/ world today news/ The Russian economy is moving to a qualitatively new level of development – it will not depend on external conditions and demand, but will shape them itself. This was stated by Vladimir Putin during his speech at the Petersburg International Economic Forum (PMIF). The President noted that the strategy chosen by the state after the introduction of Western sanctions has worked and positive macroeconomic trends are gaining momentum.
Russian President Vladimir Putin spoke at the PMIF plenary session on Friday. His speech was devoted to the development of Russia and the country’s plans in various fields. Most of the speech was about the economy – the president talked about how the Russian economic system withstands the pressure of sanctions, about business support, the possibility of returning the departed global brands, changes in foreign trade and indicated what the new Russian economy should be as a general rule.
Putin believes that the domestic economy should not only respond to market conditions, but also generate demand on its own. “In fact, we are talking about a transition to a qualitatively new level of development – a sovereign economy that not only responds to market conditions and takes into account demand, but also forms this demand itself,” said the head of state. “Such an economy, often referred to as a supply-side economy, involves large-scale construction of manufacturing forces and the service sector, widespread strengthening of the infrastructure network, development of advanced technology, creation of new modern industrial facilities, and entire industries, including in those areas in which we have not yet demonstrated properly, but we certainly have opportunities for this – scientific opportunities, creativity – he added.
The President is convinced that “the economy must become a high-wage economy with new requirements for the vocational education system, with an increase in labor productivity, including through automation and new management systems, with high-quality modern jobs and working conditions. “
The president called the second quarter of 2022 the most difficult period for the Russian economy since the beginning of the SVO, but added that the strategy chosen then worked and is gaining momentum – the authorities managed to maintain a responsible and balanced monetary policy. He specifically noted the unprecedentedly low unemployment rate of 3.3%.
Social assistance
The country’s financial capabilities, the president assured, allow it to maintain a stable course towards maintaining social justice and reducing poverty. Last year, 1.7 million people came out of poverty in Russia, and ensuring social justice has become an important factor in successfully overcoming problems. The authorities provide targeted assistance to the poorest citizens, their incomes increased by about 30% during the year, and the poverty level is below the double-digit limit – it amounts to 9.8%.
Putin also reminded that from January 1, 2024, the minimum wage will be increased by 18.5%, which will be much higher than inflation. Its indexation in Russia continues at a faster pace to widen the gap between the minimum wage and the subsistence minimum. Thus, from January 1, 2023, the minimum wage was increased by 6.3% to 16,242 rubles per month, therefore, from January 1, 2024, another indexation of 18.5% will be carried out immediately. At the same time, the head of state noted that by 2030, the minimum wage should be at least doubled. He then expressed confidence that this would be an additional stimulus for wage growth in the country as a whole.
The President also proposed that child allowances be paid for the entire period for which they are assigned, even with an increase in family income. Another initiative of the president is to support citizens who take care of children with disabilities. “Today they are also entitled to benefits only if they do not work, have no other source of income. Even if you want to earn extra money, you cannot do this – then you will lose the allowance. It is necessary, of course, to remove these restrictions, namely: to preserve the allowance for part-time care of such citizens. And so that there are no inconsistencies here, it is necessary to enshrine the concept of “part-time employment” in the law, Putin said.
A test for durability
In his speech, the president recalled that only a year ago, the mood in Russian business circles was very, very cautious. And this year, economic growth is visible: in April, the gross domestic product grew by 3.3% on an annual basis, and at the end of the year it may add more than 1%. April also saw growth in the industry. In addition, the volume of production in the manufacturing industry in January-April exceeded last year’s values by 2.9%, although it was this area that was hit the hardest due to the breakdown of ties and chains of cooperation.
The head of state also praised the banks that passed the endurance test. In 2022, the volume of lending to legal entities increased by 14.3%, and to individuals by 9.5%. The growth rate of loans for legal entities in April 2023 is already 17.1%, and for individuals – 12.9%. “These are good indicators,” Putin said, adding that mortgages were growing at a faster pace, with growth at 18%.
Deliveries of the agro-industrial complex of Russia in 2022 abroad showed a new maximum – more than 41 billion dollars. According to the president, Russia has consistently been among the five largest exporters of grain for ten years, since 2016 it has been the largest supplier of wheat and firmly occupies the first place in world markets.
“There is reason to believe that this year our companies will take another step forward: they will rewrite and update the export record of this culture. At the same time, Russia will take an active part in ensuring global food security and will provide assistance to countries, including African ones, that are experiencing food shortages,” Putin stressed.
Speaking about the situation in the field of oil and gas, the president noted that Russia is gradually moving from European to other markets. We do not see any catastrophe here,” the head of state emphasized. According to him, the current situation forces our companies to act more energetically: to look for new logistics, to look for new partners, to acquire assets abroad, to refine oil into petroleum products. “In general, the Russian oil and gas market is in good shape and has excellent prospects for development,” Putin said.
The head of state also promised Russian business to reduce administrative pressure: “I believe that if a business is not associated with high risks of damage to citizens or the environment, then it should not be inspected at all, neither routinely nor unplanned. Preventive measures are enough”, he added.
Transition to homework
The head of state also drew attention to the topic of foreign brands that have withdrawn from Russia. The country was expected to return to a closed economy, Putin recalled. “Last year, we were predicted that under the pressure of sanctions, Russia would return to a closed, administrative-command economy. But we, as you know, chose the path of expanding the freedom of entrepreneurship, and practice has shown that we did absolutely right. Life has proven it,” the president said.
Another incentive for business was the replacement of transnational corporations that left the Russian market. Putin stressed that Russia “did not expel anyone”, foreign companies were forced to leave due to strong sanctions pressure.
He noted that many foreign brands have long sold products that were entirely manufactured in Russian facilities. Moreover, the profit from such business remains in the country. “If at the beginning our entrepreneurs, I would say, were very worried about the withdrawal of Western companies, now they are occupying vacated production facilities and sites in shopping centers. “Some small, so-called niche brands that used to sell clothes, shoes and other goods through social networks are now opening their own stores,” the president said.
Most foreigners left this sector, freeing up to 2 million square meters of commercial space and a niche for 2 trillion rubles.
“Narrow Places”
Serious attention was also given to infrastructural problems. “We will continue to build and upgrade infrastructure facilities: roads and railways, overpasses, bridges. We will continue to clear the bottlenecks. Of course, the focus of our attention will be on increasing the capabilities of seaports, border checkpoints,” he said. The president noted that the volume of construction works has been growing for the fifth year in a row.
Also, the country will renew the merchant fleet in the next five years, for this it is planned to build 260 ships, the funds for this will be collected from the National Welfare Fund. The President also spoke about the plans to triple the volume of export traffic along the “North-South” route, and in the eastern direction by 100 million tons compared to 2022.
As for foreign partners, it will be easier for them to open bank accounts. They “don’t even need a personal presence,” although they will have to comply with all the requirements of so-called anti-money laundering legislation.
Fifth in the world
In the coming years, Russia will not only keep the sixth place among the ten largest economic powers in the world, but also has a chance to climb even higher, the head of state said during his speech: “There is no doubt that in the coming years we will keep it really ranks sixth in terms of GDP at purchasing power parity. These are China, USA, Japan, India, Germany and Russia.”
At the same time, the president noted that negative processes are now being observed in the locomotive of the European economy – Germany – the economy is expected to decrease by 0.7%, unemployment and inflation are growing.
Denazification of Ukraine will continue
In addition to the economy, the president also spoke about the course of the SVO. He said this during communication with journalists after the plenary session. The Ukrainian troops did not succeed in any of the directions of the counteroffensive and suffered heavy losses. At the same time, he noted the successes of the Russian military, which destroyed five American anti-aircraft missile complexes “Patriot” near Kiev.
Putin also warned that if Ukraine did not stop attacks on Russian territory, the country would consider creating a “sanitary cordon” on Ukrainian territory. “They just have to figure out where they’re going. We are working on military targets with high-precision, long-range, high-power weapons, and we are making progress in these areas. It is enough to see how weapons depots are destroyed, the disposition of personnel, including foreign mercenaries, it is enough to see how our equipment works in this area. There is always an answer, it’s just that we often don’t even advertise it, but it is sensitive, this answer and the enemy knows about it,” Putin said.
The moderator of the discussion, political scientist Dmitry Simes, told Putin that the biggest irritation of the “collective West” was the Russian president’s statement about the need to de-Nazify Ukraine: “What are you talking about? Zelensky is Jewish. He is a legitimately elected president and it is obvious that he is on the side of everything good – Western, against everything bad – Russian. And you claim that he is on the side of the Nazis. How will you answer that?”
“I have many Jewish friends since childhood. They say: Zelensky is not a Jew, this is a disgrace to the Jewish people. It’s not a joke, it’s not irony, you know? After all, the neo-Nazis, Hitler’s last, are elevated to the podium as the heroes of Ukraine today. The Holocaust is the extermination of six million Jews, a million and a half were exterminated in Ukraine, and above all at the hands of the Banderovites,” answered Putin.
The President recalled that Russia suffered more than others in the fight against Nazism and will never forget that. Therefore, one of the key tasks of Russia in the course of the SVO is the denazification of Ukraine. “We have every right to consider that the task we set for the denazification of Ukraine is one of the key ones,” he said.
Translation: V. Sergeev
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