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Apec Economic Leaders’ Meeting chairman and VTB Bank CEO Andrei Kostin: I think Mr Putin's speech has touched on many interesting issues that have generated numerous questions. I would ask the audience to actively take advantage of this opportunity and put its questions to the President of Russia.
But while you are gathering your thoughts, I'll avail myself of the moderator’s prerogative and ask my own question, which was inspired by communication with our colleagues.
Mr President, many businesspeople present in this hall have been to Russia many times, but they admit that most of their trips were to Moscow and this is their first visit to Vladivostok. I have heard people say that the city has beautiful scenery and friendly people, but nevertheless, if you compare it with the European part of Russia or other major countries in the Asia-Pacific region, you have to admit that it has less developed infrastructure and industry.
My question is this: what measures, what steps do you as the country’s President believe must be taken to make sure that when Russia hosts such a summit again, which will probably happen in another 10 to 15 years, the businesspeople who will attend it will say “Yes, Russia is an advanced Asia-Pacific country with the most advanced technology and the most developed economy on the Pacific coast”. What is your vision of this process for the next 10 years, say?
President of Russia Vladimir Putin: You know, it is no accident, and one of my colleagues mentioned it earlier, that more than 50% of Russia’s trade is with Europe, then a certain percentage falls for North America, the United States, whereas the share of the Asia-Pacific region is much smaller, although it is developing rapidly and dynamically.
This is due to many reasons, first and foremost because although both in the tsarist and Soviet times Russia paid attention to the development of its Far East, but its efforts were not as vigorous as they should have been. As for Vladivostok, it was closed to visitors altogether because of its naval base. In fact, the city saw very little development.
The policy of new Russia, modern Russia is and will continue to be very different from that. First, we will accelerate the development of infrastructure. This may be nothing new to Russians but our foreign visitors might be interested to know that Russia did not develop its territory until the 20th century, and it was possible to travel to the Far East by land only in winter, when the roads were passable, while in the summer the only way to get here was by sea, across the Indian Ocean.
Roads simply did not exist. The first railway was built in 1904, the Trans-Siberian Railway. The second road appeared in the 1980s: the Baikal-Amur Mainline. There were no roads at all, not a single motor road connecting the European and Asian parts of Russia.
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So the first thing that must be done is to develop the transport infrastructure: roads, railways and air routs.
Next – and this is not in the order of importance – we must think about the development of intellectual activities. Here, in the Amur Region, we will build the second space centre, Vostochny, designed for civilian use. The design work on this major project is already underway. We are going to carry out commercial launches that are in the interests of the Russian Federation and our partners. Today, as you know, Russia carries out the biggest number of launches in the world. This is the second point.
Naturally, we will also develop intellectual centres here. This session is taking place in one of them. It is no accident that Vladivostok was chosen to host the APEC summit. We could have chosen any city in the Russian Federation: Moscow, St Petersburg, somewhere in the Urals, for example, Yekaterinburg. But we decided to hold it here specifically in order to boost the region’s development.
There are many sectors that have traditionally prospered here. Komsomolsk-on-Amur here in the Far East is home to one of our biggest aviation companies which produces the famous Sukhoi combat aircraft. Without exaggeration, these planes are the best in the world.
There are other traditional areas of activity, such as fishing. In this field we have extensive cooperation with our partners in the Asia-Pacific region: Japan, Korea and the United States.
Another major sector is energy. We are expanding it and will continue to develop it rapidly. I want to draw your attention to the fact that Russia’s energy networks, the European and eastern parts, have never been linked, just as the road networks. Their unification is among our short-term plans. As we develop energy infrastructure in the Far East, we will connect it to infrastructure in European Russia so as to facilitate the transportation of raw materials and energy from one part of the country to another and smooth the entry both to the European markets and the markets of the Asia Pacific region.
Taken together, this is a huge reservoir of work, a huge field of activity that can involve anyone who is interested in developing this region. In fact, this work has already begun, and one example is our projects in Sakhalin. I very much hope that events such as the APEC summit will promote investment and business cooperation, including in the development of the Russian Far East.
Andrei Kostin: Thank you. I am sure many will respond to this invitation.
Question: You have emphasized that both economic growth and the region’s development are very important. This requires huge amounts of capital as well as a strong financial system. What steps do you envision to support such measures? Thank you.
Vladimir Putin: As Mr Kostin already mentioned, today various issues of development of the global financial system and regional currencies were discussed. Our moderator today mentioned new potential regional reserve currencies, and they really are developing; we often hear about the Canadian dollar, the Australian dollar, and the yuan, which is getting stronger. Indeed, the ruble can also become a reserve currency since it is increasingly used in transactions in post-Soviet countries. Between business partners the volume of transactions in rubles amounts to around 60 or 70 percent in some countries of the former Soviet Union, hence this is a natural process.
But we all realise that governments’ attempts to employ administrative mechanisms are absolutely insufficient. In order to strengthen a financial system and national currency, and ensure its stability, it is first and foremost necessary to conduct balanced macroeconomic policies, to ensure the economy’s stable, sustainable and rapid development, and to facilitate certain rates of economic growth. We understand this, and therefore have put macroeconomic stability at the centre of our economic policy.
I want to draw your attention to the fact that in general over the past few years we have been able to address this problem and to cope with it. Just seven years ago inflation in Russia was 13 to 14 percent while last year it was 6.1 percent, which is still quite high compared to developed economies, but nevertheless a record low for the past 20 years. We intend to continue suppressing inflation and further reducing it. We are yet to see how well the government will succeed this year, but we must stay close to these figures.
The Russian Federation has the lowest level of external debt of all developed economies. As a whole the Russian government’s debt can be estimated at somewhere around 10 percent [of the GDP], with external debt being only about 2.5 percent. Of course a slight increase in foreign liabilities is possible, but in general we will remain at a low [debt] level.
With regards to the very important indicator, unemployment (which I have already mentioned and which is rather a social matter, but nevertheless it is also an economic one), it also impacts on macroeconomics. We will continue to fight it. In Russia unemployment is currently at its lowest level in a decade, 5.1 percent.
We will maintain all of the above as well as a sensible balance between income and expenditure in the budget, and I hope very much that this will produce a positive outcome allowing us to state that Russia's financial system is stable.
We will further strengthen our banking system. As you know, during the crisis the first thing we did was support our financial sector. I know that this is often criticized both at home and abroad, but it was nevertheless a step in the right direction. We all know perfectly well that the financial system, put simply, is the lifeblood of the economy. If it can’t function normally the economy simply collapses. So we intend to further strengthen our financial system and consolidate our banks. We are not going to do so radically, coming up with superfluous requirements or stimulating forced mergers, but we will aim to consolidate our financial institutions. Of course we will not abandon the fundamental principles of the free flows of capital. Even during the very severe financial crisis from the end of 2008 to early 2010, we did not restrict capital outflows. True, we did lose some capitals then, but now they are returning and I believe that this policy regarding the free flow and exports of capital helps to attract back to Russia its needed amount.
Finally, when judged by international reserves Russia is one of the leading countries in the world: we have $514 to $520 billion of foreign exchange reserves, and two government reserve funds – the National Welfare Fund with $80 billion, and the Government Reserve Fund with $60 billion. So the total amount of reserves that our country might draw on is very significant and sufficient to respond to potential disasters in the global financial market.
Andrei Kostin: Thank you, Mr President, for your kind words about the Russian banking sector. By the way, VTB Bank will exchange any currency for rubles and the other way around, so please get in touch if required.
Vladimir Putin: Of course we must extend the use of regional currencies. We have already signed an agreement between Russian banks and their Chinese counterparts, and we already trade in rubles and yuans. We are also negotiating similar arrangements with other partners. Naturally, the use of regional currencies will strengthen the international financial system.
Question: I represent the Chinese delegation.
First of all I would like to congratulate President Putin on his recent re-election.
We were very impressed by your excellent speech. Chinese businesspeople are interested in economic development and stability, and, thinking about the future growth trends and the challenges of globalisation, Chinese companies are ready and willing to invest in Russia.
We know that Russia has excellent universities, especially the Far Eastern Federal University, which are active working in the new high-tech industries, in particular in the energy sector.
The Chinese delegation has come to Russia in order to find out what new opportunities for investment in your country are open to them. Naturally, we are also interested to learn about your country’s policies on environmental protection, the development of new energy sources, and, of course, the investment climate in Russia. Thank you.
Vladimir Putin: I will start with investments. You already know a great deal. Russia and China have a large trade turnover, and last year we achieved a record figure of $83.5 billion. I think that in the near future our trade with China will approach $100 billion a year.
For comparison, I can say that our second trade partner is the Federal Republic of Germany, and our trade stands at a little over $50 billion, and with the United States, which is also an Asia Pacific country, our trade stands just at $34 billion. We realise that this is not enough.
As for China, I have no doubt that we will reach the $100 billion target in the near future. Last year we had 42% growth in trade with China, and in the first six months of 2012 (January-June) the increase has been almost 14%.
Investment is a very important area of our cooperation. We have created a Russian Direct Investment Fund, and the leading Chinese investment company is directly involved in the fund’s activities.
I know that the amount of resources offered by the Chinese investment company is very substantial. We are currently looking for ways and the areas where this funding can be used together with our partners.
There are also traditional sectors, such as energy. I had a meeting today with President of China Hu Jintao, our great friend and my personal friend, and discussed in great detail (we must give credit to the Chinese leadership, they analyse the negotiations process in minute detail) what has been achieved already and what else could be done.
It is certainly very important for us to expand cooperation in high technology, energy and nuclear power. We have already built several nuclear power plants in China and we believe that our experts will have the opportunity to continue this work; in fact, such agreements already exist.
At the same time, we are aware of our Chinese partners’ interest in the development of cooperation in hydrocarbons. This includes the supply of oil and gas, and liquefied natural gas – everything is possible. An active negotiating process is underway, and work has already begun; at present it involves oil deliveries but gas supplies are also on the agenda. We are holding active talks on these issues. I hope the work on the Tianjin refinery and petrochemical complex will resume in the near future.
We are also aware of our partners’ interest in joint projects in such areas as aviation and space. We have ambitious plans for the joint development of heavy helicopters and wide-body aircraft. Projects in such fields cannot be implemented effectively today without the support and participation of the state, but I want to draw your attention to the fact that private capital, including Chinese capital stock, can also play a role, considering that the creation of new aircraft systems, such as heavy helicopters, can be widely used in business.
We can work together in other areas as well, and there are many diverse areas, including light industry. We would very much like to see such factories set up not only in China, but also in Russia. We know the share of Chinese products on the Russia market.
We are ready to tackle joint projects in agriculture. There are excellent opportunities here as well. This is true not only of the border regions, but of global cooperation in such fields as the manufacture of motor vehicles and rail cars. Many of these Chinese-manufactured products are supplied to the Russian market.
We should discuss these issues together and work out a common approach to standards and quality. A great deal of work lies ahead. I am confident that we will succeed if administrative and political support is provided on both sides.
Maksim Ananyev: Maksim Ananyev, from Vladivostok.
First of all Mr President, as a car owner I want to thank you for the bridges you built. We, the residents, were eagerly awaiting them.
My question is as follows: how will federal allocations to Primorye Territory change after the summit is over, may it drop dramatically? Thank you.
Vladimir Putin: The residents of Vladivostok have been waiting for these bridges since 1903. The first postcards depicting a future bridge over Golden Horn Bay were, I think, issued at that time. They show a bridge that people were just dreaming about in 1903, and now we have built it. In Russia implementing projects takes a long time. But when we do something, we do it thoroughly. Measured by its central span, the bridge across the Eastern Bosphorus Strait is the largest in the world. We used the latest technology, including space technology and a large number of sensors. The condition of the bridge is being continuously monitored, every second and in real time, by satellite systems. I hope that everything works as the bridge’s designers and builders have planned.
As regards attention devoted to the Far East, to Primorye Territory, I have already addressed this in my answers to previous questions. I think that — or rather I do not think, I am sure, I know that one of the Russian Federation’s priorities in the near future is the development of its eastern territories. Both because this is very important to us, and because a significant amount of economic activity is already shifting to the region. If we are rational – which we would like to be – we must develop the infrastructure here. The most important thing is to be able to transport people and goods efficiently. That's the main thing.
Over the past few years we have significantly – and I would like to stress this point – greatly increased the possibilities of rail transport in an easterly direction, but our railway is unable to cope with the growing volume of traffic. At present the Trans-Siberian Railway is transporting more cargo than in record Soviet years, when goods were transported all over the Soviet Union, its current infrastructure is insufficient. So for that reason we had to improve it and we will continue to do so.
Then, as you know, the energy potential of the region is simply enormous. I have already pointed out that the energy systems of the European and Far Eastern parts of Russia have never been integrated. So unfortunately it's just a fact: energy here is more expensive than in European Russia, and prices are higher. This inhibits economic development. Not only do people have a hard life, it also encourages depopulation, because it is better to live where things are cheaper and infrastructure is more developed. But one of our most urgent tasks is developing existing energy resources and integrating them with the infrastructure in European Russia. For those reasons we will increase production of natural gas, oil and other mineral resources.
You know, I came here from Northern Russia, a part of the country which is actually eastern too: Eastern Siberia. There on just one peninsula, Yamal Peninsula, proven reserves of natural gas total 55 trillion cubic metres. Judged on a planetary scale these are simply enormous, and the area itself is one that you can walk through. These are huge reserves! And I'm not even talking about other deposits near Irkutsk. There are simply huge reserves here! For example on Sakhalin, seeing as gas from the island has just reached us, reached you (I say us meaning all of us who live in Vladivostok, and we are now living in Vladivostok). This is only the first step. And I very much hope that people feel this, and that we will stabilize population flows. More than that, we want to attract people here. In some places where work is proceeding actively, we are already witnessing labour inflows. We have huge energy potential with regards to the development of hydropower resources. Of course, we have to address the issues of environmental protection, particularly in the case of hydropower, extremely seriously. And we will do so.
As for our current facilities, of course you understand that we built this centre in three years. We did so deliberately: we didn’t just build some buildings, facilities, or five-star hotels to accommodate my colleagues, heads of state and government in luxurious conditions. All my colleagues know what those conditions are. But a chic environment does not matter to them, rather the business climate is what is important. I simply know this as I have been personally acquainted with them for many years now.
We did something different. We have invested significant funds, really hundreds of billions to develop Russky Island, develop infrastructure, and create a new scientific and educational centre in Russia’s Far East. And this will all be transferred to the university for future generations. I think that this is a very good decision. Of course, we can’t invest such resources to create additional centres and it would be impractical too. But for example, we are going to build the Vostochny Cosmodrome in Amur Region, develop transportation, build a system of airfields, develop aviation, and so on and so forth. We will develop the fishing industry; there are many problems there, and I will not talk about them now, but we will do this. Naturally, we will work at this aggressively.
Andrei Kostin: Mr Sechin would like to ask a question.
Vladimir Putin: Long time no see, Mr Sechin. Go ahead, please.
Andrei Kostin: If I may just say, as the moderator, that today is Mr Sechin’s birthday. I would like to congratulate him and wish him every success, health and happiness, and all the best.
Rosneft President Igor Sechin: Thank you.
Mr President, colleagues,
In April 2012, the Russian Government issued Executive Order No. 443, and you signed it on April 12, on economic support measures for major investment projects in hydrocarbons extraction on the shelf in difficult conditions.
Mr President, can we expect that the leaders of Asia-Pacific countries will consider the reduction of import duties or other charges on goods and raw materials that are produced in the course of these projects and supplied to these countries? Such a decision, in our view, could help reduce the risk for private investors, would create additional opportunities for promoting these products if the profits are reinvested in new projects. Because, on the one hand, Russia undertakes to subsidise the supply of these products to the Asia-Pacific markets, and the reduction of import duties could provide additional support for these projects.
Thank you.
Vladimir Putin: I think this question should be addressed to the leaders of our partner countries. I cannot answer for them whether they will cut the import duties or not. But in general, I believe that we will move forward in a common market and free trade zone development, which was initially seen as a top priority at APEC’s inception.
I have no doubt that the environment for trade will improve. You already know that at the bilateral meeting today the leader of China, Hu Jintao, informed us that our joint venture in Tianjin will be granted the right to purchase petroleum products, to export them and sell them on China’s domestic market. This is the first time China has made such a decision with regard to a company with foreign participation, in this case, with the participation of Russian capital. This is a clear step forward in the liberalisation of trade and improving the conditions of bilateral trade.
I very much hope that our other partner countries will also make similar decisions, including those related to tariff and non-tariff regulation.
Question: I represent the business community of Beijing, China.
First, I want to congratulate Russia on its accession to the WTO. Second, I would like to ask you the following question: China wants to invest in Russia, and relations between China and Russia are developing rapidly. It is widely known that Mr President has done a great deal to promote investment.
As to the legal framework, how can we ensure the security of Chinese investments in Russia? And how can measures to strengthen foreign investment, particularly investment in Russia, be improved? Thank you.
Vladimir Putin: I think that this is a key global challenge. Investment protection is the main condition for creating a good investment climate. I would like to inform you that here in Russia we have been consistently working to improve the investment climate.
What is more, I personally believe that this is Russia’s top priority, and the Government of the Russian Federation has been working in this direction. In our economic policy, attracting investments is one of our challenges, and above all it means attracting private resources and equity capital. Many Chinese companies have such resources, as we all know. Therefore, I want to reiterate, this is one of our main objectives.
We have developed a programme, a roadmap to improving the investment climate in Russia. I want to emphasise that this work was conducted in cooperation with the Russian business community and is largely based on its recommendations.
I will not go into detail here but we have set the ambitious goal to become one of the world’s top 20 economies with the most attractive business environment. We have outlined a set of measures and instruments which we plan to use to reach this objective. They include reducing administrative barriers, improving the quality of service at the border and reducing import duties on many products, bearing in mind Russia’s accession to the World Trade Organisation.
Incidentally, our Chinese partners and friends have always supported us along the way, for which we are very grateful. So I very much hope that these measures will work and our partners will feel the benefits for themselves.
Question: Mr Putin, I also represent the Chinese business community. I would like to change the subject a little. I know that you have a black belt in judo. That is why I'm hoping that, if you visit our country at some point, we can introduce you to our martial arts experts in China, because those who practice martial arts in our country think very highly of you.
Vladimir Putin: Thank you very much. I'm not surprised that it's mostly our Chinese friends asking questions. There are one and a half billion people in China, so if we consider them as a percentage of the total population, the frequency of their intercessions seems entirely justified.
As for martial arts, I must say that I really do love judo and have devoted myself to it almost my whole life. I think that our Japanese friends including my personal friends would acknowledge that Chinese martial arts are the progenitors of all martial arts. In this connection, the interest in our country and in other parts of the world in this aspect of Chinese culture is very significant. I can't emphasize this enough – very significant. You must have seen that when I was in China during one of my visits, I met with some monks from one of the monasteries where these kinds of martial arts are traditionally practiced. I still feel great respect for them and believe that there is much that I can learn from them. Thank you very much for the invitation.
Andrei Kostin: I think that lady in red is not from China and would like to ask a question. Can someone get her a microphone, please?
Vladimir Putin: We don’t know — perhaps she is from China too.
Question: No, I’m not from China. I’m a reporter for Bloomberg Business Week. But I would like to continue with a question about China, because I’m a moderator at a session tomorrow. I am keen to know what you think about Russia’s successes in healthcare, what are your priorities and the challenges that we face in terms of investment? Thank you.
Vladimir Putin: This is one of the most important topics. I believe that it is important for any forum, including ours.
I think that the framework of this discussion militates against going into great detail concerning our position, but many experts obviously agree that the many problems faced by the global economy have been precipitated not by the obvious causes, and not even by the growth of derivatives in the financial sector and the lack of regulation for financial transactions, although these are important. But the real causes of the crisis are more profound.
There are many experts in the field of economics here today. A lot of you will know our economist Nikolai Kondratyev, who in the 1930s formulated an idea that involved the concept of long periods of crisis, and eventually came to the conclusion that global shocks occur at the intersection of important technological changes. And many experts, including ours, believe that we are now faced with this global phenomenon, produced by technological changes and increasing demand, especially in the so-called developed economies, where the so-called ”golden billion“ live, where people are accustomed to the accelerated consumption growth. Existing technologies cannot maintain this growth in consumption and already cannot ensure it. In experts’ view, this is one of the reasons for the current global economic turmoil.
But the next technological structural change, towards which humanity is moving very slowly, involves biotechnology. Biotechnology is inextricably bound up with medicine, with human resources and human health. So the subject that you just mentioned involves not only the fact that we have to fight, say, the flu or some other disease that is on everyone's lips, such as cancer or cardiovascular disease. It is much more serious and fundamental. We must move to a new technological level, in which biotechnology, medicine, the quality of human life, the quality of education and health are critical for maintaining economic growth rate. If we look at the problem from this angle, and in my view this is the one way that we must look at it, we can understand how important it is.
In Russia we have faced a number of challenges. They are due to the fact that we are moving gradually from a planned economy to a market economy. That is also a rather painful process.
Everyone – at least a great many in our country – criticises our so-called ”young reformers“ of the early 1990s, one of whose prominent representatives is Mr Chubais, sitting here to my right. Quite possibly, there are reasons for such criticism. That said, they made the decision to change to a market economy. With all the successes and failures, they ultimately accomplished the transition.
The same thing is happening in other sectors in Russia. In healthcare, we abandoned administrative mechanisms of the industry management, but the new ones, just like in the economy, have had a difficult birth and can seem very feeble, incapable of performing effectively, and people get irritated. For this reason the most important thing for us now, one of the main areas, is achieving a new level of medical services for our people. We have instituted a number of programmes and now one of them, called The Modernisation of Healthcare, is in full gear. It pertains primarily to general healthcare at the regional level.
I don't want to bore you and there is a lot to say about this subject, but our goal is to improve the physical and technical basis of healthcare, increasing the level of competence and improving the financial situation of the industry employees at every level. We must certainly pay special attention to fundamental biological and medical research. All of this is on our radar. We have set up the appropriate programme for it and are also working on a programme to develop our domestic pharmaceutical industry. Of course, we are not going to confine this pharmaceutical programme to our national borders – that would be simply impossible. But we must develop our own production base. For this reason we have already allocated over the next couple of years, if I remember correctly, somewhere in the region of 186 billion rubles [$6 billion] for the development of the pharmaceutical industry. We are going to pursue this development with the help of our foreign partners. I would really like to see our partners in the Asia-Pacific region involved in this endeavour.
Thank you for your question.
Andrei Kostin: Colleagues, this meeting has run for over an hour. We will have three more questions but let us keep it brief, and after that we will summarise our discussion.
Question: I’m from the China Investment Committee. This year China and Russia have worked closely together, but I would like to ask if President Putin is interested in creating a monetary union in the Asia-Pacific region in the face of the weakening of the US dollar? In the aftermath of the financial crisis, have you thought about creating a financial and monetary union in the APR?
Vladimir Putin: This is an important and pragmatic issue. We have made the first step in this direction. I have already said that I believe the development of regional reserve currencies is movement in the right direction. I think this would be a stimulus for the dollar and would stabilise the global economy. In fact, many countries now, especially those that are in close geographic proximity, use their national currencies to make mutual payments.
I have already referred to our agreement with China on a certain volume of payments to be made in yuan and rubles. Our trade is already conducted in yuan-ruble pairs. These are only the first steps. They are not easy, from a professional point of view, from the point of view of our central banks, but this is the direction we should take. I generally do not exclude such a possibility, and I think it would be very interesting.
True, organising this process is complex financially, economically, politically, and even psychologically. We know how the euro was established evolving from ECU, how hard it was for Germans to give up marks and for the French to give up francs, while the British continue to hang on to their national currency. It is an emotional issue, apart from everything else. But the first steps towards such an association and further cooperation in this area should be made. I agree with you, it's absolutely the right direction. And I think it would be right if we mention our ideas tomorrow at the APEC Leaders’ Meeting.
Sergei Fokin: I have seven children and they ask me a question.
Vladimir Putin: Congratulations.
Sergei Fokin: Thank you. I also have two grandchildren.
They ask me where people will live in peace in the future. What parting words would you say as a common challenge to APEC economies? You have already identified the most interesting areas such as finance, transport and food security, but what theme or programme will bring all of these countries together? And when will Russia host another APEC summit? What parting words would you say to APEC members?
Vladimir Putin: I didn’t quite understand the connection between your children and grandchildren, the best place to live, and when the next APEC summit will be held. Could you clarify your question, please?
Sergei Fokin: They are worried about the future because they will live in the 22nd century, and we should start thinking about that.
Vladimir Putin: You know, to answer the part of your question about the best place to live, I think in the modern world each person chooses his or her place of residence based on such considerations as quality of life, stability, where life is more interesting. But the vast majority of people in the world live in their own countries, and while it is normal in the modern world to move abroad, not everyone is able to do it.
Response: Any parting words?
Vladimir Putin: Parting words? I’m not a priest, you know to give valedictions.
Andrei Kostin: For everyone to have seven children.
Vladimir Putin: The distinguished banker is saying that the most important parting words should not be addressed to children but to the adults who are present in this hall: to follow your example and have seven children. That is the best advice.
What could we say to our children? You should love your country, contribute to its development, get a good education, think about your fellow creatures and enjoy life. That’s what you should do.
Andrei Kostin: Thank you.
Last question please.
Question: Good morning, Mr President, I am from China.
We all know that food security is a priority objective of this APEC summit. However, there were droughts in Russia and the US. You said that about a billion people in the world are starving. Russia is a country with huge agricultural potential. What measures will you take to combat this problem? Thank you.
Vladimir Putin: I have already talked about this. You know that more land was cultivated in the Soviet Union than in Russia today. Still, the Soviet Union was unquestionably a net importer of food. Even our ports were constructed in such a way that technologically they could only receive grain and not discharge it. But in today's Russia we have begun to export grain for the first time, and have become the third or even second largest exporter in the world. This bears witness to the fact that we have made progress, a significant one, in agriculture.
I must say that in some sectors of agriculture, such as the poultry industry, we have made extraordinary strides. I do not think I could name a country that has demonstrated similar exceptional – let me use this word — achievements. These are not my achievements, they are those of our farmers whom I want to congratulate and thank for their great job. In recent years we have increased our production of poultry meat threefold – not by three percent, threefold. Three times over. While five years ago we imported 1,400,000 tonnes of poultry meat, last year we actually did not import any at all.
We are currently ramping up our production of pork and livestock, but for it to really increase we need more feed. No doubt, we have not done all we should do in developing national agriculture. We certainly look forward to cooperating with our partners in this regard. I want to specifically point out that Russia is one of the wealthiest countries in terms of the availability of lands for agriculture.
I would draw your attention to the fact that Russian legislation does not in any way restrict investments of foreign capital into any area of the agriculture, including crop farming. Therefore I believe our partners will demonstrate the relevant interest in this respect and will perform in agricultural production in Russia as successfully as their Russian counterparts are currently doing.
But one of the most important aspects of this issue is, of course, the development of the social sector in Russian rural areas, improving medical care, education, and so on. Why do I mention this? Because these are all elements related to increasing labour productivity. We are going to improve these elements while certainly no easing our attention to introducing modern methods of agricultural production and science.
Andrei Kostin: The final question. Please go ahead.
Question: Mr President, you mentioned that Russia is currently negotiating a free trade agreement with New Zealand, and I am from New Zealand. We are a small country. Just a few minutes ago, you spoke of the technological developments you want to introduce into agriculture. In this context, my question is: how are negotiations with New Zealand proceeding? And with which other countries would you hope to sign a bilateral agreement in this field? Thank you.
Vladimir Putin: New Zealand is a traditional partner of Russia. I can not name exact volume of products supplied by New Zealand to our domestic market, but it is significant. First and foremost, of course, these are agricultural products. I hope that our cooperation in this field will expand.
Negotiations are underway in order to strengthen the legal framework governing our relations. What do I want to draw your attention to? To the fact that this process is not simple, because we are not negotiating on Russia’s behalf only. Instead, negotiations are being carried out by our Customs Union Commission and thus take into account the interests of three countries: Russia, Kazakhstan and Belarus. But I want to assure you that the Russian Federation and our partners in the Customs Union intend to bring this work to completion. I very much hope that this will be the case.
I want to say once again that New Zealand is a traditional partner of Russia’s, and we must resolve all problems that hinder the development of free trade. This is precisely what we intend to do together.
Which other countries might be included in this process? All countries in the Asia-Pacific region. I would repeat once again that this is a complex process that requires the ability to reach a compromise, but compromises can and must be found.
Andrei Kostin: Mr President, on behalf of all business summit participants I want to thank you for a very interesting speech, and for your comprehensive and patient answers to many questions. I think there are people here who want to work on and are already working on developing cooperation in the Asia-Pacific region, including with Russia.
We all would like to wish you success in your work as President of the Russian Federation, new successes and all the very, very best.
Thank you very much.
Vladimir Putin: Thank you everyone and all the best.