An interview to the TV Tsentr network

10 February 2015

Correspondent: What is the programme of action behind the anti-crisis plan that the city Government adopted today?

Sergei Sobyanin: Over the recent weeks, we have actively worked with the Russian Government, ministries and agencies to ensure that our proposals are taken into account on the federal level. In addition to that, naturally, we defined our common priorities of the anti-crisis plan. We also worked with the city business community, large corporations, and signed a number of agreements with them. For example, yesterday we signed an agreement with RUSNANO on the joint development of technoparks and industrial zones. Today, an agreement will be signed with the Ministry of Industry and Trade on the development of Moscow’s industrial sector. This anti-crisis plan is not an exhaustive list of measures; it does not cancel the Government programmes that were adopted in Moscow: development and provision of amenities in the city, education, public healthcare, transit, and so on. They are the key drivers of the city’s economic development, modernisation, and the creation of a comfortable environment that we always needed, and even more so during a crisis.

However, the anti-crisis plan envisions additional measures along a number of lines. This includes social security, the development of small and medium sized businesses, and support for import substitution sectors. In general, this is about getting our priorities right — supporting construction, transport. There are also other measures that are of key importance to us. We see problems in particular sectors and we should respond to them promptly.

Correspondent: Let’s consider these areas in more detail. Perhaps I will not be wrong if I say that people are primarily concerned by problems related to the social sphere. Is the city prepared to take some additional support measures in 2015?

Sergei Sobyanin: Social support for Moscow residents is the city’s unquestionable policy priority. Furthermore, we see that there is a need for targeted support for a number of segments of the population who will be affected by the crisis more than others. These are the unprotected segments of the population, such as large families, people with disabilities and veterans. To this end, 1.7 billion roubles have been allocated from the reserve fund today in additional targeted support on top of the sums that the city has already provided.

We believe that medication supplies could become a problem area in the social sphere. This refers not only to subsidised medicines but medications in general, medical supplies for all healthcare institutions and organisations. We know very well that the greater part of these medications, medical supplies and equipment are imported. Factoring in the exchange rate difference, it is not difficult to see that we may soon witness a huge rise in the price of medications. However, we must not allow that to happen and so we are working with large suppliers, with domestic producers so that suppliers meet their obligations on the prices stipulated in our budget, including the state guarantees programme. Furthermore, we are proposing long-term contracts that will ensure the stability of prices on the market.

Question: Mr Sobyanin, what are the prospects for the labour market in Moscow? Will there be many people seeking jobs?

Sergei Sobyanin: Of course, when a crisis hits, there are certain categories of workers who are laid off. The sectors at risk are the service industry, the finance sector and a number of others; I think this is no secret. But the last crisis didn’t lead to a high unemployment rate in Moscow. The labour market is large and growing. Nearly 2 million people come to work in Moscow from the Moscow Region and other regions of Russia, while around 1 million people arrive from far abroad. I hope that jobs occupied by non-Muscovites will be gradually taken over by our residents. At the very least, we have been moving quickly in that direction in recent years.

We have replaced most migrants working in the housing and utilities sector by increasing the cost of their working permit. We have introduced a flexible mechanism which we can use to increase the cost of the foreign workforce and increase the market competitiveness of Russians as compared to foreigners. This is very important.

Question: What will 2015 be like for Moscow’s small and medium-sized businesses? For those that are active in the sphere of services and commerce? Will Moscow give them preferences? And will the much-complained-about administrative barriers be eliminated this year?

Sergei Sobyanin: The small and medium-sized business support programme is still being implemented in Moscow, we are issuing guarantees for businesses to be given loans. We preserved all the benefits, although there were plans to limit them or dispose of them entirely. But seeing the crisis unravel, we decided to keep the lower rates for city property rental, land plot rental and land tax. All these benefits were fully preserved. The problem often lies not in administrative barriers but in the lack of transparency of certain procedures.

We have worked a lot to reduce the cost of connecting to utility lines, which is crucial for small and medium-sized businesses. Today we are stepping up our cooperation with utility companies so that businesses don’t suffer from rising rates or some other projects of utility monopolists. This is very important.

But renting city property to small companies must also be transparent. As you remember, we had a number of intermediaries who made money on renting premises in underground passages, or renting street shops. Businesses had to pay huge amounts of money, high above the market margin. There were intermediaries between the city and companies. These shady schemes are becoming a thing of the past, ceding ground to a normal environment where small businesses can interact directly with the city to rent premises.

Correspondent: Even the federal Government is focusing on the import-substitution programme. How do you plan to implement it in Moscow, and what areas of city life will it influence, first and foremost?

Sergei Sobyanin: In my mind, it should, first of all, concern those goods that are in high demand in the city, including foodstuffs, electronics, microelectronics, engineering, pharmaceutics. It is very important to assess the potential of city enterprises for manufacturing these categories of goods. It is important to assess how the city influences this policy. For instance, we have signed a long-term contract for the delivery of metro coaches that will be produced at Russian companies, mostly using Russian-made components (90-95 percent). Up-to-date innovative railcars, as opposed to old-fashioned ones, will be delivered.

We want to accomplish the same in the area of medication purchases and medical goods, and we want to sign long-term contracts on manufacturing them in Moscow or the Moscow Region or anywhere else in Russia, if this is economically justified.

We have signed an agreement with the Rusnano Corporation on establishing an entire nanotechnology cluster in Moscow. We are cooperating with state corporations at their industrial zones in the city that need to be renovated, restructured, and whose production facilities should be modernised. We also suggest directly subsidising such sectors as microelectronics and innovation production. This is very important for Moscow which should not miss its chance.

Correspondent: What food-security measures does the anti-crisis plan stipulate for Moscow?

Sergei Sobyanin: This is a very important question because Moscow relies on substantial food imports, and domestic producers are sometimes inclined to raise prices. And, of course, we must closely monitor prices together with specialised agencies, the Federal Anti-Monopoly Service and the City Prosecutor’s Office. But it is even more important to ensure competition among agricultural producers from other Russian regions and foreigners on the Moscow market. In the past few years, we have signed direct contracts with suppliers in Azerbaijan, Kazakhstan, Turkey and Belarus. Moreover, the city posted somewhat lower price hikes than other major Russian cities, despite rampant prices, and we hope to preserve this trend. This can mostly be accomplished by ensuring competitive trade and supply.

Correspondent: City residents are already accustomed to large-scale road construction projects. Will this programme and transport reforms be modified to some extent during the current crisis?

Sergei Sobyanin: First of all, we will, of course, focus on construction projects that have already launched. We will monitor the budget, the situation with budget revenues and taxes, so as to prevent construction delays. In its time, Moscow had enough delayed construction projects, and, in some cases, we are completing projects that began five years ago. To prevent this, we will, of course, focus on unfinished projects that have already been selected during tenders or that have taken off. Nevertheless, we will preserve virtually all the selective investment programme, which will not be reduced by more than 10 percent. This means that, first of all, all of the programme’s main key parameters will be preserved.

Second, we used to implement an ambitious surface transit programme that stipulated a new system of city contracts for private transport companies. They should be guided by the same standards as the entire city transport system. I am talking about regular intervals and vehicle maintenance standards. Businesspeople would like to know what should be done at this time given the higher vehicle costs and bus prices, when loan interest rates and leasing payments have also considerably increased. We will support them by subsidising their leasing payments in order to continue upgrading city-owned and private vehicles.

Correspondent: Thank you, Mr Sobyanin.

Sergei Sobyanin: Thank you.

Sourse: The website of the Mayor and the Government of Moscow

See also
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