Trying to get them to lay off sanctions . You are stringing a bunch of things along. Let us see if we can have a question . That is a lot less than henry had. [laughter] i thought we were trying to get along. [laughter] how about i separate out the iran question from the Health Care Question . On the Health Care Question, i think i have answered several times this is a new iteration of it. Bottom line is that we are going to continue to work every single day to make sure that implementation of the Health Care Law and the website and all elements of it, including the grandfather clause, work better, every single day. As i have said in Previous Press conferences, we are going to make mistakes. And we are going to have problems. But my intentions have been clear throughout. I just want to help as many people as possible feel secure, and make sure they do not go broke when they get sick. We are going to keep on doing that. On iran, there is the possibility of a resolution to a problem that has been a challenge for American National security for over a decade. And that is getting iran to, in a verifiable fashion, not pursue a nuclear weapon. Already, even with the interim deal that we struck in geneva, we have the first halt, and in some cases some rollback of Irans Nuclear capabilities. The first time we have seen that in almost a decade. And we now have a structure in which we can have a very serious conversation to see, is it possible for iran to get right with the International Community in a verifiable fashion, to give us all confidence that any Peaceful Nuclear program that they have is not going to be weaponized in a way that threatens us or allies in the region, including israel . As i have said before and i will repeat, it is very important for us to test whether that is possible, not because it is guaranteed, but because the alternative is possibly us having to engage in some sort of conflict to resolve the problem, with all kinds of unintended consequences. I have been clear from the start i mean what i say. It is my goal to prevent iran from obtaining a nuclear weapon. I sure would rather do it diplomatically. I am keeping all options on the table. I would think that would be the preference of everybody on capitol hill, because that sure is the preference of the american people. And we lose nothing during this negotiation, precisely because there are verification provisions in place. We will have more insight into Irans Nuclear program over the next six months than we have previously. We will know if they are violating the terms of the agreement. They are not allowed to accelerate their stockpile of enriched uranium. In fact, they have to reduce their stockpile of highly enriched uranium. Ironically, if we did not have this six months in which we are testing whether we can get a comprehensive solution to this problem, they would be advancing even further on their nuclear program. It might of all that, what i have said to democrats and republicans is, there is no need for sanctions legislation. Not yet. If iran comes back and says we cannot give you a assurances we are not going to weaponize, if they are not willing to address some of their capabilities that we know could end up resulting in them having breakout capacity, it is not going to be hard for us to turn the dials back, strengthened sanctions even further. I will work with members of congress to put even more pressure on iraq. Iran. But there is no reason to do it right now. I am not surprised that there has been some talk from some members of congress about new sanctions. I think the politics of trying to look tough on iran are often good when you are running for office. Or if you are in office. But as president of the United States right now, who has been responsible over the last four years, with the help of congress, in putting together a comprehensive sanctions regime specifically designed to put pressure on them and bring them to the table to negotiate, what i am saying to them, what i have said to the International Community, what i have said to the american people, is, lets test it. It is the time to try to see if we can get this thing done. I have heard some logic that says, well, mr. President , we are supportive of the negotiations, but we think it is useful to have this club hanging over irans head. We still have existing sanctions in place that are resulting in iran losing billions of dollars every month in lost oil sales. We already have banking and financial sanctions that are still being applied, even as the negotiations are taking place. It is not as if we are letting up on that. I have heard arguments that this way we can be assured, and the iranians will know, that if negotiations fail, even new and harsher sanctions will be put into place. I do not think the iranians have any doubt that congress would be more than happy to pass more sanctions legislation. We can do that in a day. On a dime. But if we are serious about negotiations, we have to create an atmosphere in which iran is willing to move in ways that are uncomfortable for them, and contrary to their ideology and rhetoric, and their instincts and their suspicions of us. And we do not help get them to a position where we can actually resolve this by engaging in this kind of action. All right . Ok, everybody. I think i am going to take one more question. Colleen mccain nelson, and that is it. Thank you, mr. President. A lot of longtime advisers are leaving the white house. New advisors are coming in, or taking on new roles. As you reshape your team, how does that impact what you think you can accomplish, Going Forward . I just had lunch with pete, who is leaving the. That is tough. Not right now, at least. I love that guy. That will be a significant loss, although he will still be in town, and hopefully i will be able to consult with him on an ongoing basis. I think jonathan, coming in, will be terrific. He may deny it, but i have been trying to get in him in here for some time. He ran my transition office. At that time, i think he was still feeling he wanted to develop other organizations. John is a great strategist. He is as good as anybody on domestic policy. And i think he will be a huge boost to us and give us more bandwidth to deal with more issues. I suspect we may have additional announcements in the new year. There is a natural turnover that takes place. People get tired. People get worn out. Sometimes you need fresh legs. But what i can tell you is that the team i have now is tireless, and shares my values, and believes the thing i think i have repeated four or five times in this press conference, which is, we get this incredible privilege for a short time, to do as much as we can for as many people as we can, to help them live better lives. And that is what drives them. That is the sacrifice they make, being away from families, soccer games, and birthdays. Some of them will end up working over christmas on issues like iran. The fact that they make those kinds of sacrifices i am always grateful for them. If they say to me after making those sacrifices for 3, 4, ive years, i need a break, then i completely understand. All right . Have a great holiday, everybody. Appreciate you. Merry christmas. Happy new year. [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2013] what is ahead today on cspan. Next, russian president fundament couldnt delivering his annual state of the nation address in moscow. Mccain talks about the evolving financial and political situation in ukraine. The constitution has put together to fundamental priorities. Rights and freedoms of the individual and a strong state, i their mutual obligation to respect and protect one another. The constitution must be stable. This pertains to the rights and freedom of the individual and the citizens. These provisions of the fundamental law are invaluable. Life is not stand still and the constitutional process should not be seen as completed and void of life. Small adjustments of other chapters of the fundamental law that are based on Law Enforcement practices, on life itself, are possible and sometimes necessary. As you know, there are plans to make amendments to the constitution, whereupon the Supreme Court and the high business core will be consolidated. Often, these courts interpret laws differently and sometimes quite differently and make different regiments on similar cases different judgment on similar cases. As a result, there is legal uncertainty. Sometimes there is injustice that reflects on people. The consolidation of these courts will turn Court Practices into a single work and will strengthen the guarantees that the most important constitutional principles, equality of all before law, will guarantee that the constitution presents the key, national ideas. We must support the aspiration and increasing aspiration of the citizens and Political Parties to participate in the life of this country. We must support citizen engagement. People will have an opportunity in managing their municipality or city in dealing with the everyday issues. There are many issues in the system of local government and the scope of responsibility and the resources for municipalities. Regrettably, as you very well know, they are not balanced. That results in confusion with authorities. As a result, there are often corruption scandals. The powers and area of education, Public Health, and social protection of the population have been devolved in the region devolved in the regions. In this regard, i am speaking to the old Russian Council of local government, members of the federal assembly, and the government of the Russian Federation. Let us revisit these issues to bring the situation in line with common sense with the requirements of the times. I believe clarifying the general principle and creating a strong, independent and financially sustainable authority locally is a key task. This is something we must start doing and to provide legislative framework for in 2014. This will mark the 150th anniversary of the reform. It was the local government that allowed russia to make a breakthrough and find the ability to productive large progressive reforms. Were all interested through the mechanisms of elections, well prepared, ambitious and professional individuals come to this institution of power. We will continue to work on legal competition, improving Political Institutions and providing an environment for them to be open. Recent elections have shown that political life in this country is less bureaucratized and the results are much less predictable. I believe that many new parties have made themselves heard by winning seats in municipal and regional legislatures and they lay down a Great Foundation for their involvement in future role federal future federal a lot campaigns. They will be strong campaigners. Russia needs a broad public debate that will bring about practical results where public initiatives become part of the governments policy and society oversees their execution. I believe that all of these are key government decisions that should go through the zero reading or public reading with the participation of nongovernmental organizations and other institutes of civil society. Public councils might be mostly setup up at the federal and regional bodies of the executive. They already exist in some of the bodies, and what is important is that they must not be a formal and decorative entity, they should act as experts and be active participants in the system that is fighting corruption. A public framework should be created. I am asking the chamber, the council on human rights, and other organizations to continue to draft the law on public oversight. One of the priorities in the joint work of society and states should be the support of human rights organizations. We hope that such organizations would be free of pursuing political agendas so that there will be focusing on the interests and problems faced by the individual. In this regard, the role of the Senate Chamber is growing. It should become a forum where the interests of various groups and associations will be expressed. There should be more professionals. I should account for at least half of the members of this civic chamber. [applause] that approach would ensure a balance of interest of social and professional groups and will take into account issues and challenges they face on a fuller scale. How important subject that requires a public debate is interethnic relations. This is where many of our problems and a source of economic and Territorial Development are concentrated. Including corruption and flaws in the operation of the government institutions. There are setbacks in the educational policies was often leads to a distorted understanding of the true reasons for interethnic tensions. This is something that is not by representatives of certain nations. This is more international that comprises both certain natives of certain southern parts of russia who have cut themselves loose and corrupt Law Enforcement personnel who provide protection for ethnic mafias and all kinds of separatists. We must meet this challenge together. We must protect interethnic peace and therefore the unity of our society. The unity and integrity of the russian state. [applause] dear colleagues, in the may 2012 decrees, specific measures were identified that were designed to ensure Dynamic Development a la the areas. In all of the areas. Those decrees provided a Single Program of action, accumulating the willpower and desires of millions of people. The aspiration of russians people of russias people to a better life. Often times one hears there is not enough resource and funds. It implements plans to bring the bar down to simplify the tasks. Dear colleagues, i am now embarking on an important and responsible subject. I do not believe that we are built on a printable. On a formal principle. The Economic Situation may change and is changing, but this is not an excuse for revising our goals. One needs to do actual work and to look for solutions and to set budget and other priorities property properly. I suggest all Government Programs be brought up to speed within the next two years. The budget of all levels should be switched to problematic printable. That does not mean everything should be written in a mechanical way. It means that every executive should be made personally responsible for achieving results. Resources should be used to achieve changes in specific sectors and industries. We are increasing salaries and education and Public Health so that the work of teachers and physicians will become prestigious once again. It will bring in quality. However, as we agreed, this should not be achieved only through budget infusions, but due to reform that are intended to increase the effectiveness of the census. People will see how the schools and universities, hospitals, Outpatient Clinics are working better and better. As salaries are increased, something that must be done, an entire set of other measures needs to be implemented so that all of the goals will be achieved. What kind of measures . An effective contract, a valuation of experts, and implementation of financing. Social development of competition, the opening up of the budget sphere to nonorgan it is also optimization of the budget ended due to a reduction of ineffective expenses and the removal of barriers for budget institutions to achieve independence. Where are all of these measures . 18 months have passed since the may 2012 decrees. Either things are done in a way as to invite negativity in society or nothing is done at all. We will not reach the goals set if we keep working like this. As a result, individuals are not feeling radical changes. We have been allocating resources, but unless reforms are conducted, quality will not increase. Only effective expenses will increase. This is what is happening in this is what i want the federal authorities and the executives of the reasons of the Russian Federation to Pay Attention to. An important task is to create a system of independent evaluation of the quality of social services. This will help link their financing to the results of the work and therefore effectively optimize the budget network. There is a need for direct action, legislation that will determine unified approaches to standards and criteria, as well as the obligation of all the levels of authority, in terms of creating a system of independent quality and evaluation of the quality of social services. This law must be adopted during the spring session. This is my request for you, dear colleagues. We have been able to do a lot to improve the Public Health system lately. There are now fewer deaths as a result as of cardiovascular and other endeavors. And other diseases. Life expectancy has increased. However, we are still not close enough to the ratio that we have established for ourselves. The basic question is a real transition to the insurance based danceable and Public Health. Principle to Public Health. The goal is such that the insurance principle must work so that the individuals will feel responsible for their own health, so there will be financial incentive for people to engage in a help based in a healthy lifestyle, whereas Insurance Companies would be interested in medical establishments providing quality medical services. It would monitor this and evaluate their operations from the financial perspective so that patients who have an opportunity to choose those medical establishments. The system of mandatory medical insurance should, to the fullest degree, secure government guarantees for free medical assistance. Patients must be able to know what kind of assistance they are entitled to for free, whereas physicians must understand the principles based on which their work is paid for. Starting in 2015, all children and teenagers must annually undergo medical checkups, the same for adults, except it is only once every three years. Clearly, during regular medical checkups, the need for hightech medical assistance will increase. Over the last two years, we have set up a network of federal centers and supported bills that exist in the Capital Cities and created a new federal workcenter that are capable of providing Medical Center assistance at the most advanced level. We must maintain and boost their potential. Centers must be available for those who live in the cities where they are located and also to individuals from other parts of the country. Financial sources must be provided for that. The hope within the next three years, we must create an environment so that 50 more hightech surgeries will take place than now. It is an achievable goal. We must not lag behind international trends. It will be a revolution in medicine. We are decoding the human genome. Indeed, it will be a revolution in medicine. The Public Health ministry and the academy of Sciences Must place priority on research in the medical area. The role of the professional community in managing the Public Health system must be increased in a serious manner. I know that there are ideas that have been articulated. I am asking the Public Health ministry to work with the eating associations of medical personnel to provide specific proposals. I believe that the traditions of charity should be reinstated and i suggest setting up a system of volunteers and russia. I believe that volunteers have spent a few years working in medical establishments must be given an advantage as they enroll at medical schools. [applause] dear colleagues, the incoming 2014 has been declared the year of culture in russia. It is intended to become a year of true educational activities and going back to our Cultural Roots to the matter of patriotism and morality. We are aware of the unifying role of culture history and the russian language for our multiethnic people and given this, we must form the policy, including the education area. We do not need schools that teach, but schools that build character of citizens of a country that have made its values, history, and traditions their own. Individuals with a wild world outlook. A wide world outlook. People of high anarcho culture, capable of independent and creative thinking. Instruction has been provided. Starting next academic year, compositions will be written by those in the graduating form. Naturally, those results should be taken into account as individuals enroll in Higher Educational establishments, along with a uniform state exam. Of great importance is the professional growth of the teachers. I am asking that a complex, comprehensive program be prepared to update the schools. I know that the Education Ministry is already doing it, including the development of a system of continuous preparation and including the qualifications of teachers. There is another problem that needs immediate attention. There are two chips ships. Two shifts at many schools. Almost 50 operate in a to shift basis. In the next five to six years, thanks to the demographics, the number of schoolchildren will increase by a million. I am speaking to the government, the federal assembly, the regional authorities. The scope of this challenge must be evaluated and Ineffective Solutions must be found, including kindergarten must be built in such a way that they can be used as preschool establishments. This must not result in more expensive kindergarten projects. Schools and kindergartens can be built under the same roof in the same building. I understand this is not something the federal authorities or regional deal with, but we must understand the scope of this. We cannot brush aside. Brush it aside. It has such vast importance for this country and acquire such a shape. I believe federal assistance will have to come in. [applause] of course, we must continue to build up the infrastructure of a mass scale force activities for children and teenagers. Sports activities for children and teenagers. Everything must be done to enhance the prestige of an active lifestyle. This is the main idea of Successful University gains and the Olympic Games in sochi. Those will start very soon. I am sure the Olympic Games in sochi and the Winter University games will be held at a high level. Dear colleagues, according to the statistics, in january through october of 2013, russia recorded a natural increase in its population. This is the first time this has happened since 1991. This is great news. [applause] birth rate has exceeded death rate in almost half the constituents and it is of the Russian Federation. Virtually everywhere in siberia and in most regions in the far east, the birth rate is higher than the average in russia. Another thing must be understood. Those born in the 1990s are beginning to build their families. In the 1990s, the decrease in the birth rate was not as profound, it was catastrophic. Special efforts need to be made so that the positive demographic trend be made irreversible. I should say that one of the best birth rates was achieved in this country in the late 80s. I will say that one of the one of the best birth rates was achieved in this country in today, the housing policies must once again become one of the key factors of democrat demographic development. Weve addressed the issue of building affordable housing. The plan is to build at least an additional 25 million square meters of housing. Middle income families can improve their housing conditions. I suggest this program be called housing for the russian families so that attention can be focused on this challenge. On the whole, across this country by 2016, the 75 million square meters of housing must be overcome, which would be higher than the recordsetting 1987 number, which was 72. 8 million square meters. Modern Technology Makes it possible to build a lot of housing relatively inexpensively and with good quality. Several challenges must be tackled. Above all, all of the amendments must be made to the legislation that would unblock the process of rezoning land for development for housing. This should be done within the next few months. We have been discussing this subject and over the last few weeks, we have repeatedly revisited the subject. Local governments will be required to auction off all available land for development through transparent and clear procedures. The responsibility of developers should enhance as well. The next barrier that is creating difficulties for construction is the lack of funds for utility infrastructure and special instrument must be created to deal with this issue. I know that the initiative of the fiscal authorities, the government is preparing proposals to streamline internet trade. That could be one of the sources of funds for developing the utility infrastructure. I suggest proposals be made to that effect. The house must be set in order as far as the current procedures. They have not been unified. I am asking to come up with a single, exhaustive list of permits for construction to reduce the amount of time required for these procedures and to do it before the end of march 2014. Colleagues, understand perfectly well why this is happening. It is a highly corrupt area. That is where the trouble lies. Dear colleagues, we understand that the basic condition for dealing with social Development Issues is the resumption of a stable, economic growth. I am transitioning to the core of all of our work. Yes, of course, we are experiencing the consequences of a global crisis, however, it must be said that the key reasons for the slowdown are domestic. They are not external. As far as the gdp, russia is in the worlds top five economies. As far as productivity, we lag behind the International Leaders by a factor of two or three. Or three. This gap must be overcome asap. New Development Drivers must be activated. Everyone knows what they are. High quality of professional education, a flexible labor market, favorable Investment Climate, and modern technologies. I am instructing the government to adjust the promising avenues of development of science and technology and based on those priorities, the Russian Research foundation must build its work. The foundation that was established recently, it is called upon to focus on the funding of fundamental research and programs with a long rise horizon. You all voted for the law based on which the Russian Research foundation will establish. Was established. I suggest all factions of parliament send their representatives. As far as applied research, this effort must focus on the bases of technology for platform. I suggest reorienting the funds of targeted programs, above all, the Program Research and development in the Priority Areas of the built up research and technological complex. Also, the principle of cofinancing of projects by the government and the business must operate and be active. Out of 265 scientific results, on average, only one becomes an item protected by law. Value added by intellectual property being traded in russia, it only accounts for one percent of the gdp. That is very little. In the u. S. , the ratio is 12 . In germany it is between seven and eight. Therefore, technological platforms should target specific results. Obtainment of patents and licenses. We must create a domestic demand. This is an important circumstance. For these purposes, investment programs must be used. We are talking about gigantic amounts of money. Lately, activities have been fragmented and they are dealing with a multitude of projects that are not connected among themselves and are not based on innovation and not related to innovation. This is not what we built those institutions for. The projects may be good, but the institutions were not created for that. They were created to support an innovationbased economy. They have to be retargeted to achieve technological breakthrough. The economy needs to be cleansed of old and ineffective technologies and a modern system of technical and environmental regulations should be created and set up to operate flawlessly. It is a complex and sensitive issue for the economy. I believe the government, jointly with the Business Community and our colleagues in the Customs Union will perform this work properly. We need to have an objective rate of our competitiveness. During the soviet union, a system like that existed has been removed and nothing has been built on its paces. It needs to be reinstated. There should be support for non commodities exports. There are many administrative barriers. In canada and south korea it is eight days to obtain a permit. All these things need to be taken into account in the new growth map. I am asking the government to devise a the first of 2014. Standards should set requirements, but theyll only work if there demanded by the Business Community itself. Therefore, their preparation must go on with the involvement of professional communities themselves. I suggested that a National Council of professional skills be set up and not one under some kind of an agency, but as a truly independent authority and this work should be contributed to by leading business professionals and associations. Over the next two years, this board should approve the entire package of new professional standards and i am asking our colleagues from the Business Community to not avoid doing this work. It serves your interests. The entire system of professional Education Needs to be readjusted so as to match the requirements of those centers. A great deal can be borrowed from our own experience. What do i have in mind . This is the restoration of a professional orientation during School Education and the work of higher technical establishments that used to be billed on the basis of Major Industrial facilities. The most important principle is to train people in a realistic production environment where theory confirms practical skills. I would like to say a few words about Higher Education. Most young men and women seek Tertiary Education. The quality of universities and institutes must match this demand. Only then, the young peoples educational drive will emerge as a major incentive for national development. However, in the Capital Cities and the regional cities, there are many Higher Education establishments that do not meet modern requirements. I believe that if we are going to upgrade the system of Higher Education, we need to take advantage of the potential the best Tertiary Educational establishment so there graduates will be in demand. Society will receive actual results. No barriers can be created for educational mobility of our citizens. This concerns payment for student dorms. The prices should not be arbitrary. They should directly depend on the conditions of the environment and services provided. I am asking the ministry of education and science and the relevant authorities to oversee the situation rigorously. I want the president s of the universities to Pay Attention to this. Soon, the outcome will be that the finance ministry will take into account your revenues and will reduce the relevant ratios. You will see that it will happen in both education, the students, and the establishment themselves will suffer as a result. We must increase the export of Quality Educational Services and create an environment for both foreign citizens and our citizens to be educated in russian Tertiary Education schools. This is a serious instrument of increasing russias cultural and intellectual international influence. Also, it is time to work through the matter of setting up setting up areas for conducting the unified state exam for russia standards. In some countries, based on russian language centers, such exams should take place at the same time when the unified when the uniform state exam is taken at our schools. This should enable talented young people from cis to enroll in russias institutions. And law needs to pack we passed to boost longdistance education. That needs to target russians and cis citizens. The labor market is becoming increasingly flexible. The individuals must be able to retrain and upgrade their training and conditions need to be provided for those who are willing to move to another place of work, another city, another region. This needs to be done given the goals of Territorial Development and by attracting the Business Community. Information support needs to be given to people, including creation of a federal vacancy database so that everybody can see what part of the country he or she can find a good job in. A large set of solutions is needed here. I am asking that it be devised and that would include rental housing. It is a long list. It needs to be prepared as soon as possible. An important goal is to raise the appeal of rural areas for both life and work. A lot of money has been invested in boosting the equibusiness. We have been able to provide ourselves with domestic goods to a large extent. A big thank you to the citizens and residents of the rural areas. We have to make sure that people can stay in rural areas so they can rely on a modern and comfortable infrastructure. I am asking that special attention be given to changes in the Governments Program for developing the equibusiness. Single industry towns this is a difficult legacy. Over 15 Million People live in these kinds of towns. Many of them are in difficult situations. They do have a social infrastructure and housing, professional caterers. One needs to see what businesses lacking from those towns and cities and what kind of preferences we need to create. I think we will be better off doing it now rather than have to spend dozens of billions of rubles in employing such individuals from the budget. Proposals need to be provided as far as Overall Development of single industry towns. Investment projects need to involve ways of proposed financing and ways of reducing tension at the labor markets. Including to the smes. We are aware of the status of budgets. We cannot live in the here and now repeatedly. The idea has been voiced. All regions of this country can provide two year tax holidays for new Small Businesses that operate in the production of social and scientific areas. [applause] probably not all of the governors are applauding, but tomorrow, it will result in an additional revenues for the treasuries of the regions and municipalities. These are new companies, they do not exist as yet, and therefore they will not be there will not be missing budget revenue. On the contrary, if we create an environment for such companies, such revenue will appear. In addition, there should be an opportunity given to Small Businesses and selfemployed individuals to pay taxes based on the one window principle. These need to be consolidated and brought into one location so they can be paid on time. Another problem has to do with the status of the legal market. Labor market. The lack of order structural employment, but creates imbalance and promotes National Conflict and makes for a worse criminal situation. We need to streamline the hiring of foreigners who come to russia on a nonvisa basis and to increase responsibility of employers for using the labor of foreign employees. If they live in russia and take advantage of the Health System and education systems, a must they must pay taxes and make other payments. We have difficult challenge to meet. We cannot break and sever our special relationship with the former soviet union republics, but the house ceased to be set in order. Needs to be set in order. Changes need to be made to the effective patent system. My suggestion is that legal entities also have an opportunity to hire foreigners based on a patent. The price of the patents would be determined by the constituent entity of the federation, depending on a situation at the Regional Labor market and on the average income level of the population in that territory. The system of patents should be differentiated and incentivize. Once again, the patents should only be valid in those parts of the Russian Federation where they are acquired. I believe if this work is organized properly, it will be an economic tool to regulate migration flows. It is an economic tool. I am referring to the value of the patent in different parts of the Russian Federation. There should be more control over the purposes whereby foreign citizens enter the Russian Federation. The government needs to know for what reason and for what period of time. As a result of not doing that, we have foreigners who come to this country on a nonvisa basis and they stay in russia without a specific goal. They probably do have a specific goal, but the government does not know what that goal is. For violators, they will be banned from entering russia, depending on the gravity of the violation from three to 10 years. It would create additional barriers for foreign citizens who engage in shadow activities or criminal activities, or operate or work illegally in inhumane conditions and become victims of crime. Dear colleagues, two years ago, with the Business Community, we started a systemic effort to improve the Business Climate in russia. Results have been achieved are very good results. We do have those results. We have to keep making progress. By 2015, there should be a Legal Framework in place that makes to doing business that makes doing business in russia a favorable proposition. Next year we will start ranking nationally, the Investment Climate in different parts of russia, essentially we will become a mechanism for evaluating the implementation of the entrepreneurial initiative. At the same time, we have to create incentives for those regions that are building up their economic basis for those who support the Business Initiative and creation of new Production Capacity and jobs. I will now say what is very good news for executives of the regions, i believe that if a region is investing its own funds and creating industrial and technical business incubators, additional federal taxes over the course of three years will be paid by companies located there must be returned to that particular city. [applause] please Pay Attention to the extent of the regions expenses on creating infrastructure for such sites. Nothing funny about it. It is a good proposal. It is the result of a very long and difficult debate with the finance ministry. I am asking the minister of finance to not erode these agreements, im asking them to Pay Attention to and implement it. This remains an important subject for entrepreneurs. There should be oversight, but the principles of the operation of supervisory authorities need to be continued. The work needs to be continued and to increase transparency in this area, a unified federal website should be set up so that each inspection be individually numbered so that we can see who initiated it with respect to what the motivations of the supervising authority was and what results were obtained as a result of this. We need to increase the credibility of our arbitration. I am asking the government with the chamber of trade and commerce to quickly draft and submit to the state legislation on radical changes in the arbitration proceedings. Last year, i spoke about the authorization of the economy. This is another subject to which i would like to Pay Attention to. I believe this must be revisited. Results are so far fairly noticeable. I am reminding you of a large scale transaction that took place this year and was worth over 2 billion. Billion, the sale of interest in tmkbp. The sellers are well known and the buyers are wellknown, it is one of the largest russian companies. In expert estimates, russian goods worth 111 billion went through offshores and semi offshores last year. That is 20 of our exports. Half of our 50 billion of russian investments in other countries was also accounted for by offshores. Hiding behind these numbers is the flight of capital. Capital that should work in russia. Nothing has been done over the last year in this area, i have suggestions. Revenues of companies that are registered in offshore and have offshore beneficiaries must be based on our tax rolls. Taxed based on our tax rules. Tax payments must be paid to the russian budget. We must think of a system that would collect those moneys. By the way, those methods do exist and there is nothing unusual about it. Some countries are already implementing this scheme. If you want to operate in offshore jurisdictions, be our guest, but bring your money here. These things are being done in advanced economies. This scheme works just fine. Further on, companies registered in foreign jurisdictions will not be allowed to take advantage of Government Support measures. Also, such Companies Must not be given access to performing government contracts and contracts for entities with government Participation Co owned by the government. In other words, if you want to take advantage of benefits, Government Support, and earn a profit while working in russia, be registered in a russian jurisdiction. Incorporate yourself in russia. The openness of the economy needs to be enhanced and provision of knowingly incomplete, inaccurate information about the real condition of banks, Insurance Companies, and other financial entities is something that needs to be criminally prosecuted. Their executives need to be criminally prosecuted and a principal and firm line needs to be carried off to get our lending and Financial System rid of all kinds of laundries. Doing so, the interest of good faith customers and depositors of problem banks need to be detected. Fighting the erosion of the tax basis, fighting offshore schemes is an international trend. The things are being discussed by g8 and g20. Russia will conduct policies internationally and domestically. This concerns not only private business, but also executives of government controlled companies and institutions. I am asking the government to change their operating principles. There should be no areas of managerial comfort. They receive great salaries. We will not achieve a measure affect on the economy if we cut everything off for them. We will not be able to attract properly qualified personnel. Control over the work must be set up and set up properly. All such entities should address their own longterm strategies and clearly set goals and ratios of personal responsibility of the senior management. A labor contract needs to provide for responsibility for failure to perform goals assigned. Programs of companies on the list of Strategic Company should be approved by the government federation. I looked it up yesterday, we are talking about several dozen companies. A list of Strategic Companies only contains several dozen companies. It is an additional burden for the government, but i hope the government will be a up to the task. This is our National Priority for the entire 21st century. The challenges to be met are unprecedented in scale. We already made a decision to provide a preferential profit tax rate and other tax benefits for new investment purchase and the far east. Projects in the far east. I believe it makes sense to expand this regime to entire east siberia, including and the far east and eastern siberia, i suggest a network be set up a special territories with Fast Economic Development with special conditions. Oriented among other goals to export products. New companies located in such areas and such zones need to have, and this is what is being proposed, fiveyear long exemptions for profit tax, m. E. T. Tax, the tax on land, property, and that is important for hightech production. Easy rates for insurance contributions. What is also important, conditions will be created to conduct business that is going to be competitive with the key Business Centers in the asia pacific region. Including the issuance of permits for construction being connected to the power grid and customs clearance to solve the natural infrastructure and such territories. We will take advantage of the capabilities of the far Eastern Development foundation. A decision needs to be made where such territories will be set up and all of the necessary bylaws required for the work need to be issued. Given the scope, i am asking the chairman of the government to personally supervise this effort. We will make a decision on their future Development Based on the practices and experience of operation of such territories. We will carry on the projects that are being implemented. A new university has been built and is is to set up for found profound scientific expert review of Development Programs of the far east and to provide personnel to the region in such areas as space, robotics design, engineering, and the use of resources. I am positive that if russia were to turn its face to the Pacific Ocean and if it were to develop all of its eastern territories, it would open new opportunities in the economy, new horizons, and provide new additional instruments for conducting an active foreign policy. Global development is becoming more and more controversial and dynamic. In these conditions, russias historic responsibility is increasing as a key guarantor of stability and as a country, a state that consistently upholds its value. Including international relations. The intensity of the economic information competition is increasing, not decreasing. Other influence centers are keeping a close eye on the strengthening of russia. We have been proud of this country, however, we do not lay claims to being a superpower, claims that would be understood as claims to being a global or regional hegemony. We are not encroaching on anyones interests. We are not imposing or trying to teach anyone how to live. We will seek to be leaders, protect national law, Seek International law, seek respect for sovereignty and independence and self identity of the peoples. This is inexplicable for a country like russia. It is many centuries of not so called tolerance , sexless and sterile, but harmonious existence with many lifestyles in a single state. Today, many are erasing traditions and society is required to recognize not only everyones right to religious freedom and religious views and privacy but also to obligatorily scrutinize the parity of the strangers that may seem evil and good. These are notions that are contradictory, essentially. This obstruction of traditional values from above not only has negative consequences for society but is antidemocratic, because it is being conducted based on abstract, vague ideas despite the will of the majority of the people, and we know that there is a greater number, increasingly more people and the world who support our position to protect traditional values that for thousands of years have been the bulk of the Spiritual Foundation of civilization, of every people, the values of the traditional family, of genuine human life, including religious life, not only material, but spiritual life. The values of humanism and diversity of the world. Of course [applause] of course this is a conservative position, but the meaning of conservatism is not to prevent movement upward and forward, but in it prevents movement back and downwards to a chaotic darkness, to a return to the primordial state. Over the last few years we have seen attempts being made to impose on other countries so called more Progressive Development model, but in the reality, the result was setbacks, barbarity, and bloodshed. This is what happened in the far east north of africa dramatic situation revolving around syria. As far as syria, the International Community had to make a fateful choice to either keep going back to erosion of the world order or collectively make responsible decisions. I believe it is our shared success that a choice has been made specifically on the basis of fundamental principles of international law, logic, and peace. We have been able, external, outside of interference in syrias affairs and proliferation of the confidence of the region. Russia has acted firmly in a wellthought thruway and balanced way. We have never threatened our own our own security or global stability as we did that. From my perspective, this is how a mature and responsible country should operate. [applause] as a result, jointly with partners, we have been able to turn around the developments from war to the establishment of a syrian process and the chemical arsenal has been put under international control. Elimination of this arsenal is in accordance to first run hitting the regime of nonproliferation. The syrian president has confirmed the United Nations central role in global politics. As the situation around syria has indicated and also iran, central point, any problem must