Vladimir Putin: “Our business leaders are increasingly in favour of not letting the itinerant foreign companies back”

10:04 17.06.2023 •

Photo: Kremlin.ru

President of Russia Vladimir Putin took part in the plenary session of the 26th St. Petersburg International Economic Forum.

We will quote the important parts of his speech at the Forum:

- Colleagues, ladies and gentlemen, friends, today, we can say in all confidence that the strategy chosen at the time by both the state and Russian businesses proved its worth. Positive macroeconomic trends are gaining momentum and becoming increasingly apparent.

- In April 2023, GDP increased 3.3 percent, annualised, and is expected to add over one percent by the end of the year. This is at least what the IMF believes with its forecast of 0.7 percent. I agree with our analysts who argued that the Russian economy would achieve an even higher growth rate of about 1.5 percent, or maybe even 2 percent. This will enable our country to retain its place among the world’s leading economies.

- We kept responsible and balanced fiscal and monetary policies in place. This effective combination made it possible for us to maintain minimal unemployment and inflation, which is lower in Russia than in many Western countries, both in the Eurozone and other regions. It is close to the historical low – 2.9 percent. Unemployment stands at 3.3 percent which is the lowest in our history.

- The state has the financial capability to uphold its steadfast commitment to ensuring social justice, reducing poverty and inequality. This focus has been an important factor enabling us to overcome the challenges we had to face last year. We provide targeted support to the neediest. If you look at this category and their incomes, this indicator increased by about 30 percent over the past year. In 2022, 1.7 million were lifted out of poverty, while the poverty level declined to single digits at 9.8 percent.

- Last year, there were predictions that sanctions would pressure Russia to revert to a closed, command economy. However, as you know, we opted to give businesses more freedom and the way we applied this principle demonstrated that this was the right decision, as experience has borne out.

- Replacing transnational corporations that have left the Russian market was a notable event and a powerful boost for our businesses. Unfortunately, these corporations were unable to resist the sweeping political pressure exerted by international political elites.

- You are well aware of the fact that we did not expel anyone from our market or our economy. On the contrary, we suggested that they weigh all the pros and cons and think carefully about their Russian partners and the potential consequences. Each of our partners had a choice.

- Importantly, products that are made at our production facilities have long been sold under foreign brands. In fact, these are Russian goods with foreign labels… So, the departure of trademark owners does not mean that the production will stop… In a word, if at first our entrepreneurs, I would say, were very worried about the departure of Western companies, they are now taking over vacant production facilities and shopping centre spaces.

- Last year alone, Russian manufacturers filed more than 90,000 trademark applications. In addition to clothing and footwear, they cover mostly software, household chemicals, perfumery products, cosmetics and so on.

- I do not think I will reveal a secret if I say that our business leaders are increasingly in favour of not letting the itinerant foreign companies back. The same thing happened in agriculture after 2014, when our agricultural enterprises began to pick up steam and the meetings with agricultural businesses were dominated by one question only: will we let our competitors back or not? When asked at what point we should let them back the answer was ‘Never! Do not let them come back at all, we will do everything ourselves!’ Admittedly, our agricultural producers have lived up to their promise. Agricultural output grew by over 10 percent last year. We cover our needs for all items in this sector and are exporting much of our output.

- That said, if foreign manufacturers ever wish to return to our market – we keep hearing this more and more – we are not shutting our doors to anyone. Without a doubt, no one is afraid of competition. As is known, it is the engine behind progress and trade. We will create the necessary conditions for them to work in Russia.

- We are going to pay special attention to the North-South Transport Corridor, with plans to double export freight volumes by 2025 and to triple them by 2030. In May, as many of you know, we concluded an agreement with our Iranian partners on building a rail section in Iran that is currently lacking.

- We will also continue to build our ice-breaking fleet, needed for the Northern Sea Route, which is seeing fast expansion. Last year, it was used to carry 34 million tonnes of freight.

- The effort to develop transport corridors and logistics in Russia has helped our businesses strengthen their foreign trade ties and step-up cooperation primarily with countries in the EAEU, Asia, the Middle East and Africa, as well as Latin America.

- The fifth principle is, of course, our commitment to an open economy. Despite all the challenges we faced last year, we did not go down the road of self-isolation. On the contrary, we expanded our contacts with reliable and responsible partners in the countries and regions that are driving global economic growth today. Let me reiterate that these are the markets of the future, and everyone understands this perfectly well.

- In some cases, trade with countries whose leaders refuse to give in to coarse outside pressure, while prioritising their own national interests rather than those of others, increased not just by several dozen percent but by many times, and it is continuing to grow.

- This ugly and de-facto neo-colonial international system no longer works, while the multipolar world order is, on the contrary, becoming stronger. This is an inevitable process.

- Overall, exports of Russian goods hit a ten-year high in 2022 at US $592 billion, with non-commodity, non-energy exports accounting for almost a third of this amount at US $188 billion.

- Russia has been a top five grain exporter for ten years now. We have been the largest supplier of wheat to the global market since 2016… Russia will be proactive in ensuring global food security and helping countries, including in Africa, suffering from food shortages.

- Of course, markets’ operators include not only Russia’s partners and friends, but, let us face it, detractors. They are accustomed to generating super profits from their dominant and monopoly position, including political monopoly, and just do not want other countries to have an alternative to their aircraft, ships, medicines, banking systems, technology and other goods and services. These market participants do not need competitors, so they are throwing wrenches in our plans and trying to hold back new development centres, or cancel them, in modern parlance. However, all these attempts do is cancel Western countries’ business reputation, which is a valuable asset. It appears that sometimes some people tend to forget that.

- I would also like to note the tangible progress in using national currencies in foreign trade – this is a separate and large issue. Today, about 90 percent of our transactions with the EAEU countries are made in rubles and over 80 percent of our transactions with China are in the ruble or the yuan.

- We are dynamically developing trade in national currencies with other states as well. We are prioritising our near neighbours, as well as the BRICS and SCO countries.


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