Unemployment in Russia it as its lowest numbers in modern history, and inflation may fall below 3% early next year. Nevertheless, the government needs to shift the disposable income of the Russian people, which remains the same despite wage growth. All of that was discussed today by Vladimir Putin at the Russia Calling investment forum. The Head of State spoke before business leaders from around the world, outlining the general state of the Russian economy and its prospects. However, the conversation also touched upon politics.
Our observer Alexander Khristenko will tell you about the most crucial statements made at the forum.
"Let's hear about new trends and developments and where Russia will call us".
Judging by a record number of participants — 2,500 people from six continents — it was indeed important for everyone to find out where Russia is calling. And they knew for sure they would get a complete response. President Putin traditionally visits the VTB Capital Investment Forum where a panel discussion is organized.
- Andrey Leonidovich, thank you. You're the host of this event; may I ask two questions?
- The real host — Vladimir Vladimirovich — has come, though. So I'll just be an assistant to him, OK?
Vladimir Putin: "We don't have hosts or guests, we're on equal grounds here despite the fact that we were placed... How do you call it? Onto the panel. Let's better call it a podium".
Investors were waiting for signals from the president about the direction in which the Russian economy would be developing. First of all, Vladimir Putin speaks about the goal to increase the welfare of citizens.
Vladimir Putin: "It's known that wages in Russia are growing nowadays in both nominal and real terms. However, the disposable income of citizens is practically standing still. This situation certainly needs to be changed. It's the most vital field of the government's work. And the results here are pretty moderate yet".
National projects are expected to have an economic impact. They include road construction, infrastructure, demography, health care, education, science — a total of 12 areas, for which impressive 26 trillion rubles ($407.42 bln) are planned.
Vladimir Putin: "We don't have a goal of spending this money by all means. What is important is a result of these expenses. We went as far as increasing the VAT. And, of course, it's crucial for us that these funds, which we collected for realizing national projects, are spent effectively".
How to spend more effectively? Isn't it better to save money? A traditional heated debate on these matters begins between leaders in finance, current and former. This time, they remembered the famous "Kudrin's thrift box", which was useful during the 2008 crisis. However, Chairman of the Accounts Chamber Kudrin now shares the government's position that you can spend more.
"It's amusing how Aleksey Leonidovich wants to spend money now! But when he was the Finance Minister, you could never make him do it".
Aleksey Kudrin: "There's a myth about me being the Finance Minister and being unable to see spending money".
Anyway, everyone agrees that you can't just throw money away. Otherwise, they'll devalue, as well as all the achieved results. Low inflation and public debt, predictable exchange rate and tax treatment — these are the areas of the government's work of recent years and things that are indeed functioning normally and creating conditions for further development. But it's not growth in itself just yet. Today at the forum the discussion was around achieving the economic growth and accelerating it.
The momentum for qualitative development was strangely enough given by Western sanctions. The foreign had to be replaced with the domestic, and it turned out that Russia can produce competitive products in many fields. This brings additional income from exports to the country and, of course, gives self-confidence.
Vladimir Putin: "I'll tell you frankly... and I can now say it openly and publicly that after the first steps were made in this sanctions list, I had some concerns. I'd like to thank all my colleagues and unknown people who stay working at their place in industries, in factories, in design bureaus, in research institutes. A very serious big step was made toward increasing our economic and technological sovereignty. In this sense, our economy has benefited from all these limitations. There are cons, of course. They're cons for everyone. They're just calculated in billions of dollars. You know, it's the boomerang effect. For example, I already mentioned that they went ahead and forbade their companies to work on the shelf. Why? What for? Companies invested certain funds in this or that project and later had to exit those projects with losses. And whom did they punish? They punished themselves, they shot themselves in the foot".
Andrey Kostin, President and Chairman of the Management Board of VTB Bank: “When anti-Russian sanctions were imposed, the share of the US investors in foreign investments in Russia, particularly in our stock market etc., increased from 40 to 50%. It means that despite any rhetoric, tough policies and sanctions of the US, US investors are increasing their presence in the Russian economy, and not vice versa.”
Russia is open for a dialog with the US in all matters, be it strategic stability or economic cooperation, but the US is not up to that just now.
Vladimir Putin: “We're ready for that as much as our American partners are. But we see what's still going on there. Thank God no one blames us for interfering in the US election anymore, now the blame is on Ukraine. Let them figure it out between themselves.”
For a long time, the US allies believed that the chaos in the US only affects Russia, and is generally a temporary thing. But the further it goes, the more Europe realizes that even NATO is not the same as it was.
Vladimir Putin: "Up until now, the US said to Europe that they were an umbrella against the Soviet threat and that you had to pay for it in return. It doesn't really work today. Despite all the issues with Ukraine, with profiteering around Crimea and Donbass, everyone clearly understands that Russia isn't going to attack anyone. It's not enough now to say, "We protect you — you pay." Why would they pay for maintaining defense complex and workplaces in the US? They'll develop their own. That's what they say about it now. That's why you need to be more careful here, guys".
The US is actively working in the world energy market as well, to where it broke into with its oil shale.
Vladimir Putin: “Let's wait until the Americans spend all their money on a new technology of shale oil extraction, then snatch it like a cat. Let's see if we're interested in it today or not. And we'll buy it on the cheap. We're working on it, working independently. It's quite unnecessary... That was a joke, by the way, don't spread that "like a cat" to the whole world. — Don't quote the cat part. — They already have. That's why I correct myself. The thing is today's technology of shale oil and gas extraction is barbaric, without any exaggeration. It destroys the environment. In some areas where shale oil is produced, local people have black slush instead of water running from their tap. We don't need such production, despite all the possible economic advantages, we'll never do this.”
Russia is generally not so dependent on oil any more thanks as well to the sustainability, which was provided by competent actions of regulators.
- Vladimir Vladimirovich, you said that the work of the Central Bank is satisfactory. Did you give it a C?
Vladimir Putin: It depends on the evaluation system. If it's a 3-point one, it means "excellent".
- That's good. They could get upset and worry later.
- They won't get upset, they're tough girls and guys. Yes, the girls are indeed good there.
But it turned out that the audience was interested in tough guys as well. An unexpected question came from a foreign investor who's into martial arts.
- How can one train with the great Alexander Karelin?
Vladimir Putin: "You'd better not do it because he's still in very good shape".
All the participants agreed that the Russian macroeconomy is in the same shape. The government promises to work on the rest.
Alexander Khristenko, Viktor Prikhodko, Alexey Karpukhin, and Alexandra Terpugova — Vesti from Moscow.
