An Educational Meeting: Putin and Deputy Prime Minister Dmitry Chernyshenko

Today, a very educational meeting took place that provides further evidence of how much planning and involvement Russian government at all levels exerts on Russia's economy and social settings. Such evidence further backs my premise that Russia under the leadership of Putin and many others are building a new and unique form of Socialism with Russian Characteristics that's far superior to the previous Soviet System and is being built based on People Centered Development, which can be described in several ways—I currently favor a moral-based Communalism that derives its strength from the three major isms within Russia: Christian Orthodoxy, Islamism, and Buddhism/Confucianism. What's also tapped and makes this system a hybrid/mixed economy is the inventiveness of entrepreneurship coupled with the “Mother of Necessity” driven by the sanctions. The other component is the demeanor of Russia's people as they can see the “state” working for and with them so they in turn work for themselves and for others, which in turn strengthens the state. I see it as similar to the symbiosis the Chinese and other cultures were able to generate to overcome, develop and modernize—the people pushed the state and the state supported and also pushed the people. Clearly a behavior unseen in Neoliberal settings corrupted by “crony capitalism” which is actually closer to a kleptocracy, or creditocracy.

And now for the transcript having the evidence for my above analysis:

Vladimir Putin: Good afternoon.

Dmitry Nikolaevich, by industry. More precisely, in terms of the industries you oversee. You are welcome.

D.Chernyshenko: Dear Vladimir Vladimirovich,

For us, your instruction to achieve technological sovereignty in science and technology is probably the most important vector of work now. I will promptly report to you on the results of two and a half years of Work by Mikhail Mishustin's Government in the areas entrusted to me.

First of all, digital transformation. I must say that, despite the geopolitical situation, the pandemic and other shocks, all the targets of digital transformation have been exceeded. You can look at the graphs, just here [in the presentation] it is convenient to see.

Most importantly, we see a significant increase in the share of mass socially significant services that citizens receive online, and in order for this to happen, of course, you need an Internet connection.

Vladimir Putin: [An increase in the share of socially significant online services] from 2019 to 2022 by a factor of 16?

Dmitry Chernyshenko: Yes, we are showing this on purpose that during the work of Mikhail Vladimirovich's Government, you assessed the progress that has been made.

Russia now ranks sixth in the world in terms of Internet accessibility. This is a very good result, and it allows us to fulfill your instructions on connecting socially significant objects to the Internet.

Vladimir Putin: Yes. Internet access – plus 12.4. And to socially significant services – [an increase] of 16 times.

Dmitry Chernyshenko: Absolutely.

Vladimir Putin: It's decent.

Dmitry Chernyshenko: At the moment, last year, the number of connected socially significant facilities has increased ninefold. This is almost 86 thousand FAPs, schools, hospitals, fire departments. We continue this work.

It is very important that we also work with small settlements, as you often told us at our meetings. This population is from 100 to 500 people. This is costly, but it is extremely necessary so that there is connectivity and citizens can receive services online.

If you look at the third part, just the implementation of your Executive Order, we have increased the number of accounts. These are the personal accounts of citizens – 99 million. In fact, this is all the adult, active population of our country, and they will receive, according to forecasts, almost half a billion services this year. And there are such interesting services: more than a third of all applications to the registry office are now submitted online. It is probably more important to say that our mothers received 600,000 payments of maternity capital on your instructions proactively, and they did not need to fill out any formalities and forms – this is very important.

Vladimir Putin: I know.

Dmitry Chernyshenko: I will report to you separately. Now, just during the mobilization, the portal has launched four new services that allow you to eliminate some shortcomings.

We have received such progress for a reason, you support this industry, and unprecedented support measures, and the effects of support measures – on the fourth slide – you see a very preferential income tax – 3 percent, and insurance premiums – 7.6 percent; exempted from VAT from software sales, preferential mortgages.

As you can see, the number of accredited companies has increased sevenfold, that is, 28,000 companies in 2022. This suggests that, of course, many, apparently, came out of the shadows, but many were also created, because we see that the number of IT specialists has increased – this is a million seven hundred. There are still not enough of them: we still have a deficit of about a million in these areas.

But now it is a huge community of very professional people, specialists who work at the world level and who are now given an important task. Every year, our companies, such as Russian Railways, KamAZ, Aeroflot, or the United Aircraft Company (they also worked on foreign software – an automated control system for production processes), spent about 200 billion rubles a year on licenses alone, and they gave them to foreign companies.

Now, on your instructions, Mikhail Vladimirovich has organised the work personally, because he is very deeply versed in these issues. More than 40 industrial competence centers have been created, which have united all these industrial partners, and they have chosen domestic solutions that can now be further developed so that they not only functionally correspond to the foreign software on which we are now working (and licenses have been stopped), but also surpass it. There is a very good export potential there. I will also report to you on this, because we will receive the first projects by 2024. This will be a very serious import substitution. It is the support measures that have allowed us to accumulate such potential so that this can be done.

And of course, information security is at the forefront, because the number of cyber attacks on Russia has increased by 80 percent this year. Moreover, if last year the main target of cyber attacks was the financial sector, this year the public sector.

25 thousand, even more, cyber attacks on state resources and 1200 incidents on critical infrastructure were successfully eliminated. It is clear that this struggle will always continue – cyber troops of all unfriendly countries are fighting against us. But it is very important that, on your instructions, cyber headquarters have been set up in all executive bodies, on the entire critical infrastructure. We continue to defend effectively.

Several fundamental information systems have been created for our country, which will determine the future of our digitalization. For example, a single biometric system – according to your decree. After all, in the past, randomly commercial companies collected casts, and citizens willingly gave them away in exchange for the fact that they could either enter some buildings or rent cars. Banks collected casts in order to open accounts and so on. They were stored in an unprotected form, often on servers that were not located on the territory of Russia. Now all of them will be in a secure Russian cloud and stored in vector form, which complicates the hacking attempt.

We are working, on your instructions, on the reunited territories.

First of all, of course, the restoration of communication networks. We set almost the same standard as for the whole country for the availability of multiplexes and radio channels. We have allocated capacities under the number +7 for phone numbers. VGTRK opens its branches there.

Most importantly, we are handing over ready-made IT solutions and IT technologies so that new territories can be connected to the public services portal and state information systems.

In the field of science, the achievements of our scientists and the indicator of the sphere of science is the world ranking - the ninth place.

Until now, the main source of money now for internal research and development is the budget. This is almost 1.4 trillion rubles. But we see that extra-budgetary funds are also growing. This parameter of extra-budgetary co-financing is probably the most important in the entire logic that I will talk about, because it reflects the very connection that we need between education, science and technological entrepreneurship. Because it so happened that earlier our entrepreneurs did not choose our technologies. They were not interested in ordering from our science, they could buy cheap Western technology and often introduced it.

We are now making full use of that potential. An important role was played by the holding of the Year of Science and Technology on your initiative, which, in fact, opened for our population through landmark events – and we held more than 6,000 events – our key achievements of modern science, which we were able to present to society. As a result, we saw that 82 percent of our citizens trust Russian scientists, and, very importantly, 78 percent of respondents would like their children to link the future with science and technology. This is a very high result. 56 percent are proud. We thank you very much for extending the Decade of Science and Technology, where the main focus now is on involving young people in science.

Probably the most important "spine" of creating a foundation for the entire science, of course, was your decision to create a new state program for scientific and technological development, which brought together 34 disparate state programs that were implemented by 54 participants (federal executive bodies and various state-owned companies) for a huge amount – 1.2 trillion rubles, which we have now consolidated. Now we have prioritised all this state assignment money in accordance with uniform rules that work for import substitution and import anticipation.

Because earlier, in general, they did the state task on various disparate topics, and now exactly what we need to replace, and exactly what we need now. In this we are actively helped by the Academy of Sciences and the newly elected President of the Academy of Sciences Krasnikov Gennady Yakovlevich, who is a great specialist, as they say, "from the plow". We have high hopes that we will now inspire new cooperation between the Russian Academy of Sciences and the Government.

Of course, as you said at the last Strategic Development Council, access to higher education is very important. On your instructions, we are constantly increasing the target figures for full-time admissions every year. At the same time, 75 percent is the share of the regions. The accessibility index is more than 56 percent.

Everyone accuses me of lobbying only for state-funded places in the digital economy. Indeed, we see an increase of 203 percent. But this, as they say, is a market request, a request for time. At the same time, of course, engineering and technological areas of training are also extremely important for us.

There are a large number of tools that have shown their effectiveness, which were launched on your instructions. These are the Program "Priority-2030" and advanced engineering schools. You visited Yaroslav the Wise University in Novgorod and saw how this school works.

I would like to draw your attention, as well as to world-class campuses and world-class national research and educational centres, to the extra-budgetary component. For me, the most important indicator is the confirmed amount of co-financing of high-tech companies, which suggests that they rely on our universities, on our scientific organisations, and they, in fact, as they say, vote in rubles. And you see that advanced engineering schools account for 12.7 billion.

The world-class campuses that you have commissioned to build by 2030, 25 campuses, eight are already in production, and now there will be a second wave of selection for the remaining launches. We have already received 39 applications from 34 regions. There's a lot of co-financing. More than half goes extra-budgetary. This means that business consciously invests in education and in the creation of the environment and expects that it will receive technologies, scientific discoveries from our science. Therefore, we are sure that science will not fail.

Vladimir Putin: Are these billions?

Dmitry Chernyshenko: Yes, these are billions.

Vladimir Putin: I also see good growth: it was 5.3, and now it is 106.4.

Dmitry Chernyshenko: Yes, that's exactly right. At the same time, they are ahead of their own plans, and, you know, it is very interesting: we laid the rotation, selected five scientific and educational centers, and now they are working for retirement. We have a very long bench, and every two years we check, and the one who is the worst in terms of indicators is replaced by the one who stands on the bench. Such competition works very well.

Of course, tourism. You have set the task of accelerating the development of infrastructure and increasing accessibility. We have a "young" national project, it was launched in May last year, less than a year and a half, with very ambitious goals. What's interesting? As you can see from the financing, we are increasing funding by almost 20 times, and the industry receives very serious investments not only from the federal budget, but also from the regional budgets that have also been attracted. In fact, a trillion on the horizon until 2024 is invested in the industry. This will allow us, of course, to create an infrastructure – most importantly – to which all services will be configured.

Very interesting figures, if you look at the domestic tourist flow, which we practically ...

Vladimir Putin: I just wanted to tell you that it is actually growing powerfully.

Dmitry Chernyshenko: Yes, pay attention to what: it used to be its structure – business trips overlapped leisure trips twice, now it has become the other way around, that is, leisure has doubled, and business has decreased for obvious reasons. We traveled a lot, including foreign tourists, to big cities: Moscow, Kazan, St. Petersburg. This will come back for sure, but the most important thing is that we have increased the tourist flow for the purpose of recreation and recreation.

We continue to increase the growth of the classified number of rooms in various ways – I will tell you later. We have grown 20,000 since last year.

Infrastructure is developing, as the Government is implementing very powerful support measures. These are preferential loans, participation in the authorized capital, and, most importantly, the construction of supporting infrastructure. These are the most irrevocable and heavy investments that our state makes.

All this united the participants of the industry. More than 200 thousand different companies. They now contribute more than 3 percent to GDP. We believe that the forecast for this indicator may reach ten. But, in any case, it is necessary to strive for it. In countries where tourism is the backbone of the economy, it provides up to 10 percent of GDP.

It is extremely important that the development institute "Corporation "Tourism.RF" was organized, which has already signed agreements with almost all subjects where there is a tourist potential, these are 51 subjects. 75 projects were selected from the "funnel" of 600 projects. The total volume of attracted private investment is almost half a trillion. This will allow only in this first pool of projects to get about 25 thousand new hotel rooms. Basically, these are "threes" and "fours".

Vladimir Putin: The most popular ones.

Dmitry Chernyshenko: Yes. This is the main criterion for the selection of projects.

And finally, sports.

Thanks to the national goal of preserving the population, health and well-being of citizens, where your instruction is to increase the proportion of those who systematically engage in sports to 70 percent...

Vladimir Putin: This is the most important task.

Dmitry Chernyshenko: You know, yes. Probably, the economy can be influenced much more than anything else, because when citizens live a long time and do not get sick, this is the most important thing.

As you can see, everywhere there is also an excess of fact over plans (which were in the column). Already in the first half of 2022, we have about 65 million people engaged, which is already 53 percent, and there is no doubt that we will fulfill the plan of 51.3 percent. So it will be as you instructed. We're moving.

The number of sports schools is increasing, and the number of people involved in sports in schools is increasing. This is a qualitative indicator. They focus on our stars, on those who show the best results in international competitions. You instructed us to be in the top three. As you can see, the Summer Games moved to third place, and the Winter Games to second place. These are also, in general, the results of the work.

In the fourth block, if you look at it, is the creation of sports infrastructure facilities. Mikhail Vladimirovich instructed us to complete all the facilities that were started, despite all the difficulties, especially those that are within walking distance. This year, another 70 facilities will be commissioned by the end of the year at the expense of the federal budget.

All this allows us, of course, to maintain competitive activity, because we need infrastructure so that this can be carried out. Despite the fact that the pandemic knocked us out in 2020, you see, we had only one number in the single calendar plan, and the pandemic reduced them. But now we are returning them, despite the fact that many international competitions, in fact, stopped us and did not give us the opportunity to participate in them. Thus, they greatly impoverished their competitions and punished themselves.

Vladimir Putin: That's for sure. But you manage to organise good starts within the country, of course, with our partners.

Dmitry Chernyshenko: Thank you very much.

Yes, indeed, if you look, we have made a good analogue of the Spartakiad of the Peoples of the USSR, which until 1991 was actually a powerful alternative to the Olympic Games.

Vladimir Putin: Yes.

Dmitry Chernyshenko: The All-Russian Spartakiad among the strongest athletes was held. The most important thing is that thanks to Mikhail Vladimirovich, we were able to provide them with prize money at such a level as at the Olympic Games, at the World Championships, because this is extremely important for athletes.

There are new formats of international sports competitions, which I will report to you separately. This is primarily the Games of the Future, a new project that will be held in Kazan in March 2024. This is a youth tournament of cyber and technical sports. This has never happened before in the world.

Also within the framework of your proposal is the creation of an association of sports organizations of the SCO. You see the number of participants, the potential audience of the population involved is 4 billion people, this is our future, and not the segment that the International Olympic Committee serves – about a billion. It's a shame, of course, but I think it's going to go back to normal.

The most important thing is the development of physical culture and sports in the reunited territories. We are working, we helped the guys – almost 800 athletes – to continue their competitive practice. Now we are restoring the sports infrastructure in Mariupol "Illichivets", "Azovmash", swimming pool "Neptune", in Donetsk the sports palace "Druzhba". We have agreed with the Russian Football Union that we will integrate new territories into our regular football championships. Therefore, all this is being done to make all regions feel like full-fledged Russian participants.

Vladimir Putin: The sports infrastructure in these regions is in a deplorable state, isn't it?

Dmitry Chernyshenko: Basically, yes. Unfortunately, it was destroyed by a long war and the blows that Ukraine inflicted on them.

Vladimir Putin: How long do you think it will take to restore them in the right and proper quality?

Dmitry Chernyshenko: Because Marat Shakirzyanovich [Khusnullin] He is dealing with this issue, our construction is concentrated in his supervision, there is no doubt that he will do it as soon as possible. We see the pace at which construction is being mobilized there.

Vladimir Putin: All right.