.Part 2

Conversation with Dmitry Medvedev.Answers to questions from Director of News Programmes at Russia's Channel One Kirill Kleimenov.Part 2
October 11, 2009

Разговор с Дмитрием Медведевым. Ответы на вопросы руководителя дирекции информационных программ Первого канала Кирилла Клеймёнова.
11 октября 2009 года
Москва, Останкино

KIRILL KLEIMENOV: Did this result from replacing imports?

DMITRY MEDVEDEV: It resulted in part from import substitution and in part from implementing programmes we had launched earlier I am referring to the government programme for supporting agriculture, which originated from a national priority project. And so, in some areas, we have seen gains. This year was a difficult one for crop production, at least for the Russian harvest. We had a drought, which led to a smaller harvest than we had planned on. Overall, our harvest was decent though some 90 to 95 million tonnes but it was nevertheless lower than what we had counted on, and lower than last year, when we had approximately 108 million tonnes. Thus, our export potential in grain has become slightly smaller. Still, grain production, which is the major component of our national agriculture, is nevertheless sufficient to meet our domestic needs in terms of grain, and guarantee reasonable exports. Russia is still trying to become a major grain exporter, and I believe that we must continue these efforts. But overall, agriculture also faced the problem of receiving fewer loans. There were problems in the funding system that we needed to fix on a case-by-case basis I am referring to the situation in the banking sector.

KIRILL KLEIMENOV: The fact that money wasnt getting out to those who needed it.

DMITRY MEDVEDEV: Yes, that and other problems. Still, I want to emphasise again that since the demand for food does not drop significantly even during a crisis, the agriculture sector fared better than the industrial sector and we must learn certain lessons from this. This means that our agriculture sector has great potential. We absolutely must invest in this area, especially since more than one third of our nations citizens live in rural areas.

KIRILL KLEIMENOV: There were many different predictions about what would happen to the Russian economy this summer. Now, it is fall and we can draw some conclusions, since there were negative forecasts in regard to the ruble value and the banks performance.

DMITRY MEDVEDEV: In my view, the government made a multitude of good decisions. We supported our banking system. At a certain point, it had begun to waver. As a result of our direct support to the banks, we had additional money on the inter-bank market, and our banking system withstood the stress, and now, it is doing just fine.

Once we overcame the negative situation in the banking sector, we were able to extend some of the loans and some of the additional anti-crisis funds toward supporting various industries, manufacturers, the defence industry, agriculture, and just ordinary enterprises that were facing financial difficulties. We maintained nearly all kinds of subsidies and nearly all forms of aid, such as the various types of agricultural loans with the so-called subsidised interest rates, wherein part of the interest, up to 95 or even 100 percent, is paid by the government, while the agricultural producers pay significantly less.

Thus, having overcome the situation in the financial sector, we essentially created decent conditions for the industrial and agriculture sectors performance. This was the most important factor.

The national currency situation was also quite difficult. At the beginning of the year, the ruble became significantly weaker. This was an unavoidable move, which occurred in an orderly way. We did not allow for abrupt, intermittent changes in our exchange rate. Nevertheless, nobody was happy about weakening of the ruble, because it painfully hurt peoples incomes. Currently, the situation with the national currency market and the ruble is entirely calm and stable. Moreover, our national currency has even become stronger you are aware of its current exchange rate. This is due to a variety of reasons, such as the anti-crisis measures and oil prices which are higher now than during the first and second quarters of this year. Thus, it seems to me that overall, our reasonably optimistic expectations are now justified. At the same time, there are grounds to believe that next year we will have a whole new set of problems to address.

KIRILL KLEIMENOV: The anti-crisis plan has now been around for a year. What are the greatest difficulties? What has been hardest to implement?

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