Transcript of the beginning of the meeting:

Vladimir Putin: Ms Freindlich has given me this bell to moderate our meeting. Is everyone here?

We've gathered at a very good time. This city is celebrating its birthday. The weather's good and everyone's in a good mood.

Alisa Freindlich: Well, the weather...

Vladimir Putin: ...is very good!

Alisa Freindlich: It cleared up just a minute ago, but it's been raining heavily today.

Vladimir Putin: It doesn't matter now. It's all in the past. And we should think about the future. Fine weather, good mood...

Okay, first of all, I'd like to thank Ms Chulpan Khamatova for her effort, and for gathering us together. It's a very important cause. Thank you very much. I'll also repeat it publicly, when we start the show.

The government is doing everything in its power to address at least the most acute problems more effectively than before, and we have gathered here to discuss these problems today.

As you know, a large medical centre is being constructed in Moscow for children with oncologic diseases, primarily hematologic diseases. This centre will be the largest in Europe, without exaggeration. It'll accommodate between 250 and 300 patients, servicing another 300 patients at its ambulatory clinic. Also, there'll be a research lab and a hotel for the families of young patients. They will be able to come and stay there for the duration of the treatment. This option is very important for such patients. They need their family there.

The government is doing this on its own. It'll cost the budget 11 billion roubles. Construction will be finished by next June. The centre will have the latest high-tech equipment. I hope it'll be able to receive its first patients at the end of next year.

Construction, equipment... everything's done by our specialists and with our money, and in cooperation with doctors. Also, our European partners and friends, primarily from Germany, the leaders in this branch of medicine, have given us invaluable help.

I'm mentioning them because they are very enthusiastic: They have spent so much personal time on this project, giving everything to help our specialists. And we can see the results of their efforts.

I discussed this project during my latest visit to Germany. One of the leading European and even international specialists in this area told me a very moving story. When one Swiss child fell ill, his family came to a German clinic for consultation. The German doctors said that the child should be taken to Russia because the world's number one specialist in this disease works there. I think it's great that we have such specialists in our country.

Well, we nevertheless lack the research base, equipment and other things. I hope... I'm sure that next year we'll resolve this issue almost completely.

I know that Ms Khamatova pays special attention to these issues. She's constantly in contact with the doctors, the families of the children, and the children themselves. And she follows the progress of this centre. Do you know this story? In 2005 I received a letter from a patient at this clinic, a little boy, Dima Rogachev. He invited me for pancakes. And so I visited him.

Chulpan Khamatova: Sorry to interrupt you, he wrote that it was his sweetest dream. We ask children what their most desired dreams are, and we - and our friends and volunteers - try to make these dreams come true. Some wish for a guitar, some for a video camera. But this boy wanted to have some pancakes with the president! Mr Putin received this letter and came... excuse me.

Vladimir Putin: That's okay. Sadly, Dima passed away, but it was he who inspired us to build this large medical and research centre in Russia. And I've got an idea... It just occurred to me all of a sudden, and I'd like to hear your opinion... I think it'd be good if we named this centre in honour of Dima Rogachev.

Chulpan Khamatova: We would need to discuss this with the doctors. His parents must have come here today. His mother comes to every concert here.

Vladimir Putin: In any case, it was he who initiated it. He was the inspiration for this idea. Not that he asked to build this centre, but...

Leonid Yarmolnik: It's a good idea. Unprecedented... No centre has been given the name of a young patient.

Vladimir Putin: Unfortunately, he died in Israel where he was being treated.

Leonid Yarmolnik: Good idea. Such centres are usually named for doctors or the person who founded them. And this centre could have the name of the boy who inspired the idea. I don't think the doctors would mind.

Chulpan Khamatova: It's their call after all.

Vladimir Putin: Okay, let's say I've finished my monologue. Now you please.

Chulpan Khamatova: Well, I was told that this should be a low key discussion, and I'll try to keep it so. First, I'd like to say while everyone's here - and we scheduled this reception before the concert, not after it - I'd like to thank everyone for coming. Some have come from other cities, not just from Moscow: Some were touring and giving other concerts. Thank you very much. When so many talented and generous people come together, they can provide a lot of positive energy... You know, when we put on these shows, I have goosebumps because I feel this energy...

I'd like to ask two questions on behalf of the fund. They're more like requests...

The problems we're facing today... I'm not sure whether I'll sound low key enough now, but still I'd like to touch on the problems that keep us from developing it as quickly as we could. I'm speaking on behalf of the Podari Zhizn [Grant a Life] fund, but I'm sure many charities are facing the same problems...

You most certainly know about the problem with orphan drugs, which are...

Vladimir Putin: ... very costly and are not mass-produced.

Chulpan Khamatova: Correct, they haven't been mass-produced because it's an unprofitable business.

Vladimir Putin: Very few patients need them, and there's no general production, therefore they're expensive.

Chulpan Khamatova: Yes. I'd like to tell you how we're dealing with this problem. Of course, it's an unprofitable business, and sometimes the situation borders on the absurd. We have to spend donated money on it. First, we need to find a doctor abroad, who agrees to give a prescription. Sometimes the same person doesn't agree to do it twice. And the drugs are needed urgently; a child's life is at stake. So we find a doctor, and even if this doctor agrees to fill the prescription, we need to find someone who'll agree to take the drug across the border, which is also difficult. Some people panic thinking that it's something illegal even if we show them all documents. They sometimes just leave these drugs, which cost a fortune, at an airport. And they just disappear.

This is why I'm asking for your help. Ours is not the only foundation facing the problem of treating rare diseases and the procurement of rare drugs.

Vladimir Putin: Yes, this problem exists. In many countries the state makes an official list of rare diseases and rare drugs, but there's no such list in Russia, which causes the problems with the import and production of drugs, if such production can be organised here. I agree that this list must be created and managed properly.

Chulpan Khamatova: And this should be done as soon as possible.

Vladimir Putin: We'll do it. The Ministry of Healthcare and Social Development has been given a directive already.

Chulpan Khamatova: I know they're doing all they can to resolve this issue but...

Remark: They need a push.

Vladimir Putin: They will finish this work on their own.

Chulpan Khamatova: They need to be prodded a little.

Vladimir Putin: I understand that a) it's a problem and b) it's an acute problem. And it will never be settled without the government's direct support because companies do not profit form it, and these drugs are produced in very small quantities.

<!--[if gte mso 9]> Normal 0 false false false MicrosoftInternetExplorer4 <!--[if gte mso 9]> <!--[if !mso]> <!--[endif]--> <!--[if gte mso 10]> <!--[endif]--> Sergei Garmash: There is a related problem with some of the base substances that cannot be imported. If you recall, some of them are just not mentioned in our customs regulatory acts.

Vladimir Putin: Well, it's not a matter of import. If they are not produced in Russia, and are produced in small quantities in other countries, and are not on the list of special drugs, there will be problems with customs. We'll work it out.

Chulpan Khamatova: Thank you very much, and my second question...

I'd like to discuss tax benefits and tell you how it works.

Unlike first aid, second aid is taxed.

Vladimir Putin: What's second aid?

Chulpan Khamatova: For example, our fund wants to help the same child twice the same year. During the first treatment, we might purchase some inexpensive drug, then, when the child needs transplantation...

Vladimir Putin: It's taxed.

Chulpan Khamatova: Yes, and this tax is levied on the parents of this child. And they receive notification 12 months later...

Vladimir Putin: ...as the recipients of help.

Chulpan Khamatova: Yes, transplantation can cost 15,000 euros, and treatment 40,000 euros, and the parents must pay this tax even if they don't have the money.

Vladimir Putin: I see.

Chulpan Khamatova: We've prepared a draft law. It's now in the Duma. It's a big project, and we hope it'll settle all the issues related to non-profit organisations.

And we have a request. Could we include in this draft law a tax relief provision for the second round of treatment? Sometimes the foundation assists with organising funerals, and you can understand what bereaved parents feel when they receive a bill a year after losing their child.

Vladimir Putin: We'll need to alter the Tax Code to specify that all help received during the course of treatment be tax exempt.

Chulpan Khamatova: Yes, the whole course of treatment. It'd be perfect.

Vladimir Putin: We'll do it.

Chulpan Khamatova: Thank you very much. That's all I wanted to discuss today. Thank you.

Vladimir Putin: Okay. We can actually discuss any issue, whether it's related to today's event or not. Please.

Yury Shevchuk: May I?

Vladimir Putin: Yes.

Yury Shevchuk: You now, some aide of yours - I don't remember his name - called me yesterday and asked me not to bring up any sensitive issues, political problems and other things...

Vladimir Putin: Excuse me, could you introduce yourself?

Yury Shevchuk: Yura Shevchuk, a musician.

Vladimir Putin: Yura, it was a provocation.

Yury Shevchuk: Provocation, ah, whatever...

Vladimir Putin: My aide would never call you to say such a thing.

Yury Shevchuk: Okay, not your aide, some lunatic, yes...

Remark: It's getting funny!

Yury Shevchuk: But I've got some questions. In fact I've got a whole lot of questions. First, I'd like to thank everybody for gathering. What you see here is the emergence of a real civil society, which you speak so much about and dream about.

Here's what I'd like to discuss. I have some questions. First, freedom. Such a word, freedom... The freedom of the press, the freedom of information... What's happening in the country... We're living in a class society that has remained the same over centuries. There are rich dukes with their privileges and then the common people who toil away... And there's an immense gap between them. I'm sure you understand this.

The only way forward is making everyone equal before the law, both the dukes and the common people. Coal miners shouldn't go to work as though it's the last battle. The system must be fair. An individual should be free and have self-respect, which would result in a natural patriotism. You cannot arouse this feeling with a banner. I see what's happening now, and everyone intelligent and sensible can see it.

We see these banners, but it's all so superficial. It's a lame attempt to show patriotism and maybe conscience... These chants and marches... We've seen it all before. The only effective solution is civil society and equality for everyone, absolutely everyone, before the law, you, me and everyone else. Only then can we move ahead. We'll build hospitals and help children, people with disabilities and elderly people. We'll do it sincerely and willingly, it'll come from the depth of our souls.

But to this end, we need freedom of the press, which is missing. There's one paper and a half in our country. The same with television. What we see on TV cannot even be called debate; it's the same marches and chants.

The protesting electorate is growing in number, and you know it. Many are critical of the present situation. Are you honest when you say you want real liberalization and modernisation for a real country, where public organisations are not suffocated and where people don't feel scared of a policeman on the street? The police now serve their bosses and their pockets, not people.

There are a lot of persecutors in this country. I really think so. On May 31 a March of Dissent will be held in St Petersburg. My question is whether it'll be dispersed or not.

That's it.

Vladimir Putin: That's all?

Yury Shevchuk: So far yes. I can show you what we've made up with guys. Not even made up, these are just some facts describing what's happening in our country, plus our opinion.

Vladimir Putin: Okay, thanks, I'll take a look, be sure. First of all, without democracy Russia has no future.

Yury Shevchuk: It's understood.

Vladimir Putin: It's obvious. An individual can build on their capabilities only in a free society. And if they are able to do so, they contribute to the development of the country, its science, its industry, taking it to the highest possible level. Otherwise, society stagnates. It's an obvious fact, understood by all. It's the first point I'd like to make.

Second, everyone must abide by the law. You're correct in this. But we need a professional approach to this. You mentioned coal miners...

Yury Shevchuk: Yes.

Vladimir Putin: I take to heart everything happening there.

Yury Shevchuk: Me too.

Vladimir Putin: A professional approach suggests analysing the legal and economic conditions thoroughly.

Yury Shevchuk: That's true.

Vladimir Putin: Why is it happening? What's one of the reasons? They say one reason is the base salaries at coal mines, for example, at the Raspadskaya coal mine, where the base salary accounts for about 45% of a miners' income, and the rest is bonuses. And so the workers disregard the safety rules to earn these bonuses.

Yury Shevchuk: I know.

Vladimir Putin: I made a decision and gave a directive to the government to raise the base salary to 70%. But, Yura, let me emphasise that it applies to coke mines only. You need some knowledge of this issue to understand it. In addition to coke mines, there are steam coal mines, which are less profitable. And the base salary rates depend on the price of the finished product. If we increase it thoughtlessly, steam coal mines will become unprofitable overnight and will close. If you are for a market economy, you should understand that they'll just close. And as far as I can see, you're a proponent of a market economy, not a planned economy. They'll just close. That's it. And this is only one aspect of the problem.

Now you say that policemen serve their bosses only. There are many different kinds of people working as police officers. It's a microcosm of our society in general. It's a part of our country. And these people haven't come from Mars. <!--[if gte mso 9]> Normal 0 false false false MicrosoftInternetExplorer4 <!--[if gte mso 9]> <!--[if !mso]> <!--[endif]--> <!--[if gte mso 10]> <!--[endif]--> Many are people who risk their lives and health to faithfully serve our people. Yes, there are traffic police whose only purpose is to make money from bribes, but there also are those who would protect a child with their bodies, who use their own cars to stop criminals and who get killed. So it is unfair to tarnish the image of all these people.

Yury Shevchuk: I don't!

Vladimir Putin: No, but you said that cops serve only the officials, not the people.

Yury Shevchuk: This is true in general. For example, I have taken part in the March of Dissent, and there will be 500 participants and maybe 2,500 special task force police. What, did we stab or kill somebody?

Vladimir Putin: I didn't interrupt you when you were talking. Don't turn the discussion into a noisy argument!   

I think it is unfair to reduce everyone to the same level. We do have problems there. It's our culture: when a guy gets a license or some "stick" in his hands, he immediately begins to swing it and try to make money using it. But this applies not only to the police but in every area where people have authority and the opportunity to make illegal money.

As for these Marches of Dissent, there are rules stipulating that such events be controlled by local authorities. We should think about the rights of those who are not participating in the "dissent/approval marches."  

If you are going to hold a March of Dissent, pardon my sharp words, near a hospital and disturb sick children, who will allow you to do that? Of course they have the right to prohibit this!

Yury Shevchuk: May I say?

Vladimir Putin: No! And if you want to hold a demonstration blocking a road so people cannot get to their dachas on Friday or return home on Sunday? They will curse you. And they will curse the local authorities, too.

But this does not mean that the government should make excuses and limit freedom of speech. This is an issue which should be discussed with the government.

I hope that in St. Petersburg, everything will be organised in an acceptable way. People's right to express their disapproval of the government should be protected, but participants in such demonstrations should not disturb those who do not want to demonstrate, but just want to get home in time and be with their families.We have to work around that.

I really want you to understand this: That I and the other government members need people's opinions.  

Yury Shevchuk: Of course.

Vladimir Putin: If I see that people go into the streets not just to talk or promote themselves but to say something important and relevant and draw the government's attention to some problem, there is nothing wrong with that. I will thank them.

Yury Shevchuk: Indeed.

Vladimir Putin: And I mean it.

Yury Shevchuk: But you also see that local authorities install amusement rides on main squares when we want to hold our protests. This is nothing but hypocrisy.

Vladimir Putin: I agree with you on that.

Yury Shevchuk: You know, last year, the whole city fought to preserve St. Petersburg's historical centre. You cannot imagine what they [the local authorities] did to block our efforts! You were born there; it's an amazing city, a wonder. But they fought us off and people got really angry. What was this all about? Your words have weight, so use them...

Vladimir Putin: My weight is 76 kilograms.

Yury Shevchuk: Oh God...

Oleg Basilashvili: Mr Putin, let me support Yura. Just one word.  

Vladimir Putin: Sure, Mr Basilashvili.

Oleg Basilashvili: Speaking of this skyscraper. I cannot tell if it's beautiful or not, it is not my business. Maybe it is gorgeous. But most people who are concerned about St. Petersburg, who love the city and know its history say this building doesn't belong there, especially a 300-400-metre tall building.  

Federal and local laws have been flagrantly violated and the authorities just laugh in our faces. We basically feel like those with power say to us, "It's you who has to abide by the law, not us, so piss off."  And all the newspapers say is "it will be constructed."

I fear that this is not just about this "Gasscraper," but really about the confrontation between the government and the people whose opinion is never taken into account. Dissent has been growing and I agree with Yura on that. And this is just one small example of hundreds.

Yury Shevchuk: Millions.

Vladimir Putin:  Mr Basilashvili, this example isn't small, it's huge. 

Oleg Basilashvili: Yes.

Vladimir Putin: And very tall. Of course, everybody should abide by the law. This is an obvious...