President of Russia Dmitry Medvedev: First, I would like to thank my colleague for the kind words regarding Russia. It is always pleasant when people see potential in one’s country.
As for the current state of affairs, the comments by Professor [of Economics at Columbia University and Nobel Prize Laureate] Robert Mundell show how difficult it is right now to forecast what will happen in the future, and when. Nonetheless, in my view, as I have said before, and would like to state again, it is very important that we can agree on key issues regarding the future configuration of our financial and economic relations, and the future international financial architecture.
If we look at the principles that have been discussed at the G20 summits, we can see that in almost every aspect the leaders of such dissimilar countries as the United States, the People’s Republic of China, the Russian Federation, India, and many others, are able to agree on most essential issues.
For example, as we all realise today, we do not need any more regulations in the international financial sector, nor more new rules, which will not be followed by anyone; instead, we need to set a transparent and efficient system of financial regulation, the one capable of operating in the 21st century environment. We understand that we need to move toward creating a clearer rating system and improving control over the activities of major global players and global companies. We will also need to monitor and control, at least to some degree, the macroeconomic indicators of the world’s leading nations. We should strive to strengthen reserve currencies and we all would like to see them stable and strong. In Russia, we expect that the ruble may one day join the reserve currencies club. We have discussed the need to devise new accounting and reporting principles applicable and applied not in a single country or a group of countries, but globally, whether in Europe, in Asia, or in the United States of America. We have debated the implications of protectionism. On all of these issues our positions are rather similar, which makes me optimistic.
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I have already spoken a great deal about the fact that the crisis creates not only problems, but new opportunities as well. Now, the goal for the leaders of every country affected by the crisis is to take advantage of those opportunities.
As far as the current economic situation in Russia is concerned, our major problem is inflation. We have been fighting inflation for several years, but have not had much success, although for a while we saw some positive trend. Unfortunately, inflation grew quite high again last year. This year, inflation pressure persists, although recently, the inflation rate has nevertheless begun to subside. Perhaps by the end of the year, it will be somewhat lower than what we are forecasting now, but curbing inflation clearly remains our key priority critical to the well-being of our economy.
At the same time, to be honest, we are also worried by what is happening to major currencies, including the US dollar. Currently, the United States and Europe are probably more concerned about deflation than inflation, as we heard just now from our colleagues. Still, we cannot help but see other currency trends, and we cannot rule out a scenario of the US dollar suffering a serious inflation pressure. Such a development would have a global impact, therefore currency trends must be carefully monitored, same as the trends in the US mortgage sector, since that is where this crisis originated, and since the mortgage sector is still far from recovery given the most alarming processes unwinding there.
Our colleagues here have named the targets for the future, such as environmental investments, the so-called green economy, energy efficiency, and, most essential for Russia, innovative development pattern. These are our key priorities as well. I think climatic advantages should be made good use of, too.
With reference to the new opportunities, I feel that in this perplexed crisis environment we have a good chance to develop new frameworks for cooperation with the European Union, as well as for economic relations with the United States and our closest neighbours – the CIS countries and member states of various associations pursuing interstate integration. We need joint efforts to overcome these difficult times.
There is another topic, unrelated to economic issues, but of concern to all of us, brought up by [former prime minister of Japan] Mr Junichiro Koizumi. I am now referring to nuclear disarmament. Naturally, there are two countries that bear prime responsibility for the trends in nuclear armament: the United States of America and the Russian Federation. Currently, we are progressing with a new framework for a strategic nuclear arms limitation treaty, and a good impulse has been given to the process. Intensive preparation for the upcoming visit of the President of the United States to Russia is underway, and I hope that we will be able to discuss this issue among others.
Still, while we are fully aware of our global responsibilities and while the efforts by Russia and the United States are important, the prevention of the Nuclear Club enlargement is no less important, since the nuclear weapons proliferation, should it become uncontainable, will pose a threat to entire humanity. So we must pay maximum attention to the processes taking place in potential nuclear weapons aspirants, the countries that are engaged in developing such weapons without having appropriate international mandates. This is an issue of utmost significance nowadays, and international cooperation in this area is no less important than cooperation in confronting the economic crisis.