Mikhail Mishustin held a meeting with members of the Government Commission on Socioeconomic Development of the North Caucasus Federal District

The meeting is being held on the sidelines of the 3rd Caucasus Investment Forum.

Mikhail Mishustin's opening remarks

Alexander Novak's report

Report by Yury Chaika, Plenipotentiary Representative of the President in the North Caucasus Federal District

Report by Maxim Reshetnikov, Minister of Economic Development

Excerpt from the transcript:

Mikhail Mishustin: Good afternoon, colleagues. Before the government commission begins its work, I would like to thank the forum organisers, the heads of the regions of the North Caucasus Federal District, and all those who helped to make this meeting possible. This important gathering confirms that the macroregion is steadily building the conditions needed to start and run a business - whether an agricultural or industrial enterprise, or a large hotel complex.

We saw further evidence of this during our visit to the exhibition, where we were given a detailed look at the implementation of dozens of projects. These projects are helping the district unlock its potential and play an increasingly significant role in the national economy.

In every region, healthcare, sports and cultural facilities, schools, kindergartens and residential properties are being built or modernised, including with federal support. Roads, industrial infrastructure, utility networks and public services are also being improved.

It is essential to keep a constant watch on their condition. The recent heavy rainfall, which affected half of the district's constituent regions to varying degrees, particularly Daghestan, showed us why. The severe weather caused widespread flooding, which damaged residents' homes, property and infrastructure.

At the President's instruction, a government commission has been set up to deal with the aftermath of the floods.

Aid must, of course, be provided as effectively as possible and in full accordance with established procedures, so that people can return to their normal lives, their usual activities and their work as quickly as possible.

This is essential not only for the affected regions but for the macroregion as a whole.

We will certainly discuss this in more detail today.

Investor interest in the district is growing - and the figures speak for themselves. Capital investment is steadily rising. Last year it increased by 10 percent, approaching 1.5 trillion roubles. Over the past few years, the loan portfolio has also expanded significantly, by around 2.3 times. The volume of shipped industrial goods grew by more than 5 percent, exceeding the Russian average.

The number of small and medium-sized businesses has increased by 10 percent - 2.5 times higher than the national average.

This is largely thanks to the wide range of government support tools specifically designed for regions, investors and entrepreneurs. Preferential regimes in special economic zones and industrial technology parks, the mechanisms available under the Infrastructure Menu federal support programme, the write-off of two-thirds of budget loan debt, preferential loans and subsidies - all these measures make it possible to expand capacity in industry, logistics, energy, tourism and the economy as a whole.

Of course, it is worth mentioning the agricultural sector, one of the main sectors in the North Caucasus. We provide regular assistance to it. Last year, we allocated over 36 billion roubles of budgetary funds for this purpose.

Local farms product all kinds of agricultural products, including 10 percent of the country's grain and over 30 percent of fruits and berries. Gardens occupy an area of nearly 85,000 hectares here. A year ago, we allocated a low-rate loan to another investor for planting a 200-hectare orchard in Karachayevo-Circassia.

Greenhouse farms are prospering here, as you have seen today. The largest of them are located in North Ossetia, Ingushetia and the Stavropol Territory.

I would like to say a few words about a relatively new but highly promising sector here, considering the climate and the quality of soil here. I am referring to flower farming.

The demand on the domestic market is huge, as we mentioned several times; about two billion stems. Only 25 percent of this amount is currently grown in the country. We talked at length about the requirements of this market during our visit to greenhouses in the Moscow Region .

I would like the heads of local regions to work together with the Agriculture Ministry and the Economic Development Ministry to explore the matter of flower growing in the North Caucasus. Mr Novak, our colleagues should make use of all available instruments to support this sector.

Tourism is another vital economic sector. We always discuss it in detail at the meetings of the government commission, including the necessary support measures. It has considerable potential in the North Caucasus. I believe that those who have visited North Caucasus resorts will never forget their names.

The local geography is good for developing any of these sectors regardless of seasons, which is extremely important, creating conditions for recreation and leisure tourism, as well as active and extreme tourism, such as mountain skiing, snowboarding and mountain climbing.

A powerful infrastructure for all-season tourist clusters has been developed here over the past few years. The popular ones, like Arkhyz, Elbrus and Dombai, as well as new ones like Mamison, have become points of attraction for tens and hundreds of thousands of tourists. One more ski slope with a unique cableway between two mount tops will open at the Veduchi hub at the end of the year. We visited that complex during our trip to the Chechen Republic.

It is important to actively work with potential investors to implement these promising projects, especially because many special instruments have been created for this on the President's instructions.

Working with potential investors is instrumental. We discussed this when we toured the stands today. As I have already said, we have the tools we need for this purpose. To understand what is missing, we must reach out to investors. By the same token, we must be open when discussing the challenges we are facing today in order to understand how we can help investors.

As for the topic of coastal tourism, the construction of the Caspian cluster with as many as four approach roads leading to it is currently underway. Almost 22 billion roubles have been invested in this project, and most of these funds came from private investors. This is a substantial investment. Of course, we must exercise extreme diligence for making sure that the deadlines for building these facilities are respected so that they can welcome their guests.

I am convinced that people will be amazed when they see all this. Many people who have not been there yet do not even imagine the extent to which these destinations can serve as a magnet for tourists, and I am speaking not just about Daghestan, but also about other regions. People will keep returning there.

The President has been instructing us time and again to be proactive and continue developing tourism and recreation complexes in North Caucasus. There was also an instruction to review the situation with health resorts which are the pride of this region.

In fact, there are over 160 major health resorts there right now, with most of them located in the Stavropol Territory.

At the previous Government commission meeting, we mentioned the fact that the system of health resorts in North Caucasus requires a serious upgrade and that businesses must play a bigger role in these efforts.

There are already eight projects underway with almost 22 billion roubles in investment. I believe that this is only the beginning.

The President has emphasised that we must pay special attention to restoring national, regional and local tourism infrastructure and trails while also working on major initiatives. We must adopt a comprehensive approach. This includes ensuring that hiking trails have the necessary infrastructure, including stopovers where people can rest, gear rentals and hospitality centres. This is what people expect to find there. The President made a special point when he stressed that this kind of tourism is really popular.

At the forum, we have already had a detailed conversation on the project to create the National Caucasus Trail. It includes a large section from Derbent to Sochi, which is almost 2,500 kilometres long and covers all the main travel destinations North Caucasus has to offer. Let me list them so that we are all on the same page: Mount Elbrus, Mamison, Veduchi, and Kezenoi-Am. Over 220 kilometres of this trail have already benefited from improvements, and we intend to cover the same distance by the end of the year.

Colleagues, much has been done to develop this sector, and we must continue our efforts to enhance these capabilities by engaging all the available tools and state support measures.

To foster tourism, it is imperative to develop a modern transport complex. The President has underscored the significance of enhancing citizens' air mobility.

Three airport terminals have already undergone refurbishment: in Vladikavkaz, in Shpakovskoye (Stavropol), and in Mineralnye Vody. The next phase involves renovating the terminal infrastructure at two additional airports - Grozny and Uytash in Daghestan. In three years' time, the first airport complex in the Karachayevo-Circassian Republic - Arkhyz - is anticipated to commence handling flights. Today, we observed that construction has already begun. It is being developed from the ground up, with an expected opening in the first quarter of 2029.

The throughput capacity of the principal transport artery - the Kavkaz federal motorway - is also being enhanced. The majority of it - two-thirds - has already been expanded to four lanes. Over the next four years, several more sections must be modernised in Daghestan, Ingushetia, the Kabardino-Balkarian Republic, and the Chechen Republic.

Naturally, I must mention one of the most ambitious projects, which the President likened to the construction of the Baikal-Amur Mainline. This is the North-South transport corridor. The priority is to re-route transit traffic away from the cities. Our Ministry of Transport is actively involved in this endeavour.

The Gudermes bypass has already been completed. The first nine kilometres of the Khasavyurt bypass road have been put into service. Work has begun on the Derbent bypass. The next in line are Makhachkala and Grozny on the eastern side.

There is a robust foundation in place, a substantial one. It is critically important to see all these projects through to completion. Clearly, roads provide a powerful impetus for the development of any territory and economy, and they are vitally important for people and businesses.

Colleagues, I now address the most sensitive, most complex issue, one that undoubtedly affects every resident of the North Caucasus - matters concerning housing and utilities. The inadequately high quality of its operation, of course, adversely affects people's daily lives and the performance of enterprises.

The Republics of Daghestan, Ingushetia, and North Ossetia-Alania, thanks to pilot projects in the housing and utilities sector, have managed to balance the work of the unified regional operators through fair tariffs and improved payment discipline, while providing social support to residents with the aid of federal subsidies.

It is essential to closely monitor this work in all regions of the district. This is the responsibility of each and every one of you.

Today, we will assess the state of affairs in detail. We need to analyse the measures that were previously adopted and outline further development plans.

In the North Caucasus, in my view, an excellent foundation for growth has been established across all strong sectors. The consistent implementation of the planned measures will, quite clearly, elevate the region's economy to a new level and, above all, do everything necessary to improve the well-being of the residents of the North Caucasus and attract people here.

I reiterate that even many of my colleagues, members of the Government, I know, use their weekends to visit the North Caucasus and intend to do so more frequently.

I would like to once again thank everyone for the organisational arrangements. Let us proceed with the work. I will request Deputy Prime Minister Alexander Novak, who actively oversees the North Caucasus-related agenda, to take the floor. Over to you, please.

: Thank you very much, Mr Mishustin. First of all, I would like to thank you for your special attention to the regions of the North Caucasus Federal District. The systemic decisions you have adopted have a direct impact on the socioeconomic development of the region and help address key constraints holding back the district's potential. Thanks to your personal involvement, the Caucasus Investment Forum has evolved into a major platform for dialogue between government authorities and the business community across the North Caucasus.

Allow me to report that over the past two days, the forum has brought together more than 3,000 participants from 27 countries. More than 70 events were held as part of the business program, and to date, 62 agreements worth approximately 400 billion rubles have been signed. The central event of the forum was the plenary session, Transforming the Investment Climate.

The forum's programme continues to expand each year. This year, particular interest was invoked by the business breakfast was focused on developing the region's creative economy, which is one of the Caucasus's defining features rooted in its rich cultural identity, creative industries, and local production. Special emphasis was also placed on youth, with a focus on fostering youth entrepreneurship.

More than 1,100 young people took part in the Youth Day events.

Mr Mishustin, the joint work of the federal centre and regional teams is guided by the economic development models developed at your instruction for the North Caucasus regions. Progress is assessed against the indicators you have approved. The district consistently ranks among the top three regions in terms of achieving these targets, placing third last year.

Breakthrough projects integrated into these economic development models play a key role in delivering results. As of 1 April, total accumulated investment has reached 627 billion roubles, nearly 500 billion of which comes from extra-budgetary sources. Last year alone, seven projects with worth 46 billion roubles in total were completed.

For example, in the Republic of Daghestan, the Novolakskaya wind farm and the Ozon trade and logistics complex were built. In the Republic of Ingushetia, the Sunzha greenhouse complex, with an annual capacity exceeding 15,000 tonnes of vegetables, has been completed. In the tourism sector, three projects were launched to create recreational clusters: Zolotye Peski and Kaspy in Daghestan, and the Mamison resort in the North Ossetia.

In the Chechen Republic, construction of the Bashennaya small hydroelectric power plant, with an installed capacity of 10 MW, has also been completed.

The implementation of national projects remains one of the Government's key support mechanisms for the North Caucasus, which underpins the achievement of national development goals set by the president and are primarily aimed at improving the quality of life of the people. Last year, federal funding for national projects in the district amounted to 120 billion roubles. In total, 344 facilities across education, healthcare, culture, sports, housing and utilities, and transport infrastructure were built or upgraded.

Mr Mishustin, one of the priority objectives you have set is the reduction of the shadow economy in the region. In this regard, a comprehensive set of measures is being implemented. Tangible progress has already been made, including a reduction in electricity and gas losses, as well as continued efforts to formalise labour relations. Notably, the number of transactions recorded via cash registers doubled over the past year.

The economic sustainability of the North Caucasus is closely linked to the development of tourism, which remains a priority area for the Government. This year, it is a central item on the agenda of the Government Commission for the Development of the North Caucasus Federal District. It should be highlighted that tourist arrivals to the region exceeded 3.2 million last year.

We can see that the most significant impact in developing resort infrastructure is achieved with active private sector participation. For the Mamison resort, which opened last year, plans are underway to attract an anchor investor and conclude a concession agreement.

Mr Mishustin, allow me once again to express my gratitude for your consistent attention to the development of the North Caucasus regions. It is your personal engagement that enables tangible and positive change. We are confident that the regional development mechanisms and systemic measures you have endorsed, combined with efforts on the ground, will ensure sustainable growth, improve living standards, and support the development of essential infrastructure across the North Caucasus Federal District. Thank you.

Mikhail Mishustin: Thank you, Mr Novak.

I would now like Presidential Plenipotentiary Envoy to the North Caucasus Federal District, Yury Chaika, to take the floor.Please, go ahead.

Yury Chaika: Mr Mikhail Mishustin, meeting participants,

First, I would like to thank President of the Russian Federation Vladimir Putin for paying permanent and close attention to the development of the North Caucasus region and for supporting our citizens, including during unforeseen emergencies. The entire country has rallied under his guidance in order to provide comprehensive assistance for residents of Daghestan and Chechnya impacted by springtime floods. Active clean-up operations continue to this day.

Mr Mishustin, I would like to sincerely thank you and your entire team (in your person) for actively helping us to unlock the potential of the macro-region. As a result of well-coordinated common efforts of the past five years, we are witnessing confident and sustained development of the most important socio-economic spheres of the North Caucasus Federal District.

I would like to mention just a few statistics.

For example, annual private investment into the economy of the North Caucasus Federal District has increased several times over in the past five years. The 2026 investment portfolio totals 950 billion roubles, exceeding 2020 indicators more than six-fold. I am confident that these volumes will increase even more following the forum. Agricultural output soared by nearly 50 percent and reached 952 billion roubles. Retail trade volumes and those of community services continue to increase each year. Efforts to balance regional and local budgets (by improving the investment climate and the quality of tax administration) considerably influenced economic sustainability. In late 2021, the district's territories had 247 billion roubles' worth of their own revenues, and they exceeded 406 billion in 2025.

The social sphere has posted some positive changes. The gross regional product (GRP) has increased by over 50 percent, from 271 billion to 409 billion roubles.

Over the years, the district has built about 35 million square metres of housing, and per capita floorspace has reached 24 square metres.

The number of employees has increased by almost 11 percent to over 4.6 million. At the same time, the general unemployment level has declined from almost 14 percent to this year's North Caucasus record low of 7.5 percent. In this regard, I would like to stress the importance of efforts to implement the project aimed at creating highly effective jobs. We hope that their number will increase in 2026.

The average monthly nominal accrued salary grew by almost 100 percent in January 2026 compared to January 2021, but regrettably it still lags behind the average Russia metric. The number of self-employed persons is growing at a fairly good rate, exceeding 1 million people as of the end of March 2026. In this context, I would like once again to stress the need for an individual, targeted interaction with this category, an interaction aimed at boosting the amount of goods, works, and services they produce.

It is gratifying to note that inter-regional connectivity and accessibility of investment platforms get enhanced with each passing year. Each focus area I have mentioned retains their growth dynamics. Let me dwell in particular on the results of the federal district's work to attain the national development goals outlined by the President of Russia.

In 2025, for example, the constituent entities of the federal district put into service 877 socially significant facilities.

According to preliminary estimates, 607 performance targets, or 96 percent, have been fulfilled or overfulfilled. This year, 920 such facilities are on the radar. Following the first quarter, the contracting level exceeded 81 percent and cash administration of the budget - 13 percent, which is much in excess of last year's numbers.

I would like to dwell on implementing the projects for the functioning of a single utilities operator system in the three pilot regions, namely the Republic of Daghestan, the Republic of Ingushetia, and the Republic of North Ossetia-Alania.

As we see it, they have achieved certain success with regard to increasing pay and improving the quality of services, as they have in drawing and implementing production and investment programmes. I think that the Ministry of Economic Development, the Ministry of Construction, and the Ministry of Energy will do well to study the experience amassed in implementing the pilot programmes and prepare proposals on its use in the rest of the constituent entities of the federal district.

At the same time, I think it expedient to approve targeted indicators for the single operators even before the completion of the experiment, indicators ensuring their financial independence and the attainment of national goals with regard to promoting the priority development of amenities infrastructure and improving the quality of services rendered to consumers.

The effort to maximise the capitalisation of the federal district's available potential should remain a most important priority in the context of joint work done by the federal and regional executive authorities until 2036.

It is necessary to create all conditions for a safe, comfortable and transparent business environment. At the same time investments should not damage natural resources or be detrimental to the macro region's ecosystem.

In this respect I want to thank you, Mr Mishustin, for the last year's assignment to protect our natural resources, including our Caucasus Mineral Waters area.

I will point it out that in executing your assignment, the Ministry of Natural Resources jointly with the Russian Academy of Sciences determined the order of performing comprehensive research and drafted the terms of reference, which are undergoing the stage of approval by specialised executive authorities and academic community.

Still, I assume that the performance of your assignment has taken on a protracted nature. Financial support of the scientific research has yet to be determined. Mr Mishutin, please instruct the Ministry of Natural Resources, the Academy of Sciences and the Finance Ministry to find out the amount and sources of financing the scientific research work to perform the comprehensive survey of the state of the Caucasus Mineral Waters resort region of federal significance within the framework of the federal budget for 2027 and the planned period of 2028-2029.

Colleagues, in conclusion I want to emphasise once again that notwithstanding the complex economic situation and continuing efforts by the foes of our country to hinder its progressive development, the regions of the North Caucasus, actively assisted by the Government of the Russian Federation, advance in solving the tasks set by President of Russia Vladimir Putin.

Thank you.

Mikhail Mishustin: Thank you, Mr Chaika. I give the floor to Maxim Reshetnikov, Minister of Economic Development, to speak on the development outcomes and priorities in the North Caucasus Federal District.

Please, Mr Reshetnikov.

: Mr Mishustin,

Since the main assessments and figures have already been presented, I won't repeat them and will instead focus on the specific tasks and instructions outlined in the draft protocol decision.

Mr Mishustin, I would like to note that all ministries, departments, and the Government of the Russian Federation are working in a focused and practical manner in the North Caucasus, which is delivering on the results highlighted today.

A few words on investment growth. As you mentioned, it remains positive, showing a 10 percent increase. A notable trend is the growing presence of banks in the region and the expansion of bank financing. Over the past five years, lending volumes have risen by 130 percent. Importantly, despite this growth in lending, delinquency rates continue to decline steadily. In other words, both entrepreneurs and banks in the Caucasus have become more effective at assessing and managing risks. As a result, mutual trust between the financial sector and businesses is strengthening - and where there is trust, further development will follow.

Support for small and medium-sized businesses has doubled over the past five years. During this period, entrepreneurs have received 140 billion roubles in preferential loans and guarantees. All of these projects underwent transparent evaluation and full banking compliance, which is a strong indication that the business environment is becoming more mature, formalised, and accountable.

Development institutions are also actively engaged, including Kavkaz.RF. Support in this area has increased by three and a half times, with a particular focus on the breakthrough projects mentioned by Mr Novak.

As for the agro-industrial sector, it remains a clear priority. The 36 billion roubles you referred to, Mr Mishustin, reflects the significant attention the Ministry of Agriculture is giving to this area. It is especially important that general agricultural support measures are effectively combined with targeted support tools available in the North Caucasus. In some cases, Kavkaz.RF participates through equity investments or project financing, which are then complemented by broader support tools, making it possible to move projects forward even in challenging economic conditions.

A number of targeted measures have also been implemented here at the President's instruction. First and foremost, this concerns the excise tax on viticulture, which has been made eligible for reinvestment. As a result, companies have directed more than 2 billion roubles towards upgrading production and equipment. Over the past two years, grape processing has increased by 22 percent, brandy production by 33 percent, and tax revenues to local budgets by 50 percent. This year, companies plan to invest an additional 1.2 billion roubles.

We also recently discussed the development of floriculture with colleagues from the Ministry of Agriculture. We propose that regional authorities, together with Kavkaz.RF, identify promising investment sites and form a pool of potential investors.

Now as regards industry. We also note growing support for industrial projects in the North Caucasus. The Industrial Development Fund has become significantly more active in the region. Recently, we backed five projects. In the Stavropol Territory, for example, a plant is being built to produce chemical components that are in high demand for oil production. This will be a unique facility, focused squarely on import substitution.

There are many such examples. At the same time, Kavkaz.RF is also providing support through preferential loans - for instance, to a fibreglass production facility in Daghestan.

I would also highlight the development of special economic zones, not only for tourism but also for industry. In Grozny, these zones are progressing well; a substation has been completed. Our colleagues are now launching four new production facilities and have ambitious growth plans.

Last year, through our SME development programmes, we supported two technology parks: the aluminium industry park in Ingushetia, which was featured at our stand, and the expansion of an industrial park in the Stavropol Territory.

Colleagues, we are currently preparing for the next selection round. We expect applications from the regions between May 14 and 29, so I urge the governors to take note and stay on top of this.

On tourism: key figures have also been mentioned here. Growth in the Caucasus is, of course, significantly higher than the Russian average. Over the winter, the district exceeded last year's targets, with growth of 19 percent, driven mainly by mountain skiing - we are aware of that. Some regions are currently facing difficult weather conditions. Once the situation returns to normal, we are confident that travel demand in those regions will recover and continue to grow.

This growth is underpinned by the expansion of hotel accommodation. We have supported 2,500 modular hotel rooms across 74 projects. I would ask the regional governors to keep a close eye on this issue, because, Mr Mishustin, at the end of last year you rightly criticised us for not having delivered on all projects. We have since tightened our oversight, so we ask the governors to pay very close attention to this as well. Under the preferential loan programme, we currently have 7,500 hotel rooms under construction across 40 projects. Two of these have been completed so far: one in the Stavropol Territory and one in Karachayevo-Circassia. But most are still under construction - you can see cranes everywhere. The majority of these projects are supported by Resolution No. 141 and the zero VAT rate on hotels.

Many colleagues have come up to me to thank us for that decision, noting how important it has been for their investment decisions. A wire cableway is also being built in Dombay using a preferential loan - a very important project. There is no special economic zone there, yet our colleagues are developing that historic resort.

The quality of the room stock is a priority. We have reformed the classification system, and 1,800 accommodation facilities in the Caucasus have now received the required certification. Mr Mishustin, I should note that 70 percent of these are new - they were not previously included in the register. This is a clear example of the work to bring the economy out of the shadow, something you keep under close review, and we are trying to focus on this as much as possible within our sectors.

The inspection has shown that the development of alpine skiing resorts has been noticeably accelerated. Last year Kavkaz.RF launched 12 new facilities: ski slopes, rope lifts, snowmaking systems. So, residents eagerly come to these special economic zones; we have 30 new residents now.

It is important that the resorts are adopting Russian technologies. The examples of Elbrus and Arkhyz have shown a Russian process chain: cableways, control systems and software. Many thanks to Anton Alikhanov and his colleagues, because they are actively engaged in creating all this technological cooperation.

We, together with Kavkaz.RF are working on the proposals designed to enhance the safety of the tourists during climbing. At this point we are asking for issuing instructions. We are preparing and discussing a proposal with deputies - our suggestion is to begin with Mount Elbrus. This is a most popular and difficult mountain for climbing in the country. And when unprepared individuals venture to climb that mountain, they often find themselves in difficult situations. This is why we suggest introducing a special regulatory regime there.

On the President's instruction, the health resort facilities in Caucasian Mineral Waters must be put in order. The Ministry of Healthcare has made an uphill work, Mr Murashko will speak about it. Quite a number of properties have been identified that are in need of repair, something the heads of administration have always told us about. As a rule, this refers to federal facilities. Currently, the Federal Agency for State Property Management is inspecting spa treatment facilities to assess how effectively they are being used. Mr Mishustin, we suggest issuing instructions with respect to each facility, which is in a substandard condition, requires investments or an action plan: when and what is to be done, determine where budgetary and where extra-budgetary allocations are needed, where private-public partnership will be expedient, tenders, concession, etc. While demand is still so high, we should take advantage of this. As a rule, these are economically viable projects with all communication lines in place and personnel ready to work. They just need a bit of investment and maybe construction of some new buildings, which will guarantee a large inflow of tourists.

As for the transport, Mr Mishustin, you have said practically everything in your remarks. I would add that it is very important to regard all these projects in their entirety. The failure of any of these projects may result in not achieving the target indicators we set ourselves, and the target indicators in this case are doubling the traffic flow across the border with Georgia and increasing it five-fold with Azerbaijan.

These are the final goals of the entire modernisation effort now underway. At present, the North Caucasus largely provides for the Russian economy's integration with the world one. A lot of cargoes are being transported though the North Caucasus to key destinations. And, of course, this offers additional opportunities for creating production and logistics facilities there in the future, something many regions are taking advantage of. The relevant projects have also been presented here.

Mr Mishustin, on a separate note, housing construction is on track to become a highly potent development driver. We discussed this yesterday at the plenary session. The pace of housing commissioning is up, and block of flats are being built. However, the per capita housing commissioned is still lagging behind the national average.

This also includes the construction material manufacturing market, meaning the launch of other investment projects. I would like to highlight the fact that the exhibition featured many previously unseen integrated development projects many of which are well designed replete with master plans. DOM.RF is now more actively engaged in this effort as well.

However, it is impossible to overcome housing development issues without removing infrastructure constraints which you mentioned, primarily housing and utilities. We are implementing a sustainable development programme in three pilot regions. Mr Novak and Mr Chaika mentioned that; the figures are shown on the slide. The regions are fulfilling their obligations to bring customer tariffs in line with the economically justified levels, and we expect that, ultimately, we will meet the schedules that we have agreed upon. However, a portion of this financial burden is borne by the budget so that the households can adapt gradually.

In fact, we are subsidising a portion of the tariff for individual customers. Some of it is covered from regional budgets, but the federal budget bears the brunt of it. This year, we need 3.3 billion roubles in order to smoothly complete the project within the originally set parameters. If you could see a way to have these funds allocated to us from the budget it would really go a long way with us completing it on time.

We call on the regional authorities and resource-supplying companies to step up efforts to reduce grid losses. We discuss this every year. That includes physical losses and theft alike. We see two solutions here: updating subscriber databases and using higher payment ratios with the households that do not use metering devices, including by introducing additional incentives for resource-supplying organisations to use this mechanism. At present, such organisations do not always use these ratios, and they should be held to stricter accountability standards.

Systemic problems in the energy sector have led to Rosseti facing a dearth of resources to implement the scheme and programme for the development of electric power systems. Many governors raised this issue with you today. We propose considering the possibility of covering this deficit in the future by using Rosseti's dividends to support these investment programmes. The Ministry of Energy is at the final stage of establishing a unified energy sales company in the North Caucasus Federal District. In order for Rosseti to divest its non-core sales function and to focus on combatting grid losses, we propose that the Ministry of Energy complete this work.

We also propose instructing the Ministry of Energy, the Ministry of Construction, and the pilot regions to explore the possibility of assigning additional functions of water and heat sales to this energy sales company so that all interactions with subscribers are handled through a single one-stop shop.

Another solution could include granting such organisations the right to file collective lawsuits against a single debtor. Court fees have increased, and in some cases the lawsuit costs have become prohibitive for the companies, and they increasingly choose not to deal with overdue payments. A collective lawsuit would address this issue. We suggest instructing the Ministry of Construction to address this issue in conjunction with us.

Personnel.

The key challenge here is an imbalanced specialist training system amid growing overall personnel shortages. However, much has been accomplished. The Professionalitet programme is being widely implemented, and four more training clusters in Dagestan and the Stavropol Territory have been added to the existing 14. Overall, we need to focus on comprehensive development of the entire vocational training system. With this in mind, the Ministry of Education has developed vocational training development programmes for each region.

Our goal is to help regions achieve national average indicators for graduate employment. We would like the governors to keep track of the approval and subsequent implementation of these programmes personally. We have an instruction to this end in the minutes. Concurrently with our colleagues from the Ministry of Education, we are fine-tuning university admission quotas to bring them in line with the economic needs. This systematic work is underway.

Mr Mishustin, in closing I would like to thank you, Mr Novak, and Mr Chaika, as well as our colleagues from the ministries and development institutions for cooperation.

We truly feel their support and see that everyone has been part of this effort over the years. The results of activity in the North Caucasus are excellent. So, thank you very much, colleagues. All proposals are included in the draft minutes which will set the pace of our work next year. We would like you to support it.

Mikhail Mishustin: Thank you, friends.

We had a substantive discussion today. We reviewed the results of the measures we had implemented and discussed further steps to ensure we do not lose results of our earlier work and continue to expand both infrastructure development and tourist transport. More broadly, we discussed how the North Caucasus is being transformed.

We covered all the key areas. Hundreds of projects are being implemented in the region. You mentioned significant growth in private investment, which is laudable. At one time, Mr Chaika and I spoke about the first hundreds of billions, and look at the figures we are talking about today. These are, of course, tangible results.

Most new projects are found in traditional sectors with extensive track record such as tourism, travel and recreation, as well as agriculture, and the production of mineral water and food.

However, entrepreneurs are testing innovative ideas in industry (as demonstrated today by Stavropol, with its small enterprises) and in energy in order to attract as many young people as possible, including graduates of the Professionalitet programme and universities, into clusters in order to create new jobs and to implement the latest technologies.

This effort calls for involvement of highly skilled specialists. In one way or another, it drives demand for the vocational training system and for the Professionalitet programme, which is becoming increasingly popular here in the Caucasus. Almost one third of young people studying under these programmes have chosen technical professions. This is a nationwide trend, and we are following it closely. A quarter of them chose medical specialties, as Mr Murashko noted which is also highly encouraging.

Today, admission quotas are determined on the basis of workforce forecasts. I always make a point that publicly funded spots at universities must be allocated to sought-after professions. Professional training must continue to be a systematic effort. A comprehensive secondary vocational training development programme must be drawn up for each region of the district based on the needs that go six years into the future, and not only within the region in question, but in neighbouring regions as well. Indeed, the world is a complex and ever-changing place, and workforce needs are evolving. Every one or two years, some traditional professions disappear and new ones emerge. That is precisely why we make plans for a six-year horizon and then continuously update it.

I would also like to say a few words about tourism, which was widely discussed today. Mr Klyachin raised some interesting points. Importantly, we must compete for every single tourist who comes to see our country and the Caucasus, in particular. Without a doubt, we need to set our sights high, because 50,000 tourists is a number that is far below the number of tourists that could potentially be visiting the North Caucasus. I am confident that we can attract more visitors from the CIS countries and other friendly nations. There is China, Southeast Asia, Indonesia, and many other countries, and tourists from these countries would gladly come visit us. This calls for active effort and high hospitality industry standards.

It is likewise important to provide training in this field. We now have around 100 institutions training hospitality sector specialists. Admission quotas are increasing by about 10 percent each year, and most graduates quickly find employment which is great news. Just a few years ago, low employment in the Caucasus was a problem. Now, more and more people are finding jobs here. I hope that this sector will continue to need more personnel and, most importantly, highly skilled professionals.

The National Caucasus Trail Project must certainly be continued based on a phased-in development plan. I mentioned key points of attraction. This route, along with all supporting infrastructure, must be developed, including in specially protected areas which present particular challenges. For the development of recreation areas, private business should be engaged as widely as possible.

I realise that access to affordable loans is limited, but as inflationary pressures ease up, access to financing will gradually be restored. In addition, investors have their own substantial amounts of capital. We must work with them, persuade them, and work as a team, as well as provide guarantees. Regional leaders are well aware that if you work alongside an investor, they will remain a reliable partner.

In this regard, I would like everyone to consider the possibility of bringing in a strategic investor for the next phases of construction of the Mamison Complex. Things are coming together, and the work must continue. The same applies to upgrading resort facilities in the Caucasian Mineral Water region. This place enjoys longstanding reputation. First and foremost, their condition must be carefully analysed and an inventory taken. A plan will then be needed to upgrade these structures, including spatial planning. This is precisely what you are all engaged in. I am genuinely pleased to say that, because not long ago territorial planning materials were largely an image, almost like a picture. Now everyone is working with feasibility studies and detailed design and estimate documentation. This is a much more professional approach. I would also like to thank regional leaders of the Caucasus for this.

I would like to say a few words about energy and housing and utilities, which represent a critically important area. Mr Novak and Mr Khusnullin oversee this and keep a close eye on these matters. The Minister of Construction is also here. The number of illegal connections to gas and electricity grids and the stealing of energy have come down but they still exist. I would like regional heads and corporate leaders to personally address these issues and closely monitor utility payment collections. Payment discipline needs to be toughened. Without it, nothing will work. I have a big request for you. We have taken significant steps and launched a pilot project in three regions. However, we must fully overcome these challenges and balance supply and demand in energy and utilities sectors. It is essential to strictly and consistently implement the action plan we have outlined. It is a solid plan, and I would like to thank our colleagues, since everyone contributed to developing it.

Key government ministers are present here today. I would like to thank each of you for making this meeting possible. Each of you bears personal responsibility.

Without a doubt, I will report in detail to the President the outcomes of today's forum.

Friends, I would like to thank all of you for the good work. Perhaps, some of you will have the opportunity to come and spend some time here, at the North Caucasus resorts, during the May holidays.

I wish you all continued success. Thank you.