Photo: Sergey Guneev, RIA Novosti
The 14th VTB “Russia Calling!” Investment Forum is being held on December 7 and 8, 2023, in Moscow.
Its central theme is “Making Deglobalisation: Uniting Sovereign Economies”.
President of Russia Vladimir Putin took part in the plenary session of the “Russia Calling!” forum. He made some key points in his speech:
The global system of economic relations is going through radical, irreversible changes, as we have just heard, which is due to the fact that a multipolar model is about to replace yesterday’s globalisation model.
What we want is to create a new model, a truly democratic model where honest competition between all economic players will dominate. This change in the global economic landscape and the rise of new leaders are an objective and to a large degree predictable process.
In fact, it has always been like this in life in human history, all the time and in all spheres. It has always been like this, with some countries rising and then subsiding, giving way to new leaders. This is what is taking place in the global economy now.
However, Western elites, which are currently at the top of this process, are trying to slow it down, to contain growth artificially in what they regard as the global periphery, which they have traditionally exploited and used as a resource, as a source of [economic] rent and simply as a colony. To attain this goal, they use sanctions, for example, exacerbating the political situation and provoking conflicts in whole macro-regions in an attempt to maintain their slipping domination.
The Western elite love talking about the principles underpinning the market economy, but they went so far as to cancel them. We remember, and people here probably remember, the mantras we heard when globalisation was taking shape as a system: everyone must be equal, everyone must enjoy equal treatment, and borders must be open – they must remain open at any cost. How can it be otherwise? This runs counter to the very concept of global development. But whenever a competitor comes up, suddenly, they rush to seal off their borders, as if it was a knee jerk reaction of some kind. This is what all these principles are worth.
They have gone even further recently by cancelling what seemed to be timeless concepts such as property rights. Only recently, we thought that the European jurisdictions were safe, that they were what was called the safe havens, but this is no longer the case. They have adopted the friend-or-foe approach, much like the IFF– Identification Friend or Foe system in the air force. This is how they determine whether to grab someone’s assets and leave them without a dime, and block assets, companies or enterprises, take them away or even liquidate them after acts of sabotage like with the Nord Stream pipelines. This is what competition is all about in a rules-based order.
Who needs these rules? It is obvious that these actions undermine decades-old financial, trade and economic ties, primarily those crafted by the West. By the way, this has also discredited the financial infrastructure dominated by the dollar and the euro, transactions through Western banks and SWIFT.
Today, transactions in national currencies are effectively replacing this system. Of course, this is still a work in progress, which is obvious, but we are moving in this direction and this process is poised to gain momentum. I would even argue that the Western financial system is clearly becoming obsolete from a technological perspective. It has remained so complacent for so long and has become used to its monopoly and exceptionalist nature and that there were no alternatives that it has grown used to keeping everything as it is. This made it obsolete, or at least it is about to become archaic and obsolete.
As far as international transactions are concerned, we are increasingly converting to advanced solutions, including those involving blockchain and digital currencies through central banks. According to the analysts, this will pave the way for revolutionary shifts that will deprive the major Western banks of their monopoly. We see that these lenders are not in their best shape, at least some of them.
I would like to stress once again that the world has entered an era of cardinal change and trials, not just for companies and industries, but for entire countries and regions. Only a strong, stable and, I would like to especially stress and emphasise that, sovereign country will be able to pass through this and become a growth centre in the new global economy. This is extremely important. This is what connects the economy and our policy. This must be a country with powerful industrial, technological, infrastructural, human and financial potential, with its own dynamic market; a country that clearly knows how to defend its political, economic, and trade interests, the interests of national businesses and its foreign business partners.
As it turns out, countries like this exist. Despite any external pressure, rebuffing, pounding on the table, whispering in the ear, there are people who are leaders of countries, and powerful countries at that, who do not succumb to this pressure and are guided primarily by their own national interests, and they fit into the model that we offer for development.
We have proven that we are capable of facing the most difficult challenges. The Russian economy is effectively coping with external attempts to restrain the development of the country. The key was the fundamental, as it turned out, margin of safety that we have been building over the past 20 years, and especially since 2014 after the first large package of sanctions against Russia was introduced. Back then, we focused on developing the consumer sector, strengthening the financial sector and creating our own payment infrastructure.
Let me remind you that one of the West’s first decisions last year was to disconnect Russian banks from the Visa and Mastercard systems. The bet was that this would make it impossible to pay for goods and services, collapse payments, and therefore paralyse the country’s banking sector. As some Western colleagues put it, they wanted to make our citizens “suffer.” These were the humanistic plans for Russian citizens. They wanted to create problems for millions of Russian families.
But, how did this turn out in reality? Individuals and businesses never even noticed the seamless transition to the national payment system, which is now successfully operating and expanding. Accordingly, we have stopped paying commissions to Western companies, so they have lost profits on what they could have earned in Russia.
In finance, industry and the consumer market, we are gradually discontinuing the use of any imposed services, brands or intermediaries. In fact, we are expanding our own market, and seeing system-wide positive results from our dedicated efforts. For example, in the first ten months of this year, Russia’s GDP grew by 3.2 percent. It is already higher right now than it was before the Western sanctions attack.
By the end of the year, GDP growth is expected to reach 3.5 percent – at least, we are all counting on that. You will agree with me – everyone here is well-versed in this field – that this is a good indicator for the Russian economy.
Russia is Europe’s largest economy and is now ahead of all the leading EU countries in terms of growth rates. Moreover, the so-called essential non-commodity industries are accounting for an increasing share in the structure of Russia’s economic growth. These include manufacturing, transport, logistics, construction, information, communications, and housing and utilities.
For example, in the second quarter of this year, they accounted for more than half (54 percent, to be more precise) of economic growth. Another 44 percent had to with what is known as the support industries – trade, catering, other services. And only 2 percent, I would like to emphasise this, only 2 percent came from mineral extraction. Now let’s hear someone refer to Russia as a fuel station, like they did in the not too distant past.
I admit that there are industries that have not yet fully recovered, not fully adapted to the new conditions. One of them is wood processing. There are reasons for this. It was largely dependent on European markets. Nevertheless, the situation is changing for the better. The automobile industry has had a rough time because our companies had a high dependence on imported components. This industry was among the hardest hit. But it is gradually emerging from the crisis as well.
I would like to specifically note that, despite the objective difficulties, Russian businesses have shown high responsibility. And I would like to take this opportunity to thank our colleagues for this. Not only have companies retained their workforce and established new logistics chains, but they are also launching projects in the domestic consumer market, in the high-tech sector, in tourism, and in other industries. They are quickly taking the niches that were vacated after a number of Western companies left our market. Did they think everything would collapse here? Well, nothing of the kind happened. Russian companies took over and moved on. And our business leaders are proceeding very confidently.
Now I would like to emphasise that we are interested in making our market open and competitive. This is the key to development, a stimulus for the qualitative growth of domestic businesses and the entire Russian economy. Again, Russia is not expelling anyone or closing its markets to anyone. Many foreign firms and companies said they wanted to continue working in our country despite the pressure from their governments and officials. We only welcome this. Despite the pressure, they either changed their names and maintained their presence in the market, or simply transferred the business to management – with the right to buy it back, to be honest and clear. God bless them; let them work. We will only support this.
You know, you can waste your breath as much as you want, making slogans and threats – let this be up to those Western politicians who intend to cancel Russia. But all this hype cannot cancel the immutable fact that it has always been profitable to work with Russia and in Russia; it is profitable today and will remain profitable. And this fact has been confirmed over centuries, in the experience of generations of merchants, entrepreneurs, and businesspeople from around the world.
From the beginning of March 2022, to this November, the number of foreign companies in Russia, I would like to draw your attention to this, despite all the pressure from the political elite in the West, the number of foreign entities, business entities operating in Russia, has not decreased. Can you imagine? I was surprised to discover this myself when I was looking at the materials. It has increased. As of March 1, 2022, 24,100 foreign organisations were registered in Russia. As of this November 1, there were almost 1,500 more, about 25,600. This is an indicator of their interest and willingness to work in Russia. The growth of the domestic market and the expansion of Russia's contacts with the states of Asia, the Middle East, the South of Eurasia, Latin America, and Africa opens up additional opportunities in our economy for virtually any business.
I will cite a few indicative figures. In a year and a half, the number of domestic companies in light industry has grown by 80 percent, furniture manufacturers by 30 percent, and children's toys by 20 percent. During the same period, that is, over the last year and a half, the number of trademarks owned by Russian companies has increased by more than a third. What does this indicate? That investment in projects to manufacture these products, to create new enterprises and jobs throughout the country are worthwhile and profitable. Thus, in the first nine months of this year, the profits of large and medium-sized companies in the real sector exceeded 26 trillion rubles. This turned out to be about a quarter more than a year earlier. This is a good indicator. Businesses are not just earning profits, they are investing in development, which means they believe in the prospects, in the future of our economy.
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