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President of Russia Vladimir Putin: Mr Manturov, the holiday period is over now and it is time to get back into the swing of daily work.

I know the Government has been hard at work on solving the issues related to Russia’s joining the World Trade Organisation. As was agreed, we need to put together a whole package of measures that will help individual sectors of Russia’s economy to adapt. I particularly asked you to pay attention to the light industry sector.

What do you propose in this sector, taking into account too, the steps we are taking in the  Background information Customs Union between Russia, Belarus, and Kazakhstan Customs Union and the  Background information Common Economic Space (CES) Common Economic Space?

Industry and Trade Minister Denis Manturov: Mr President, I have prepared a brief presentation.

At last year’s Security Council meeting we discussed in some detail the possible risks a number of industries would face following our accession to the WTO. Light industry is one of the most sensitive sectors in this respect. We paid particular attention to this sector in the state programme for developing industry and improving competitiveness that the Government Cabinet approved just before the New Year. The programme earmarks three times more money overall than was the case last year, and most of it will be spent on developing full production chains in light industry, subsidising between season stocks, and modernising equipment and technology. For the first time, there will also be state support for promoting products on the markets. This is the first time we have taken such a measure.

Light industry is a sector of great social importance in our country as it employs around 400,000 people, three quarters of them women.

We already have serious investors showing a lot of interest in businesses in this sector. A number of companies that are using advanced modern technology have already established themselves as leaders in their segments. These companies include Parizhskaya Kommuna, Donetskaya Manufaktura, Russkaya Kozha, and Dargez all of which are leaders in their segments – segments in which we have always had rich traditions and have quite solid potential today.

Vladimir Putin: What is the situation with raw material supplies?

Denis Manturov: We already harvested the first experimental cotton crop grown on 7 hectares in Astrakhan Region. The cotton is of decent quality. I took some to show what kind of cotton we got. It has already gone through its first technical weaving and the first fabric has already been made from it.

This is just the first step in ensuring raw materials supplies for our companies. At the moment we are getting all of our cotton from abroad. This will ensure supplies not only for our light industry companies but also for production of powders.

Our measures to support and develop domestic light industry follow three objectives. The first is to develop clusters, including in raw materials supplies, cotton and wool production. We are launching a project this year to produce our own wool with the involvement of companies based in the North Caucasus Federal District. We will use mostly Russian-produced wool.

The Government has been hard at work on solving the issues related to Russia’s joining the World Trade Organisation. We need to put together a whole package of measures that will help individual sectors of Russia’s economy to adapt.

The second objective is to ensure maximum presence of our light and textile industry companies in retail outlets. Their presence is extremely small at the moment. Together with the regions, the light industry companies, and the retailers, we are putting together measures that will ensure that our light industry products are on the shop shelves. The sales system is in the process of changing and is mostly focused on expanding possibilities for retail chains and big department stores, and so this objective is particularly relevant today.

As an example of the cooperation underway, we have the code of fair cooperation between light industry companies and retail outlets. This does not require any changes to the law. This practice already exists, in particular between foodstuffs producers and retail outlets. I think this principle will have positive results for light industry companies too.

We must improve the retail system, including by using new methods of retail trade through outlets belonging to large retail companies that will sell light industry and textile sector products at affordable prices. We need to promote Russian products, including by promoting our brands and our well-known designers such as Valentin Yudashkin, Vyacheslav Zaitsev and others.

Of course, public procurement contracts also play a big part in supporting domestic light industry. We have already taken steps in this direction and have the first results obtained from last year. The Government approved a resolution obligating our security and armed forces agencies to purchase Russian products and semi-finished goods. I hope that if the decision is taken to introduce school uniforms this will also provide indirect support for the country’s light industry and textile sector. 

Vladimir Putin: We need to think here because this would involve contract orders going through at the regional level. In this case it would come under public procurement contracts, and we can make an exception for such contracts under WTO rules. This is something we will need to reflect on. We need to get the legal side of the whole chain in order. 

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