Russian President Vladimir Putin's address and remarks at the 25th St Petersburg International Economic Forum Plenary session

I welcome all participants and guests of the 25th St Petersburg International Economic Forum.

It is taking place at a difficult time for the international community when the economy, markets and the very principles of the global economic system have taken a blow. Many trade, industrial and logistics chains, which were dislocated by the pandemic, have been subjected to new tests. Moreover, such fundamental business notions as business reputation, the inviolability of property and trust in global currencies have been seriously damaged. Regrettably, they have been undermined by our Western partners, who have done this deliberately, for the sake of their ambitions and in order to preserve obsolete geopolitical illusions.

Today, our – when I say “our,” I mean the Russian leadership – our own view of the global economic situation. I would like to speak in greater depth about the actions Russia is taking in these conditions and how it plans to develop in these dynamically changing circumstances.

When I spoke at the Davos Forum a year and a half ago, I also stressed that the era of a unipolar world order has come to an end. I want to start with this, as there is no way around it. This era has ended despite all the attempts to maintain and preserve it at all costs. Change is a natural process of history, as it is difficult to reconcile the diversity of civilisations and the richness of cultures on the planet with political, economic or other stereotypes – these do not work here, they are imposed by one centre in a rough and no-compromise manner.

The flaw is in the concept itself, as the concept says there is one, albeit strong, power with a limited circle of close allies, or, as they say, countries with granted access, and all business practices and international relations, when it is convenient, are interpreted solely in the interests of this power. They essentially work in one direction in a zero-sum game. A world built on a doctrine of this kind is definitely unstable.

After declaring victory in the Cold War, the United States proclaimed itself to be God’s messenger on Earth, without any obligations and only interests which were declared sacred. They seem to ignore the fact that in the past decades, new powerful and increasingly assertive centres have been formed. Each of them develops its own political system and public institutions according to its own model of economic growth and, naturally, has the right to protect them and to secure national sovereignty.

These are objective processes and genuinely revolutionary tectonic shifts in geopolitics, the global economy and technology, in the entire system of international relations, where the role of dynamic and potentially strong countries and regions is substantially growing. It is no longer possible to ignore their interests.

To reiterate, these changes are fundamental, groundbreaking and rigorous. It would be a mistake to assume that at a time of turbulent change, one can simply sit it out or wait it out until everything gets back on track and becomes what it was before. It will not.

However, the ruling elite of some Western states seem to be harbouring this kind of illusions. They refuse to notice obvious things, stubbornly clinging to the shadows of the past. For example, they seem to believe that the dominance of the West in global politics and the economy is an unchanging, eternal value. Nothing lasts forever.

Our colleagues are not just denying reality. More than that; they are trying to reverse the course of history. They seem to think in terms of the past century. They are still influenced by their own misconceptions about countries outside the so-called “golden billion”: they consider everything a backwater, or their backyard. They still treat them like colonies, and the people living there, like second-class people, because they consider themselves exceptional. If they are exceptional, that means everyone else is second rate.

Thereby, the irrepressible urge to punish, to economically crush anyone who does not fit with the mainstream, does not want to blindly obey. Moreover, they crudely and shamelessly impose their ethics, their views on culture and ideas about history, sometimes questioning the sovereignty and integrity of states, and threatening their very existence. Suffice it to recall what happened in Yugoslavia, Syria, Libya and Iraq.

If some “rebel” state cannot be suppressed or pacified, they try to isolate that state, or “cancel” it, to use their modern term. Everything goes, even sports, the Olympics, bans on culture and art masterpieces just because their creators come from the “wrong” country.

This is the nature of the current round of Russophobia in the West, and the insane sanctions against Russia. They are crazy and, I would say, thoughtless. They are unprecedented in the number of them or the pace the West churns them out at.

The idea was clear as day – they expected to suddenly and violently crush the Russian economy, to hit Russia’s industry, finance, and people's living standards by destroying business chains, forcibly recalling Western companies from the Russian market, and freezing Russian assets.

This did not work. Obviously, it did not work out; it did not happen. Russian entrepreneurs and authorities have acted in a collected and professional manner, and Russians have shown solidarity and responsibility.

Step by step, we will normalise the economic situation. We have stabilised the financial markets, the banking system and the trade network. Now we are busy saturating the economy with liquidity and working capital to maintain the stable operation of enterprises and companies, employment and jobs.

The dire forecasts for the prospects of the Russian economy, which were made in early spring, have not materialised. It is clear why this propaganda campaign was fuelled and all the predictions of the dollar at 200 rubles and the collapse of our economy were made. This was and remains an instrument in an information struggle and a factor of psychological influence on Russian society and domestic business circles.

Incidentally, some of our analysts gave in to this external pressure and based their forecasts on the inevitable collapse of the Russian economy and a critical weakening of the national currency – the ruble.

Real life has belied these predictions. However, I would like to emphasise that to continue being successful, we must be explicitly honest and realistic in assessing the situation, be independent in reaching conclusions, and of course, have a can-do spirit, which is very important. We are strong people and can deal with any challenge. Like our predecessors, we can resolve any task. The entire thousand-year history of our country bears this out.

Within just three months of the massive package of sanctions, we have suppressed inflation rate spikes. As you know, after peaking at 17.8 percent, inflation now stands at 16.7 percent and continues dropping. This economic dynamic is being stabilised, and state finances are now sustainable. I will compare this to other regions further on. Yes, even this figure is too much for us – 16.7 percent is high inflation. We must and will work on this and, I am sure, we will achieve a positive result.

After the first five months of this year, the federal budget has a surplus of 1.5 trillion rubles and the consolidated budget – a surplus of 3.3 trillion rubles. In May alone, the federal budget surplus reached almost half a trillion rubles, surpassing the figure for May 2021 more than four times over.

Today, our job us to create conditions for building up production and increasing supply in the domestic market, as well as restoring demand and bank financing in the economy commensurately with the growth in supply.

I mentioned that we have taken measures to reestablish the floating assets of companies. In most sectors, businesses have received the right to suspend insurance premiums for the second quarter of the year. Industrial companies have even more opportunities – they will be able to delay them through the third quarter as well. In effect, this is like getting an interest-free loan from the state.

In the future, companies will not have to pay delayed insurance premiums in a single payment. They will be able to pay them in equal installments over 12 months, starting in June next year.

Next. As of May the subsidised mortgage rate has been reduced. It is now 9 percent, while the programme has been extended till the end of the year. As I have mentioned, the programme is aimed at helping Russians improve their housing situation, while supporting the home building industry and related industries that employ millions of people.

Following a spike this spring, interest rates have been gradually coming down, as the Central Bank lowers the key rate. I believe that that this allows the subsidised mortgage rate to be further cut to 7 percent.

What is important here? The programme will last until the end of the year without change. It means that our fellow Russians seeking to improve their living conditions should take advantage of the subsidy before the end of the year.

The lending cap will not change either, at 12 million roubles for Moscow and St Petersburg and 6 million for the rest of Russia.

I should add that we must make long-term loans for businesses more accessible. The focus must shift from budget subsidies for businesses to bank lending as a means to spur business activity.

We need to support this. We will allocate 120 billion rubles from the National Wealth Fund to build up the capacity of the VEB Project Financing Factory. This will provide for additional lending to much-needed initiatives and projects worth around half a trillion roubles.

Once again, the economic blitzkrieg against Russia was doomed to fail from the beginning. Sanctions as a weapon have proved in recent years to be a double-edged sword damaging their advocates and architects just a much, if not more.

I am not talking about the repercussions we see clearly today. We know that European leaders informally, so to say, furtively, discuss the very concerning possibility of sanctions being levelled not at Russia, but at any undesirable nation, and ultimately anyone including the EU and European companies.

So far this is not the case, but European politicians have already dealt their economies a serious blow all by themselves. We see social and economic problems worsening in Europe, and in the US as well, food, electricity and fuel prices rising, with quality of life in Europe falling and companies losing their market edge.

According to experts, the EU’s direct, calculable losses from the sanctions fever could exceed $400 billion this year. This is the price of the decisions that are far removed from reality and contradict common sense.

These outlays fall directly on the shoulders of people and companies in the EU. The inflation rate in some Eurozone countries has exceeded 20 percent. I mentioned inflation in Russia, but the Eurozone countries are not conducting special military operations, yet the inflation rate in some of them has reached 20 percent. Inflation in the United States is also unacceptable, the highest in the past 40 years.

Of course, inflation in Russia is also in the double digits so far. However, we have adjusted social benefits and pensions to inflation, and increased the minimum and subsistence wages, thereby protecting the most vulnerable groups of the population. At the same time, high interest rates have helped people keep their savings in the Russian banking system.

Businesspeople know, of course, that a high key rate clearly slows economic development. But it is a boon for the people in most cases. They have reinvested a substantial amount of money in banks due to higher interest rates.

This is our main difference from the EU countries, where rising inflation is directly reducing the real incomes of the people and eating up their savings, and the current manifestations of the crisis are affecting, above all, low-income groups.

The growing outlays of European companies and the loss of the Russian market will have lasting negative effects. The obvious result of this will be the loss of global competitiveness and a system-wide decline in the European economies’ pace of growth for years to come.

Taken together, this will aggravate the deep-seated problems of European societies. Yes, we have many problems as well, yet I have to speak about Europe now because they are pointing the finger at us although they have enough of their own problems. I mentioned this at Davos. A direct result of the European politicians’ actions and events this year will be the further growth of inequality in these countries, which will, in turn, split their societies still more, and the point at issue is not only the well-being but also the value orientation of various groups in these societies.

Indeed, these differences are being suppressed and swept under the rug. Frankly, the democratic procedures and elections in Europe and the forces that come to power look like a front, because almost identical political parties come and go, while deep down things remain the same. The real interests of people and national businesses are being pushed further and further to the periphery.

Such a disconnect from reality and the demands of society will inevitably lead to a surge in populism and extremist and radical movements, major socioeconomic changes, degradation and a change of elites in the short term. As you can see, traditional parties lose all the time. New entities are coming to the surface, but they have little chance for survival if they are not much different from the existing ones.

The attempts to keep up appearances and the talk about allegedly acceptable costs in the name of pseudo-unity cannot hide the main thing: the European Union has lost its political sovereignty, and its bureaucratic elites are dancing to someone else’s tune, doing everything they are told from on high and hurting their own people, economies, and businesses.

There are other critically important matters here. The worsening of the global economic situation is not a recent development. I will now go over things that I believe are extremely important. What is happening now does not stem from what happened during recent months, of course not. Moreover, it is not the result of the special military operation carried out by Russia in Donbass. Saying so is an unconcealed, deliberate distortion of the facts.

Surging inflation in product and commodity markets had become a fact of life long before the events of this year. The world has been driven into this situation, little by little, by many years of irresponsible macroeconomic policies pursued by the G7 countries, including uncontrolled emission and accumulation of unsecured debt. These processes intensified with the onset of the coronavirus pandemic in 2020, when supply and demand for goods and services drastically fell on a global scale.

This begs the question: what does our military operation in Donbass have to do with this? Nothing whatsoever.

Because they could not or would not devise any other recipes, the governments of the leading Western economies simply accelerated their money-printing machines. Such a simple way to make up for unprecedented budget deficits.

I have already cited this figure: over the past two years, the money supply in the United States has grown by more than 38 percent. Previously, a similar rise took decades, but now it grew by 38 percent or 5.9 trillion dollars in two years. By comparison, only a few countries have a bigger gross domestic product.

The EU's money supply has also increased dramatically over this period. It grew by about 20 percent, or 2.5 trillion euros.

Lately, I have been hearing more and more about the so-called – please excuse me, I really would not like to do this here, even mention my own name in this regard, but I cannot help it – we all hear about the so-called ‘Putin inflation’ in the West. When I see this, I wonder who they expect would buy this nonsense – people who cannot read or write, maybe. Anyone literate enough to read would understand what is actually happening.

Russia, our actions to liberate Donbass have absolutely nothing to do with this. The rising prices, accelerating inflation, shortages of food and fuel, petrol, and problems in the energy sector are the result of system-wide errors the current US administration and European bureaucracy have made in their economic policies. That is where the reasons are, and only there.

I will mention our operation, too: yes, it could have contributed to the trend, but the root cause is precisely this – their erroneous economic policies. In fact, the operation we launched in Donbass is a lifeline they are grabbing at to be able to blame their own miscalculations on others, in this case, on Russia. But everyone who has at least completed primary school would understand the true reasons for today's situation.

So, they printed more money, and then what? Where did all that money go? It was obviously used to pay for goods and services outside Western countries – this is where the newly-printed money flowed. They literally began to clean out, to wipe out global markets. Naturally, no one thought about the interests of other states, including the poorest ones. They were left with scraps, as they say, and even that at exorbitant prices.

While at the end of 2019, imports of goods to the United States amounted to about 250 billion dollars a month, by now, it has grown to 350 billion. It is noteworthy that the growth was 40 percent – exactly in proportion to the unsecured money supply printed in recent years. They printed and distributed money, and used it to wipe out goods from third countries’ markets.

This is what I would like to add. For a long time, the United States was a big food supplier in the world market. It was proud, and with good reason, of its achievements, its agriculture and farming traditions. By the way, this is an example for many of us, too. But today, America’s role has changed drastically. It has turned from a net exporter of food into a net importer. Loosely speaking, it is printing money and pulling commodity flows its way, buying food products all over the world.

The European Union is building up imports even faster. Obviously, such a sharp increase in demand that is not covered by the supply of goods has triggered a wave of shortages and global inflation. This is where this global inflation originates. In the past couple of years, practically everything – raw materials, consumer goods and particularly food products – has become more expensive all over the world.

Yes, of course, these countries, including the United States continue importing goods, but the balance between exports and imports has been reversed. I believe imports exceed exports by some 17 billion. This is the whole problem.

According to the UN, in February 2022, the food price index was 50 percent higher than in May 2020, while the composite raw materials index has doubled over this period.

Under the cloud of inflation, many developing nations are asking a good question: why exchange goods for dollars and euros that are losing value right before our eyes? The conclusion suggests itself: the economy of mythical entities is inevitably being replaced by the economy of real values and assets.

According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. I think this has become a very real threat for many countries that keep their gold and foreign exchange reserves in these currencies.

According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation.

As for Europe, their failed energy policy, blindly staking everything on renewables and spot supplies of natural gas, which have caused energy price increases since the third quarter of last year – again, long before the operation in Donbass – have also exacerbated price hikes. We have absolutely nothing to do with this. It was due to their own actions that prices have gone through the roof, and now they are once again looking for somebody to blame.

Not only did the West’s miscalculations affect the net cost of goods and services but they also resulted in decreased fertiliser production, mainly nitrogen fertilisers made from natural gas. Overall, global fertiliser prices have jumped by over 70 percent from mid-2021 through February 2022.

Unfortunately, there are currently no conditions that can overcome these pricing trends. On the contrary, aggravated by obstacles to the operation of Russian and Belarusian fertiliser producers and disrupted supply logistics, this situation is approaching a deadlock.

It is not difficult to foresee coming developments. A shortage of fertiliser means a lower harvest and a higher risk of an undersupplied global food market. Prices will go even higher, which could lead to hunger in the poorest countries. And it will be fully on the conscience of the US administration and the European bureaucracy.

I want to emphasise once again: this problem did not arise today or in the past three or four months. And certainly, it is not Russia’s fault as some demagogues try to declare, shifting the responsibility for the current state of affairs in the world economy to our country.

Maybe it would even be nice to hear that we are so powerful and omnipotent that we can blow up inflation in the West, in the United States and Europe, or that we can do things to throw everything into disorder. Maybe it would be nice to feel this power, if only there were truth in it. This situation has been brewing for years, spurred by the short-sighted actions of those who are used to solving their problems at somebody else’s expense and who have relied and still rely on the mechanism of financial emission to outbid and draw trade flows, thus escalating deficits and provoking humanitarian disasters in certain regions of the world. I will add that this is essentially the same predatory colonial policy as in the past, but of course in a new iteration, a more subtle and sophisticated edition. You might not even recognise it at first.

The current priority of the international community is to increase food deliveries to the global market, notably, to satisfy the requirements of the countries that need food most of all.

While ensuring its domestic food security and supplying the domestic market, Russia is also able to scale up its food and fertiliser exports. For example, our grain exports in the next season can be increased to 50 million tonnes.

As a priority, we will supply the countries that need food most of all, where the number of starving people could increase, first of all, African countries and the Middle East.

At the same time, there will be problems there, and not through our fault either. Yes, on paper Russian grain, food and fertilisers… Incidentally, the Americans have adopted sanctions on our fertilisers, and the Europeans followed suit. Later, the Americans lifted them because they saw what this could lead to. But the Europeans have not backed off. Their bureaucracy is as slow as a flour mill in the 18th century. In other words, everyone knows that they have done a stupid thing, but they find it difficult to retrace their steps for bureaucratic reasons.

As I have said, Russia is ready to contribute to balancing global markets of agricultural products, and we see that our UN colleagues, who are aware of the scale of the global food problem, are ready for dialogue. We could talk about creating normal logistical, financial and transport conditions for increasing Russian food and fertiliser exports.

As for Ukrainian food supplies to global markets – I have to mention this because of numerous speculations – we are not hindering them. They can do it. We did not mine the Black Sea ports of Ukraine. They can clear the mines and resume food exports. We will ensure the safe navigation of civilian vessels. No problem.

But what are we talking about? According to the US Department of Agriculture, the matter concerns 6 million tonnes of wheat (we estimate it at 5 million tonnes) and 7 million tonnes of maize. This is it, altogether. Since global production of wheat stands at 800 million tonnes, 5 million tonnes make little difference for the global market, as you can see.

Anyway, Ukrainian grain can be exported, and not only via Black Sea ports. Another route is via Belarus, which is, incidentally, the cheapest way. Or via Poland or Romania, whichever you prefer. In fact, there are five or six export routes.

The problem is not with us, the problem is with the adequacy of the people in control in Kiev. They can decide what to do, and, at least in this particular case, they should not take their lead from their foreign bosses, their masters across the ocean.

But there is also the risk that grain will be used as payment for arms deliveries. This would be regrettable.

Once again, the world is going through an era of drastic change. International institutions are breaking down and faltering. Security guarantees are being devalued. The West has made a point of refusing to honour its earlier commitments. It has simply been impossible to reach any new agreements with them.

Given these circumstances and against the backdrop of mounting risks and threats, Russia was forced to go ahead with the special military operation. It was a difficult but necessary decision, and we were forced to make it.

This was the decision of a sovereign country, which has еру unconditional right to uphold its security, which is based on the UN Charter. This decision was aimed at protecting our people and the residents of the people's republics of Donbass who for eight long years were subjected to genocide by the Kiev regime and the neo-Nazis who enjoyed the full protection of the West.

The West not only sought to implement an “anti-Russia” scenario, but also engaged in the active military development of Ukrainian territory, flooding Ukraine with weapons and military advisers. And it continues to do so now. Frankly, no one is paying any attention to the economy or well-being of the people living there, they just do not care about it at all, but they have never spared money to create a NATO foothold in the east that is directed against Russia and to cultivate aggression, hatred and Russophobia.

Today, our soldiers and officers, as well as the Donbass militia, are fighting to protect their people. They are fighting for Russia's future as a large, free and secure multiethnic country that makes its own decisions, determines its own future, relies on its history, culture and traditions, and rejects any and all outside attempts to impose pseudo-values steeped in dehumanisation and moral degradation.

No doubt, our special military operation goals will be fulfilled. The key to this is the courage and heroism of our soldiers, consolidated Russian society, whose support gives strength and confidence to the Russian Army and Navy and a deep understanding of the truth and historical justice of our cause which is to build and strengthen Russia as a strong sovereign power.

My point is that sovereignty cannot be segmented or fragmented in the 21^st century. The components of sovereignty are equally important, and they reinvigorate and complement each other.

So, what matters to us is not only the defence of our political sovereignty and national identity, but also strengthening everything that determines our country’s economic, financial, professional and technological independence.

The very structure of Western sanctions rested on the false premise that economically Russia is not sovereign and is critically vulnerable. They got so carried away spreading the myth of Russia’s backwardness and its weak positions in the global economy and trade that apparently, they started believing it themselves.

While planning their economic blitzkrieg, they did not notice, simply ignored the real facts of how much our country had changed in the past few years.

These changes are the result of our planned efforts to create a sustainable macroeconomic structure, ensure food security, implement import substitution programmes and create our own payment system, to name a few.

Of course, sanction restrictions created many challenges for the country. Some companies continue having problems with spare parts. Our companies have lost access to many technological solutions. Logistics are in disarray.

But, on the other hand, all this opens up new opportunities for us – we often talk about this but it really is so. All this is an impetus to build an economy with full rather than partial technological, production, human and scientific potential and sovereignty.

Naturally, it is impossible to resolve such a comprehensive challenge instantly. It is necessary to continue working systematically with an eye to the future. This is exactly what Russia is doing by implementing its long-term plans for the development of branches of the economy and strengthening the social sphere. The current trials are merely resulting in adjustments and modifications of the plans without changing their strategic orientation.

Today, I would like to talk about the key principles on which our country, our economy will develop.

The first principle is openness. Genuinely sovereign states are always interested in equal partnership and in contributing to global development. On the contrary, weak and dependent countries are usually looking for enemies, fuelling xenophobia or losing the last remnants of their identity and independence, blindly following in the wake of their suzerain.

Russia will never follow the road of self-isolation and autarky although our so-called Western friends are literally dreaming about this. Moreover, we are expanding cooperation with all those who are interested in it, who want to work with us, and will continue to do so. There are many of them. I will not list them at this point. They make up the overwhelming majority of people on Earth. I will not list all these countries now. It is common knowledge.

I will say nothing new when I remind you that everyone who wants to continue working or is working with Russia is subjected to blatant pressure from the United States and Europe; it goes as far as direct threats. However, this kind of blackmail means little when it comes to countries headed by true leaders who know the difference between their own national interests, the interests of their people – and someone else’s.

Russia will build up economic cooperation with these states and promote joint projects. At the same time, we will certainly continue to cooperate with Western companies that have remained in the Russian market despite the unprecedented arm-twisting – such companies exist, too.

We believe the development of a convenient and independent payment infrastructure in national currencies is a solid and predictable basis for deepening international cooperation. To help companies from other countries develop logistical and cooperation ties, we are working to improve transport corridors, increase the capacity of railways, transshipment capacity at ports in the Arctic, and in the eastern, southern and other parts of the country, including in the Azov-Black Sea and Caspian basins – they will become the most important section of the North-South Corridor, which will provide stable connectivity with the Middle East and Southern Asia. We expect freight traffic along this route to begin growing steadily in the near future.

But foreign trade is not our only priority. Russia intends to increase scientific, technological, cultural, humanitarian and sports cooperation based on equality and mutual respect between partners. At the same time, our country will strive for responsible leadership in all these areas.

The second principle of our long-term development is a reliance on entrepreneurial freedom. Every private initiative aimed at benefiting Russia should receive maximum support and space for implementation.

The pandemic and the more recent events have confirmed how important flexibility and freedom are in the economy. Russian private businesses – in tough conditions, amid attempts to restrain our development by any means – have proved they can compete in global markets. Private businesses should also be credited for Russia’s adaptation to rapidly changing external conditions. Russia needs to ensure the dynamic development of the economy – naturally, relying on private business.

We will continue to reduce administrative hurdles. For example, in 2016–2018, we imposed a moratorium on routine audits of small businesses. Subsequently, it was extended through 2022. In 2020, this moratorium was extended to cover mid-sized companies. Also, the number of unscheduled audits decreased approximately fourfold.

We did not stop at that, and last March, we cancelled routine audits for all entrepreneurs, regardless of the size of their businesses, provided their activities do not put people or the environment at high risk. As a result, the number of routine audits has declined sixfold compared to last year.

Why am I giving so many details? The point is that after the moratorium on audits was imposed, the number of violations by entrepreneurs – this was the result – has not increased, but rather it has gone down. This testifies to the maturity and responsibility of Russian businesses. Of course, they should be offered motivation rather than being forced to observe regulations and requirements.

So, there is every reason to take another radical step forward, that is, to abandon, for good and on a permanent basis, the majority of audits for all Russian businesses, except on risky or potentially dangerous activities. Everyone has long since understood that there was no need to check on everyone without exception. A risk-oriented approach should be at work. I ask the Government to develop the specific parameters of such a reform in the next few months.

There is another very sensitive topic for business, which has also become important today for our national security and economic resilience. To reduce and bring to a minimum all sorts of abuse and loopholes to exert pressure on entrepreneurs, we are consistently removing loose regulations from criminal law that are applied to economic crimes.

Last March, a law was signed, under which tax-related criminal cases against entrepreneurs shall only be brought before a court by the tax service – there is no other way. Soon a draft law will be passed on reducing the statute of limitations for tax-related crimes and on rejecting lawsuits to initiate criminal proceedings after tax arrears have been paid off.

Working comprehensively, although prudently, we need to decriminalise a wide range of economic offenses, for instance, those that punish businesses without a licence or accreditation. This is a controversial practice today because our Western partners illegitimately refuse to provide such licenses.

Our own agencies must not single-handedly make our businesses criminally liable for actually doing nothing wrong. The problem is this, and small businesses understand it very well – if a licence has expired, and Western partners refuse to extend it, what are businesses to do, wrap up operations? By no means, let them work. State oversight should continue, but there should be no undue interference in business.

It also makes sense to think about raising the threshold of criminal liability for unpaid customs duties and other such taxes. Additionally, we have not for a long time reconsidered the parameters of the terms ‘large’ and ‘very large’ economic loss for the purposes of economic offences despite inflation accruing 50 percent since 2016. The law now fails to reflect the current realities and needs to be corrected.

We need to reconsider the conditions for detaining entrepreneurs and for extending preliminary investigations. It is no secret that these practices have long been used inappropriately.

Businesses have been forced to cease operations or go bankrupt even before the investigation is over. The reputation of the owners and of the brand name suffers as a result, not to mention the direct financial loss, loss of market share and jobs.

I want to ask law enforcement to put an end to these practices. I also ask the Government and the Supreme Court to draft appropriate legislation before October 1 of this year.

In addition, at the Security Council, a special instruction was given to look into criminal cases being opened without later proceeding to court. The number of such cases has grown in recent years. We know the reasons. A case is often opened without sufficient grounds or to put pressure on individuals. We will discuss this in autumn to take legislative action and change the way our law enforcement agencies work.

It goes without saying that regional governments play a major role in creating a modern business environment. As is customary during the St Petersburg Forum, I highlight the regions that have made significant progress in the National Investment Climate Rankings compiled by the Agency for Strategic Initiatives.

There have been changes in the top three. Moscow and Tatarstan have remained at the top and were joined by the Moscow Region which, in a span of one year, went from eighth place to the top three. The leaders of the rankings also include the Tula, Nizhny Novgorod, Tyumen, Novgorod, and Sakhalin regions, St Petersburg and Bashkortostan.

Separately, I would like to highlight the regions that have made the greatest strides such as the Kurgan Region, which moved up 36 spots; the Perm Territory and the Altai Territory, up 26 spots; Ingushetia, up 24 spots; and the Ivanovo Region which moved up 17 spots.

I want to thank and congratulate our colleagues in the regions for their good work.

The federal government and regional and municipal governments should focus on supporting individual business initiatives in small towns and remote rural communities. We are aware of such stories of success. That includes developing popular software and marketing locally produced organic food and environmentally friendly products nationwide using domestic websites.

It is important to create new opportunities, to introduce modern retail formats, including e-commerce platforms, as I mentioned above, and to cut the logistics, transportation and other costs, including by using upgraded Russian Post offices.

It is also important to help small business employees, self-employed individuals and start-up entrepreneurs acquire additional skills and competencies. Please include corresponding measures tailored specifically to small towns and rural and remote areas as a separate line in the national project for promoting small and medium-sized businesses.

Today I would like to address our officials, owners of large companies, our business leaders and executives.

Real, stable success and a sense of dignity and self-respect only come when you link your future and the future of your children with your Fatherland. We have maintained ties with many people for a long time, and I am aware of the sentiments of many of the heads and owners of our companies. You have told me many times that business is much more than just making a profit, and I fully agree. It is about changing life around you, contributing to the development of your home cities, regions and the country as a whole, which is extremely important for self-fulfilment. There is nothing like serving the people and society. This is the meaning of your life and work.

Recent events have reaffirmed what I have always said: it is much better at home. Those who refused to hear that clear message have lost hundreds of millions, if not billions of dollars in the West, in what looked like a safe haven for their assets.

I would like to once again say the following to our colleagues, those who are both in this audience and those who are not here: please, do not fall into the same trap again. Our country has huge potential, and there are more than enough tasks that need your contribution. Invest here, in the creation of new enterprises and jobs, in the development of the tourism infrastructure, support schools, universities, healthcare and the social sphere, culture and sport. I know that many of you are doing this. I know this, but I wanted to say it again.

This is how the Bakhrushin, Morozov, Shchukin, Ryabushinsky, Akchurin, Galeyev, Apanayev, Matsiyev, Mamontov, Tretyakov, Arsanov, Dadashev and Gadzhiyev families understood their noble mission. Many Russian, Tatar, Buryat, Chechen, Daghestani, Yakutian, Ossetian, Jewish, Armenian and other merchant and entrepreneurial families did not deprive their heirs of their due share, and at the same time they etched their names in the history of our country.

Incidentally, I would like to note once again that it remains to be seen what is more important for potential heirs: money and property or their forefathers’ good name and service to the country. The latter is something that cannot be squandered or, pardon my language, wasted on drink.

A good name is something that will always belong to your descendants, to future generations. It will always be part of their lives, going from one generation to another, helping them and making them stronger than the money or property they might inherit can make them.

A responsible and well-balanced macroeconomic policy is the third guiding principle of our long-term development. In fact, this policy has largely enabled us to withstand the unprecedented pressure brought on by sanctions. Let me reiterate that this is an essential policy in the long term, not just for responding to the current challenges. We will not follow in the footsteps of our Western colleagues by replicating their bitter experience setting off an inflation spiral and disrupting their finances.

Our goal is to ensure robust economic growth for years to come, reducing the inflation burden on our people and businesses and achieving the mid- and long-term target inflation rate of four percent. Inflation was one of the first things I mentioned during my remarks, so let me tell you this: we remain committed to this target of a four-percent inflation rate.

I have already instructed the Government to draft proposals regarding the new budget guidelines. They must ensure that our budget policy is predictable and enables us to make the best use of the external economic conditions. Why do we need all this? To put economic growth on a more stable footing, while also delivering on our infrastructure and technological objectives, which provide a foundation for improving the wellbeing of our people.

True, some international reserve currencies have set themselves on a suicidal path lately, which is an obvious fact. In any case, they clearly have suicidal intentions. Of course, using them to ‘sterilise’ our money supply does not make any sense. Still, the principle of planning one’s spending based on how much you earn remains relevant. This is how it works, and we understand this.

Social justice is the fourth principle underpinning our development. There must be a powerful social dimension when it comes to promoting economic growth and business initiatives. This development model must reduce inequality instead of deepening it, unlike what is happening in other countries. To be honest, we have not been at the forefront when it comes to delivering on these objectives. We have yet to resolve many issues and problems in this regard.

Reducing poverty and inequality is all about creating demand for Russian-made products across the country, bridging the gap between regions in terms of their capabilities, and creating new jobs where they are needed the most. These are the core economic development drivers.

Let me emphasise that generating positive momentum in terms of household income growth and poverty reduction are the main performance indicators for government agencies and the state in general. We need to achieve tangible results in this sphere already this year, despite all the objective challenges we face. I have already assigned this task to the Government.

Again, we provide targeted support to the most vulnerable groups – pensioners, families with children, and people in difficult life situations.

Pensions are indexed annually at a rate higher than inflation. This year, they have been raised twice, including by another 10 percent on June 1.

The minimum wage was also increased by 10 percent at the same time, and so was the subsistence minimum – a reference figure used to calculate many social benefits and payments – accordingly, these benefits should also grow, increasing the incomes of about 15 million people.

In recent years, we have built a holistic system to support low-income families with children. Women are entitled to state support from the early stages of pregnancy and until the child reaches the age of 17.

People’s living standards and prosperity are the most important demographic factors; the current situation is quite challenging due to several negative demographic waves that have recently overlapped. In April, less than a hundred thousand children were born in Russia, almost 13 percent less than in April 2020.

I ask the Government to continue to keep the development of additional support measures for families with children under review. They must be far-reaching and commensurate with the magnitude of the extraordinary demographic challenge we are facing.

Russia’s future is ensured by families with two, three and more children. Therefore, we need to do more than provide direct financial support – we need to target and direct the healthcare system, education, and all areas that determine the quality of people's lives towards the needs of families with children.

This problem is addressed, among other approaches, by the national social initiatives, which regional teams and the Agency for Strategic Initiatives are implementing together. This autumn, we will assess the results of their work, review and rank the Russian regions by quality of life in order to apply the best experiences and practices as widely as possible throughout the country.

Prioritising the development of infrastructure is the fifth principle underlying Russia’s economic policy.

We have scaled up direct budget spending on expanding transport corridors. An ambitious plan for building and repairing the federal and regional motorway core network will be launched next year. At least 85 percent of the roads are to be brought up to code within the next five years.

Infrastructure budget lending is a new tool that is being widely used. The loans are issued for 15 years at a 3 percent APR. As I mentioned before, they are much more popular than we originally thought. The regions have multiple well-thought-out and promising projects that should be launched at the earliest convenience. We will look into how we can use this support measure. We debated this issue last night. What I am saying is that it is a reliable tool.

Upgrading housing and utilities services is a separate matter with a backlog of issues. The industry is chronically underinvested to the tune of 4.5 trillion rubles. Over 40 percent of networks need to be replaced, which accounts for their low efficiency and big losses. About 3 percent of the networks become unusable every year, but no more than 2 percent get replaced, which makes the problem even worse every single year.

I propose consolidating resources and launching a comprehensive programme for upgrading housing and utilities, and synchronizing it with other infrastructure development and housing overhaul plans. The goal is to turn the situation around and to gradually reduce the number of dated networks, just like we are doing by relocating people from structurally unsafe buildings or fixing roads. We will discuss in detail housing and utilities and the construction complex with the governors at a State Council Presidium meeting next week.

On a separate note, I propose increasing resources to fund projects to create a comfortable urban environment in small towns and historical settlements. This programme is working well for us. I propose allocating another 10 billion rubles annually for these purposes in 2023–2024.

We will allocate additional funds for renovating urban areas in the Far Eastern Federal District. I want the Government to allocate dedicated funds to this end as part of the programmes for infrastructure budget lending and housing and utilities upgrading, as well as other development programmes.

Promoting comprehensive improvements and development for rural areas is a top priority for us. People who live there are feeding the country. We now see that they are also feeding a major part of the world, so they must live in comfort and dignity. In this connection, I am asking the Government to allocate additional funding for the corresponding programme. Export duties on agricultural produce can serve as a source of funding here. This is a permanent source of revenue. Of course, there can be fluctuations, but at least this ensures a constant flow of revenue.

On a separate note, I suggest that we expand the programmes for upgrading and modernising rural cultural centres, as well as regional theatres and museums by allocating six billion rubles for each of these projects in 2023 and 2024.

What I have just said about cultural institutions is something that people are really looking forward to, something they really care about. Let me give you a recent example: during the presentation of the Hero of Labour medals, one of the winners, Vladimir Mikhailov from Yakutia, asked me directly for help with building a cultural centre in his native village. This was during the part of the ceremony where we meet behind closed doors. We will definitely do this. The fact that people are raising this issue at all levels shows that they are really eager to see these projects implemented.

At this point, I would like to make a sidenote on a topic that is especially relevant now, since we are in early summer, when Russians usually take their summer vacations.

Every year, more and more tourists want to visit the most beautiful corners of our country: national parks, wildlife sanctuaries and nature reserves. According to available estimates, this year this tourist flow is expected to exceed 12 million people. It is essential that all government bodies, businesses and tourists are well aware of what they can and cannot do in these territories, where they can build tourism infrastructure, and where such activity is strictly prohibited because it endangers unique and fragile ecosystems.

The draft law governing tourism in special protected territories and regulating this activity in a civilised manner is already in the State Duma.

In this context, I would like to draw your attention to the fact that we must figure out in advance all the relevant estimates and ensure that the decisions are well-balanced. We need to be serious about this.

I would like to place special emphasis on the need to preserve Lake Baikal. In particular, there is a comprehensive development project for the city of Baikalsk, which must become a model of sustainable, eco-sensitive municipal governance.

This is not just about getting rid of the accumulated negative environmental impacts from the Baikalsk Pulp and Paper Mill, but about setting a higher standard of living for the city and transforming it into a signature destination for environmental tourism in Russia. We need to rely on the most cutting-edge technologies and clean energy when carrying out this project.

Overall, we will be developing clean technology to achieve the goals we set in the environmental modernisation of production facilities, and to reduce hazardous emissions, especially in large industrial centres. We will also continue working on closed-loop economy projects, green projects and climate preservation. I spoke about these issues in detail at this forum last year.

Consequently, the sixth cross-cutting development principle that consolidates our work is, in my opinion, achieving genuine technological sovereignty, creating an integral system of economic development that does not depend on foreign institutions when it comes to critically important components. We need to develop all areas of life on a qualitatively new technological level without being simply users of other countries’ solutions. We must have technological keys to developing next-generation goods and services.

In the past years, we have focused a lot of attention on import substitution, succeeding in a range of industries, including agriculture, pharmaceuticals, medical equipment, defence production and several others.

But I should stress that there is a lot of discussion in our society about import substitution. And it is not a cure-all nor a comprehensive solution. If we only imitate others when trying to replace foreign goods with copies, even if very high-quality ones, we may end up constantly playing catch-up while we should be one step ahead and create our own competitive technologies, goods and services that can become new global standards.

If you remember, Sergei Korolyov did not just copy or locally upgrade captured rocket technology. He focused on the future and proposed a unique plan to develop the R-7 rocket. He paved the path to space for humankind and in fact set a standard for the entire world, for decades ahead.

Proactively – this is how founders of many Soviet research programmes worked at the time. And today, building on that groundwork, our designers continue to make progress and show their worth. It is thanks to them that Russia has supersonic weapons that do not exist in any other country. Rosatom remains the leader in nuclear technology, developing our fleet of nuclear-powered icebreakers. Many Russian AI and Big Data solutions are the best in the world.

To reiterate, technological development is a cross-cutting area that will define the current decade and the entire 21^st century. We will review in depth our approaches to building a groundbreaking technology-based economy – a techno economy – at the upcoming Strategic Development Council meeting. There is so much we can discuss. Most importantly, many managerial decisions must be made in the sphere of engineering education and transferring research to the real economy, and the provision of financial resources for fast-growing high-tech companies. We will also discuss the development of cross-cutting technologies and progress of digital transformation projects in individual industries.

To be clear, of course it is impossible to make every product out there, and there is no need for that. However, we need to possess critical technologies in order to be able to move swiftly should we need to start our own production of any product. This is what we did when we quickly started making coronavirus vaccines, and most recently launched the production of many other products and services.

For example, after dishonest KamAZ partners left the Russian market, their place was taken by domestic companies, which are supplying parts for traditional models and even advanced mainline, transport and heavy-duty vehicles.

The Mir card payment system has successfully replaced Visa and MasterCard on the domestic market. It is expanding its geography and gradually gaining international recognition.

The St Petersburg Tractor Plant is another case in point. Its former foreign partner stopped selling engines and providing warranty maintenance. Engine builders from Yaroslavl and Tutayev came to the rescue and started supplying their engines. As a result, the output of agricultural equipment at the St Petersburg Tractor Plant hit a record high in March-April. It did not decrease, but hit an all-time high.

I am sure there will be more positive practices and success stories.

To reiterate, Russia possesses the professional, scientific and technological potential to develop products that enjoy high demand, including household appliances and construction equipment, as well as industrial and service equipment.

Today's task is to scale up the capacities and promptly get the necessary lines up and running. One of the key issues is comfortable work conditions for the businesses as well as the availability of prepared production sites.

I ask the Government to submit key parameters of the new operating guidelines for industrial clusters by the autumn. What is critical here?

First – financing. The projects launched in these clusters must have a long-term credit resource for up to ten years at an annual interest rate below seven percent in rubles. We have discussed all these issues with our economic agencies as well. Everyone agreed, so we will proceed.

Second – taxation. The clusters must have a low level of relatively permanent taxes including insurance contributions.

Third – supporting production at the early, kick-off stage, forming a package of orders including subsidising the purchases of ready products by such enterprises. This is not an easy issue but I think subsidies may be required. They are needed to ensure the market. We just have to work it out.

Fourth – simplified administration including minimal or no inspections as well as convenient customs monitoring that is not burdensome.

Fifth, and probably the most important – we need to set up mechanisms of guaranteed long-term demand for the new innovative products that are about to enter the market. I remind the Government that such preferential terms and respective industrial clusters must be launched as early as January 1, 2023.

On a related note, I want to say that both new and already operating points of industrial growth must attract small businesses and engage them in their orbit. It is crucial for entrepreneurs, for small entities to see the horizon and grasp their prospects.

Therefore, I ask the Government together with the SME Corporation [Federal Corporation for the Development of Small and Medium Enterprises] and our biggest companies to launch an instrument for long-term contracts between companies with state participation and SMEs. This will ensure demand for the products of such enterprises for years ahead whereas suppliers can confidently undertake commitments to launch a new manufacturing facility or expand an existing one to meet that order.

Let me add that we have substantially shortened the timeframe for building industrial sites and eliminated all the unnecessary burdensome procedures. Still, there is much more we can do here. We have things to work on, and places to go from here. For example, building an industrial facility from the ground up takes anywhere from eighteen months to three years, while the persistently high interest rates make it harder to buy suitable land plots.

Given this, I suggest launching industrial mortgages as a new tool for empowering Russian businesses to quickly start making all the products we need. What I mean are preferential long-term loans at a five-percent interest rate. Companies planning to buy new manufacturing space will be entitled to these loans. I am asking the Government to work out all the details with the Russian banking sector so that the industrial mortgage programme becomes fully operational soon.

Changes in the global economy, finances and international relations are unfolding at an ever-growing pace and scale. There is an increasingly pronounced trend in favour of a multipolar growth model in lieu of globalisation. Of course, building and shaping a new world order is no easy task. We will have to confront many challenges, risks, and factors that we can hardly predict or anticipate today.

Still, it is obvious that it is up to the strong sovereign states, those that do not follow a trajectory imposed by others, to set the rules governing the new world order. Only powerful and sovereign states can have their say in this emerging world order. Otherwise, they are doomed to become or remain colonies devoid of any rights.

We need to move forward and change in keeping with the times, while demonstrating our national will and resolve. Russia enters this nascent era as a powerful sovereign nation. We will definitely use the new immense opportunities that are opening up for us in this day and age in order to become even stronger.

Thank you for your attention.

***

Whenever any decisions are taken, the key issues must be to singled out. What is key for us? Being independent, sovereign and ensuring future-oriented development both now and for the future generations? Or having packaging today?

Unless we have sovereignty, we will soon have to buy everything and will only produce oil, gas, hemp fibre, saddles and sell rough logs abroad.

It is inevitable. I have already said so in my speech: only sovereign countries can expect to have a sovereign future. That does not mean, however, that we need to plunge back into a situation of 30, 40 or 50 years ago.

Regarding packaging. I do not think it is such a complicated thing that either our partners from other countries can replace, who will be pleased to occupy this market sooner or later, or we will be able to make ourselves.

***

Of course, we will able to replace it.

The question is about a totally different matter. We keep talking about import substitution. In my speech here I also said – and I will just add a couple of words so as not to take too much time while answering only one question.

The issue is not about import substitution, the issue is to establish our own capabilities based on progress in education, science and new promising schools of engineering. We will always be given packaging materials and other simple things, event telephones and smartphones. What we have never been given and never will be is critically important technologies. We have never been given them before even though we had problem-free relations with our Western partners in the previous decades. This is the problem.

And when we begin to stand up for our rights, we are immediately slapped with some sanctions and restrictions; this is what the problem is all about. Therefore, we must commit ourselves to that and have the capacity to reproduce critically important technologies on the basis of what I mentioned. And with that base we will always be able to manufacture the goods you mentioned: packaging materials, telephones and smartphones. If we realise that and keep focusing on solving fundamental issues, we will resolve everything else without a problem.

Let me reiterate: others are already coming to that place – those who produce the packaging materials, those who produce the paints. We are also starting to produce paints and other consumer goods as well as goods employed in industry in a broader sense. We can make anything – I have absolutely no doubt about that.

Obviously, some things will be lost, other things will be made on a new basis, much more advanced – the way it happened earlier. Therefore, when we talk about import substitution, we will substitute something while other things will have to be done on a totally new promising basis of our own making.

***

My colleague said we sometimes have disagreements. But of course, behind closed doors, we always have debates. Even so, we always treat each other with respect and always look for and find compromises, which is extremely important.

You spoke about pressure from the outside. President Tokayev mentioned the level of our mutual trade in his speech. Pressure or no pressure, this is impossible to cancel – our trade stood at US$24 billion last year and exceeded US$12 billion in the first four months of this year. If we continue like this, just calculate how much it will be. There will be more… [...] 

Thirty-six, maybe close to 40. This cannot be reversed under any pressure. Hundreds and thousands of jobs and the welfare of millions of people depend on it. How do you cancel that?

No more than you could cancel… The Americans have cancelled, sanctioned our fertilisers, and then lifted the sanctions; food wasn’t sanctioned at all. Everyone wants to eat, the whole world. What sanctions can cancel that?

As for the blitzkrieg they have tried against our economy, it is clear that it did not work out. As Mark Twain wrote, “The reports of my death are greatly exaggerated.” The same is true of the blitzkrieg against Russia.

As for the EAEU, our trade is growing steadily with all countries – faster among the members than with third countries, but trade with third countries is growing, too. That is, the association is not preventing its members from maintaining relations with third countries. This is the way things are, and it is very good.

My colleague has mentioned Chinese investments; but Russian investment in Kazakhstan has reached US$7 billion.

***

Well, China’s population is 1.5 billion, while we have 146 million; there is a difference. But even the US$7 billion invested in specific industries in Kazakhstan are certainly of great importance. Moreover, we have a very rich programme of industrial cooperation – that is what's important. And not only cooperation inherited from the Soviet Union, but also new projects using new technologies. That is very important.

How do you cancel this? It would be simply impossible, no matter how much one would have liked to. So, yes, problems are being created for us, but they will certainly be overcome.

***

As I have already said in my remarks, the situation on the global food market is deteriorating. Make no mistake, this is not our fault. It all started with soaring inflation and increasing money supply in the major global economies in Europe and North America. This is how it all started – they did this themselves, and then made it even worse, of course, by imposing sanctions against Russia. I am referring primarily to logistics, financial services, insurances, etc.

Having people in these countries suffer from hunger is something we would very much like to avoid. Just recently, I had a meeting with African Union representatives. I told them that we will do everything we can to satisfy the interests of all our regular customers who buy our grain. I would like to reaffirm this statement. By the way, in recent years we have been exporting wheat to Kazakhstan, too, including this year. I have already mentioned that this season, which starts this summer and runs until next summer, we will export 50 million tonnes of grain. This is a very serious amount. Russia retains its lead in global wheat exports. We are the world’s number one wheat exporter.

However, let me tell you this: the fact that some countries may be negatively affected is not something that makes us happy. We never counted on that. On the contrary, we hope that common sense prevails and that the situation on the international arena calms down so that everyone starts treating each other’s interests with respect, putting the way we operate back on track.

By the way, I have no doubt that as time goes by, many of our partners, at least in Europe, will return to the Russian market and will once again enjoy working here. I have no doubt about that. They will be compelled to do so, while we will not stand in their way. We are open to the entire world, as I have already said. However, they must realise that we need to treat each other with respect.

***

You know, multi-polarity is not just something we would prefer. It is inevitable. And when I said that somebody is trying to freeze international relations at the stage where they were 30 years ago, just after the collapse of the Soviet Union, I said that people do not understand that moving forward is inevitable. New centres of power emerge. They are strong, dynamic and have great potential. Some may not like it. They may also not like China’s power. Let me remind you, China has become a number one economy in the world in terms of economic volume and purchasing power parity. It is a fact supported by statistics. Of course, a country with 1.5 billion people has a lower GDP per capita than, for example, the United States or European countries. But it is the biggest economy.

Considering the specifics of China’s economy, it means that the Chinese leadership can allocate enormous resources for promising areas of development, including science, education and culture. It is very important and creates huge development prospects for the country.

The same is true of India. They also have about 1.5 billion people and a market economy. This country is developing very fast. Prime Minister Modi is a very progressive person who looks ahead to the future. Take other Asian countries such as Indonesia. Its population is over 300 million and, by the way, it has the largest number of Muslims in the world.

African countries are making strides in economic development. Latin America is growing at a very fast pace. Yes, they do have problems there. But who does not? Problems are the hallmark of the emerging economies, but the potential is simply staggering and impossible not to see.

So, multipolarity is unavoidable and those who cling to their imaginary global leadership are making a colossal mistake. This mistake will cost them dearly, I have no doubt about it. This is not a threat at all. This will simply happen as a matter of course.

With regard to the People’s Republic of China and our relations with China, with Asian countries in general and with China, in particular, we did not start building them because of the events of recent years or months. We have been doing this because Asia, China, in particular, have clearly become new global centres of growth.

Everyone understands, sees and is aware of it. Just take a look at China's GDP growth rates. Yes, lately they have a little bit … They used to be 7 or more percent, now they are down to 5, but it does not really matter, since an adjustment was clearly inevitable. But they are absolute leaders, you see?

What about the GDP growth in the United States in recent years? How much was it? I think 1.7 percent and even less in the eurozone. In Asia, though, it was 5 and more. Those are the global trends and we have been aligning our relations accordingly for many years now.

Our trade with China is US$140 billion and will keep growing. This year, it will probably hit a record high. Not because we have to do so because of the current political situation, but because this is an objective global picture.

We find it interesting and beneficial to be partners with China, especially since we enjoy stable and trust-based political relations. I have excellent friendly personal relations with President Xi Jinping in the full sense of the word, which creates a good atmosphere for building ties between our countries. However, this does not mean that China should play along with us or support us every step of the way. We do not need this, after all.

There are interests of the state. Just like us, the Chinese leadership is acting primarily out of its national interests, but our interests are not at odds with their interests, and that is what matters. When issues arise – and they always arise at the agency level in the course of work – the nature and quality of relations between our countries makes it possible for us to always find solutions. I am confident it will stay that way going forward.

***

This is a delicate sphere that I just spoke about. You are now speaking as an onlooker and in the interests of the business community, who are the majority in this audience. I understand these concerns. That is what I was talking about, that is why I was talking about it. But there is another side to it, namely, the interests of society and ordinary citizens who are also watching. When millions of people see illegal or unlawful actions perpetrated by the business community, they wonder why the state is not doing anything about it to protect ordinary citizens. Striking a balance is not that easy.

By the way, you have just mentioned some pressure from Russia. I would like us to return to today’s reality. And what about our neighbours? No pressure from them? They robbed our entrepreneurs, took their property for no reason at all, punishing them for their activities, their work in Russia. This is sheer nonsense. Where are these principles of the inviolability of private property? Often sanctions and property withdrawal affect people who have nothing to do with the state or decision-making by national political leaders. They are simply individuals who worked honestly without violating the law either at home or abroad. Yet, their property was taken away. What is this? This is simply beyond the pale, contrary to common sense. They are biting the hand that feeds them. Frankly speaking, many people linked with the Western economies were in favour of developing relations with them without being conduits of Western interests. But now that they were deprived of everything, what support will they give? They will say: “Darn you!”

***

What am I talking about? I am saying nothing like this happens here. Of course, we have problems or else I would not be talking about them. I keep saying and repeating that faced with the current difficulties we can respond effectively only by expanding freedom for people in general and businesses in particular. This also applies to the functioning of law-enforcement bodies. There is room for improvement here as well. This is why the most impressive example is the number of proceedings that were initiated but not brought to court. Why are cases started but fail to reach the court? Most likely, they were started to exert pressure on businesses. Does this problem exist? Of course, it does. Therefore, the main point is not to ignore this, and, most important, not to shut our eyes to this, and we are not going to. On the contrary, we are going to carefully cut red tape in the law-enforcement system, without infringing on the interests of society as a whole. We are going to make law-enforcement work for the interests of entire society, including the business community on which a lot depends today and which has shown its maturity, patriotism and efficient performance. I assure you this packaging and dyes will be made, in part, by Russian businesses. Aware of this, our state will certainly do all it can to support these people. And we will tailor accordingly the work of our law-enforcement bodies.

To reiterate, there are dishonest people there as well, no question about it. Look at the number of dishonest law-enforcement officers behind bars. Work is underway to clean up their ranks as well.

It is likewise important to finetune the regulatory framework in a way that will automatically preclude any excessive pressure from being exerted. This is what we will focus on. Rest assured, we understand this and will keep working on it.

With regard to Kazakhstan, I am aware that President Tokayev is paying great attention to this as well. We have discussed these matters many times. It is no coincidence that – although, frankly, I am not really supportive of this – many Russian IT specialists go to work in Kazakhstan because the terms are good. We will follow Kazakhstan’s example in this regard.

***

Do you see this? You spoke about protecting the interests of entrepreneurs, the entrepreneur community.

<...>

My Kazakhstani colleague was just talking about returning illegally exported capital from abroad. It was taken illegally, and now the state is taking it back. Our entrepreneurs, in any case many of them, took their capital abroad legally, and they have been robbed there, do you understand? So, what is the conclusion? What I said in my speech: you need to invest at home, in your home country. And our task is to ensure the safety of these investments. We will do so.

***

If it weren’t for this administrative guillotine, that Mr Medvedev spoke about when he was President, you would have had 133 inspections instead of 33.

<...>

That is exactly what it would be like, meaning that the guillotine is working. Vast numbers, thousands of outdated rules have been repealed. Margarita, you are wrong, most have really been repealed and are not applicable anymore. I am sure if we gave the businesspeople in this audience a chance to speak, they would confirm this.

However, many would support you, because, indeed, not all has been done in this regard. That is why I said today that all inspections must be suspended. There is no need to run around doing inspections. Only businesses that pose a risk should be inspected. In other words, inspectors should go only to businesses that may pose a threat to peoples’ lives and health, and do everything else remotely, monitor operations, and create an environment where the business community will not be tempted to break the rules. It turns out that this is possible. So, we have accomplished a lot on this track, but we will not stop; we’ll continue to move forward.

***

I spoke about this publicly at an online international event and made clear that the old capitalist system’s models centred on making profit have run their course.

The world has entered a phase where it is necessary to and everyone has to think not only about this, because if we continue like that into the future, the world will become highly unbalanced and threats will build up. This is the problem and the challenge of our time. So, in order to maintain this balance, we need to change our ways, balancing and paying attention to each and every component that may upset this balance.

This is true of the current situation, for example, with food and fertilisers and so on. If the world’s largest economies keep vacuuming up the goods, including food products, from the global market and take them home, then problems will accrue.

This may lead to more than famine. This will lead to new migration flows that will overwhelm, are already overwhelming the United States, among other countries. Whether they want to build a wall on the border with Mexico or not, the flows are still there and are not subsiding. The former and current presidents can do as much infighting as they want, but migrant flows are still there. If, God forbid, Africa gets hit by famine, economic migration to Europe will increase.

What are we supposed to do with this? The solution is very simple. All you need to do is put an end to the style of international relations where you think only about your beloved self. That is all there is to it. If this continues as it is, it will give rise to complex and severe problems. So, of course, we need to adopt a different governance and regulation model. This is a complex process, but I think that eventually the international community will come to realise this.

With regard to us, I have already made clear that being part of the general paradigm, the main movement and the global trend, we must prioritise what my colleague from Kazakhstan, the President of Kazakhstan, pointed out: we must focus primarily on economic growth based on technological development, as well as innovative economic management and socio-political models. Then, we will be able to provide leadership in the areas where we have competencies.

***

I will start with the first part of your remark.

You say that some people are saying they are ashamed of being from Russia. You know who should be ashamed – the people who do not tie their fate and their lives, the fate of their children, with our country. Not just ashamed. They simply do not want to have problems in the regions where they want to live and want their children to be brought up and live. This is a separate group of people.

Sensible people who tie their fate and the fate of their family with Russia may be worried about the ongoing events, but deep down want Russia to become stronger, more confident and more sovereign, and to be confident about its future. Anyone who wants their children to live here cannot think otherwise. That is what this is all about. So, ashamed or not ashamed are different categories altogether.

With regard to ongoing developments, hostilities are always a tragedy. These are just forced actions on our part, inevitably forced, that is what it is all about. We were just pulled to this line. I have to remind everyone how it all happened. No matter what previous pro-Western governments in Ukraine were, we worked just fine with all of them. Mr Yushchenko and Ms Tymoshenko were absolutely pro-Western leaders.

The civilisational choice. Pardon my language, but what kind of civilisational choice are they blabbering about? They stole money from the Ukrainian people, hid it in the banks and just want to protect it. And the best way to protect it is to say that this is a civilisational choice. They began to pursue an anti-Russian policy in hopes that whatever they do, their money would be protected there. No doubt, this is what happening. They get away with anything. This is the whole point of this civilisational choice.

Why stage a coup in Ukraine in 2014? That is what got everything going. Three foreign ministers from three European countries – Germany, France and Poland – came to Ukraine to attend, as guarantors, the ceremony for signing agreements between then President Yanukovych and the opposition. I got a call from President Obama, “Let’s get things to quiet down there.” – “Let’s.” A day later, a coup took place. Why stage a coup at a time where the opposition could have come to power in a democratic way? Go to the polls and win… No, for whatever reason they had to stage a bloody coup. This is how it all started.

Now, they are saying: let’s forget it. No, we will always remember it, because this is the reason. The reason is the people who made this coup possible. What were the guarantors who signed the agreement between President Yanukovych and the opposition supposed to do? There was a coup, whereas they guaranteed a peaceful process. What were they supposed to do? They should have come and said something like “guys, that will not do. Get back on the normal political track and go to the polls.” Instead, they started handing out cookies in the squares and supporting the coup. What for?

That triggered the events in Crimea. They chose not to respect the choice made by the Crimean people, and the first volley of sanctions on Russia followed. They carried out two, even three large-scale military operations in Donbass, shooting at civilians for eight long years with no one paying attention. Kiev refused to comply with the Minsk agreements, and it was fine with some people. That is what caused the situation at hand. That is why it all happened.

In addition, they started creating an anti-Russian foothold in Ukraine. How about we create an anti-American foothold on the borders with the United States, say, in Mexico? Do you know what will happen next? For some reason, it never even occurs to anyone to do something like that in the United States. At some point, we even removed our military bases from Cuba. You see, no one is even looking at it and does not want to look. Meanwhile, they are creating such threats for us. We told them a hundred times, a thousand times: let’s talk. But no.

Why such a position? Where does this dismissive stance towards everyone, including us, come from? Does it come from the imaginary greatness that gradually developed after the collapse of the Soviet Union? We are aware of that.

With regard to what we are going to do next, we are going to protect the interests of the people for whom our soldiers are fighting there, getting wounded and dying. This is the only way. What is the point of these sacrifices otherwise?

We will support the residents of these territories. In the end, the future of the people who live there is up to them to decide. We will respect any choice they make.

***

Of course, we can hear such rhetoric. Where does it come from? It comes from their own statements. One irresponsible politician blurts out something, and another one follows suit at a very high level. For example, top foreign ministry officials talk profusely on this subject.

Are we going to keep silent? We reply accordingly. Following our reply, they start finding fault with us and saying that Russia is making threats.

We are not threatening anyone. However, everyone should know what resources we have, and what we will use, if need be, to defend our sovereignty. This is an obvious thing. 

What special operations are you talking about? They unleashed full-scale wars there.

<...>

They virtually destroyed Iraq. They came …

<...>

Libya has still not been able to restore its statehood. How many years did they fight in Afghanistan?

<...>

[On American withdrawal from Afghanistan]

It wasn’t just shameful. We must admit openly that it was an inglorious withdrawal. 

This is not even the main thing. Most importantly, everything unfolded in line with their wishes, and not the way it should have. In many cases, including the dismembering of Yugoslavia, new countries and new interests emerged after the country ceased to exist. Of course, there were many internal disagreements; this is obvious. However, they helped aggravate these disagreements. Later, they started pushing Kosovo away from Serbia, and so on. It is hard to understand why that was necessary.

Speaking of our actions … By the way, what is the legal aspect of this case? It completely tallies with international law. When Kosovo was seceding, the International Court of Justice ruled, under the pressure of Western countries, that, according to the UN Charter, when any territory secedes from a state, its administration does not need to request permission to do so from central authorities. The International Court of Justice adopted this generalised decision with regard to Kosovo, but it also has broader connotations and sets a precedent. All right, in that case, the Donbass republics do not need to request permission from the authorities in Kiev. They declared independence. Did we have the right to recognise them? Of course, we did. We recognised them and signed a treaty on mutual assistance. We are providing them with military assistance under this treaty and Article 51 of the UN Charter. Did we have this right? We did, in full compliance with the UN Charter, whether anyone likes it or not. They did this themselves, they set a precedent. Consequently, our actions are absolutely legitimate. 

However, the start of hostilities in Iraq did not have this status because no one there had invited anyone, and they did not sign any treaties with anyone. Nor did anyone recognise any newly-established state entities. They simply came and bombed out the country. They did the same in Libya. Why did they do it? They did it because, as I have already said, they appointed themselves the Almighty’s representatives on Earth.

Now we hear: behave or live by the rules. What rules? Who invented these rules and all this nonsense? There is only one rule that must be obeyed – international public law. What is it? It is agreements between countries that are a sort of compromise, which are signed by respective states. If someone invented these rules to enforce them on other countries, they will never work, it is obvious.

We proceed from the fact that sooner or later, and the sooner the better, the international community will again understand that one must live in accordance with international law, and not with some made-up rules. This is the way we are ready to work.

***

Look, we are talking about a special military operation, and when conducting it we must not turn the cities and towns that we liberate into a semblance of Stalingrad.

This consideration comes naturally in our military planning. This is my first point.

Second, the absolutely senseless attacks on the residential areas of Donetsk stem from the fact that the line of demarcation created eight years ago is a strong fortified area. The local residents, the units manned by residents of Donetsk and Lugansk, are fighting there. They are fighting very well, excellently. However, military experts believe that assaulting these fortified areas is not a good idea even despite the ongoing attacks on the city, because this will result in heavy casualties among the attacking forces.

So, their tactics are different, as you can see. This can be seen on the map and in the media. In fact, methodical work is underway to get behind those fortified areas. This, of course, will take time. The counter-battery activities are underway and will undoubtedly increase, since our advantage in artillery is overwhelming, and this will happen inevitably.

With regard to the red lines, let me keep this to myself, because on our part it will include fairly tough actions targeted at the decision-making centres that you and I mentioned. Still, the country’s military-political leadership should be in the lead on making those decisions. The individuals who deserve actions of that level coming their way from us should realise what they may be facing if they cross these lines.

The attacks on residential areas are, of course, a crime against humanity. This is a humanitarian problem, which I am sure will be overcome.

***

Unlike NATO, the European Union is not a military organisation or a military-political bloc. So we have always said, and I have always said that our position is consistent and clear: we have no objections. It is a sovereign decision of any country whether it wants to join an economic association and it is for the economic association to decide whether it accepts new members.

The EU member states should decide for themselves whether this decision is possible and expedient for the Union. Whether it will benefit Ukraine or not is also a concern only of the Ukrainian people and the country’s leadership.

The structure of the Ukrainian economy requires very large subsidies and support. If Ukraine fails to protect its domestic market it will completely turn into a semi-colony, in my opinion. But at the same time, it will receive significant support for current expenses. It is unlikely that it will revive the lost industries such as aircraft engineering, shipbuilding, electronic manufacturing and other crucial sectors, because the European giants will not want to create competition. Maybe there will be some assembly plants. But again, that is none of our business.

But we have never been against it. We have always been against any military membership because it would threaten our security. As for economic integration, it is their choice.

***

I have written and stated publicly before that over the past decades Ukraine sent down the drain everything that was created in the preceding decades. The main industries and economic sectors ceased to exist. This is very sad.

The main point is not the current military situation and our special military operation in Donbass. The problem lies with the structure of the economy in Ukraine. Its agriculture still survives, but everything else is in a deplorable state, and so its rehabilitation capability is very small, very weak. It will take billions, tens of billions of dollars in investment to normalise life there.

Look, tough sanctions, to put it mildly, have been adopted against us. Our Central Bank had to raise the key rate to 20 percent, but it has recently been lowered to 9.5 percent and continues to go down. Inflation in Russia spiked to 17.8 percent, but it is down to 16.7 percent now and the downward trend continues.

***

Yes, experts are aware of this risk, and we should keep this in mind, because the inflation rate was 0.17 percent over the past months, as far as I know, which means that it tends towards zero and we must consider the possibility of deflation. On the other hand, the ruble has strengthened.

[Margarita Simonyan: Which is not considered good either. They say the dollar should equal 70 rubles.]

70–75 rubles.

This is clear to those who specialise in economics. This is bad for importers. If they sell products worth $1,000 and the dollar is worth between 80 and 70 rubles, they will cash in 75,000 rubles. But if the exchange rate is 56.60 rubles, as it is now, they will receive less in rubles, and they must use rubles at home. This is unprofitable for importers but probably good for exporters. With this dollar/ruble exchange rate, there is a risk of shoddy imports. In short, there are both pros and cons in this situation.

Anyway, Russia’s economic viability turned out to be much higher than our so-called “friends” thought. This is primarily the result of the stable macroeconomic policy we pursued over the past years. We are supporting the main economic sectors. We are aware of problems with supply chains and component parts. We expect other problems to surface and to grow. We are realistic about this.

But such sectors as agriculture have grown by 3.2 percent over the past four months. The rate was 2.3 percent in January, and the figure is 3.2 percent now. The construction sector showed an increment of nearly 8 percent in April, or more precisely 7.9 percent, and the overall increase since the beginning of the year is 5.8 percent, as far as I remember.

<...>

This is the figure for the first four months of the year in construction.

Other sectors reported a decrease, like the automobile industry and metallurgy. Some experts say that they were oversized, which should be taken into account. But they are still active industries, active enterprises.

We also wish economic health to our neighbours, despite all current problems.

Can EU accession provide a new impetus to developing key sectors in Ukraine? I do not know. The people of Ukraine are certainly talented, and they have impressive potential. 

We assume that the situation will return to normal, sooner or later. We are interested in seeing all our neighbours prosper, and we will then inevitably restore our relations. I want to underscore the word “inevitably” here.

Today, we are transiting our gas via Ukrainian territory, and, by the way, Ukraine receives transit payments. Everyone is telling us to expand transit volumes and, consequently, payments to Ukraine. This seems completely illogical and comical. Why? Because they do not want to pay Ukraine. They want us to pay. This has been going on for decades. That is the reason why.

What can we say in this connection? Are there more pros or cons there? I now find it hard to say. Let the people in Ukraine and the European Union decide. However, they do not want to pay, nobody wants to pay.

***

Do you know what the problem is? When did the problem of 2014 and the coup in Ukraine emerge? This happened because former President Viktor Yanukovich said that he needed to think about the principles for Ukraine’s association with the EU. 

Why? If you open and read specific principles and requirements for Ukraine’s association, you will see that they are completely excessive. At that time, they wiped out the foundations of all the main production sectors. They simply opened up Ukraine’s customs borders to relatively cheap and high-quality goods from EU countries, but businesspersons would have been unable to raise their heads and work. This is exactly what happened. Yanukovich did not say that he did not want to join the EU; he said that he needed to think and work on these parameters. “No, immediately, right away.”

We can see the result. I repeat, the entire aircraft manufacturing industry has been lost completely. Who needs the Ukrainian aircraft manufacturing industry? Add to this the engine manufacturing industry. Motor Sich used to make all aircraft engines. Who needs them except Russia? Nobody needs them. Does Boeing need Ukrainian rivals? Do you understand that this is nonsense?

<...>

But for the Carpathian forests, all their mountains will soon be stripped bare. But for wheat and corn, I assure you that no one needs anything else from Ukraine. This is a very subtle aspect.

Given the current conditions, let them do what they want. Hooray, hooray, full speed ahead! This is none of our business. However, there are many problems.

***

I said it publicly and am not holding anything back – what was the Soviet Union? It was the historical Russia. Well, what happened? It ceased to exist. And – I want to emphasise this – we have always respected the processes of emerging sovereignty that took place in post-Soviet countries in recent history.

Look, we have allied, even fraternal, relations with Kazakhstan; we are members of a defence bloc – the CSTO, and members of an economic association. Who in Russia can even think of spoiling relations with Kazakhstan over any issues? That is nonsense, isn’t it? We are interested in strengthening such relations.

We would have treated Ukraine the same way. Look, if we had an allied, neighbourly relationship, or just a partnership, no one would have thought of it. And by the way, there would be no problem with Crimea either, because if Ukraine had respected the rights of the people who live there, the Russian-speaking population, the Russian language and culture, this would never have occurred to anyone, don’t you see?

The current situation is of their own making. This nationalism of theirs – something the party chiefs cherished there in Soviet times, by the way – eventually began to gain momentum with every day once they gained sovereignty. Every day, despite our massive support and the amounts of energy resources supplied at bargain prices – we were as good as subsidising Ukraine’s economy – their nationalism continued to grow. Why were they doing that? What were they hoping to gain? No idea. Just the ambitions of a bunch of people, you know, some Bandera followers. That's it.

If we had normal relations, there would be nothing like this, nothing like this tragedy, I assure you. But we did not do it.

As concerns the future, you know that, first of all, we are ready to build relationships with everybody, despite the current events. And secondly, the army and the navy can be the only guarantors of our security.

***

First of all, as you have just said, we are returning what is ours. Historically, of course. Let us say, the entire Black Sea region. We are not actually laying claims to its entirety. However, it is a fact. Where did Novorossiya come from? This region was acquired through several wars with the Ottoman Empire. What does Ukraine have to do with it? It has nothing to do with it. 

Ukraine gained its western territories as a result of World War II. Stalin took away territories from Hungary, Romania and Poland and gave them to Ukraine, while Poland was granted Germany’s eastern territories. 

We know how left-bank Ukraine came to be. Ukraine essentially joined the Russian Empire with three regions, Kiev (the Kiev Region), Zhitomir and Chernigov. That is it. I think this was in 1545. Everything that Ukraine gained in the process of forming the Soviet Union in 1922 was gifted to it by Vladimir Lenin, in the course of forming the Soviet Union. By the way, initially it was decided that Donbass would become part of the RSFSR. Then Lenin said that the decision should be reviewed – and Donbass was given to Ukraine, in order to increase the percentage of Ukraine’s working population. This is how it came to be. 

So, that is what happened, and let it be. I have already said it many times: we agreed to and respected those decisions. You say it should have been different. Perhaps it could have been different. But when the Soviet Union was ending its existence, apparently, the assumption was that we would maintain friendly relations and the post-Soviet countries would enjoy harmony.

As I have already said, regrettably, all our proposals to cooperate in this very manner and in this capacity met with requests and demands to increase economic support. But we were doing what we could anyway. In the 1990s, Russia itself was in a difficult situation, yet we helped whenever we could over decades, providing loans and cheap energy resources. We were ready to cooperate in the main industrial sectors, such as aviation and shipbuilding, and we offered different forms of cooperation. Frankly, deep down I do not understand what else we could have done.

No, that group of people who actually seized political power or influenced the top political leadership determined the course of development and then declared a choice between civilisations. As I have already said, I believe that they only did it – allow me to speak plainly, if I may – so as to keep the money they had in foreign banks and so that they would be left alone. This is the only reason why they did it.

<...>

Yes, this is clear, because they will be taken to court in the country and accused of all manner of sins as a result of internal political strife.

You have asked about the EU. Let them join it, provided they do not create any threats to us or harm those who regard themselves as part of Russian culture and the Russian language environment. We never meddled before, despite the so-called choice. I have already mentioned this during our discussion today. No, we did not meddle. They did this deliberately to create favourable conditions for protecting the resources they stole from the Ukrainian people. I see no other reason.

Was there any other reason? I remember very well the discussions we had on energy prices, loans and so on. I do not understand what else we were expected to do. I believe that we did everything we could to create favourable conditions for the development of interstate relations.

***

Nonetheless, I will continue talking because this is important. I agree with my colleague.

Look, in the current conditions, every agency and every country as a whole are certainly thinking of ways to avoid expenses. This absolutely natural. You have already mentioned some countries, but this applies to all states without exception.

But it is always possible to find a solution to any problem at the working level, if there is a will. Russia and Kazakhstan have this will. I would like you to understand this. Kazakhstan is our ally in the broadest and most direct sense of the world.

Now about artificial intelligence. It seems to me that, as of today, what you spoke of does reproduce its creator: this is what he thinks.

<...>

It seems to me that he thinks so, which is why his invention thinks so too. I think it is hard to reach the level of Homo Sapiens, I agree with the President of Kazakhstan. Is the ability to empathise, is a soul possible for a machine or not? Some experts believe that at some point empathy may arise. But in my opinion, it is too early to talk about it.

Whether it would pose a threat to humanity or not is a difficult question that I do not know how to answer. I do not think I have the level of competence to answer that question, I am telling you frankly.

But what is absolutely certain and what has just been said is that it cannot be stopped, it has to be taken as a given. Just like you cannot stop the sun rising or setting.

Gunpowder was invented in China and everything was kept secret. And what? You cannot stop it. It is the same in nuclear technology, anywhere. Progress cannot be stopped.

You do not have to try to stop the sun from rising, you just have to think how to deal with it: go tanning today or better abstain, cultivate wheat on this land or better do something else. You just have to start from there. Inevitably we should just adapt to it, not try to slow it down.

If we try to slow it down, nothing good will come of it. And if we understand that it is inevitable, we will find ways to use the achievements of this progress for the benefit of humanity. It seems to me that this is the way to go.

<...>

But it is there, this serotonin. Not yet in the machine, though. There could be something else there, but not that.

***

The US political elite looks down on everyone, often with inflated self-conceit inside; I have talked about this. However, this does not mean the United States is not a great power. This is a country that has become a world leader in a little over 300 years, and that deserves respect. It is, without doubt, a country with a great future, I have no doubt about that. But their domestic problems and the mistakes of the ruling elite, of course, make themselves felt precisely because their internal problems are growing. Their economy is swelling, which we can see in inflation, which I spoke about; they are growing in other areas in the economic sphere.

You mentioned energy. Where did these prices come from? Are we raising prices? Nonsense. There are people here who have worked in energy and oil for almost all their lives. Are we raising the prices? The market is. And who rules the market? They do. And prices are going up as a result of their activities, that is all. And the same goes for gas.

No matter how many times we tell them: “Do not pay attention to the cash market. If you want spot – please, but long-term contracts give us an opportunity to invest confidently, and you can consistently receive energy resources at market prices linked to a basket of oil and oil products.” – “No, we'll use the spot market.“ Certainly, go buy it, it costs 1,500 euros per thousand cubic metres, while we sell it for five times less; in fact, we subsidise the European economy. And it is like this in everything. The same as in the States.

I said that disagreements are escalating, and if policies like this continue, it will get worse. It seems to me that the American people (I have great respect for the American people), faced with problems that are growing due to their leaders’ decisions, can still put their leaders in a position where the political and economic elites – above all the political elite, of course – have to respond to the demands of the people. Ultimately, relations will still be built properly both within these countries, including in the United States, and in the international arena. I am more of an optimist than a pessimist.