President of Russia Vladimir Putin: Good afternoon, colleagues,
We have a very important topic for today’s meeting of the State Council Presidium, and we will discuss it with the heads of Russian regions, senior Government officials, ministers and heads of various agencies. It matters a great deal for our regions, cities and entire sectors of the Russian economy. I am referring to the steps we must take to expand our national export potential.
You all know that Russia has been active in its foreign trade operations. Russian businesses have been facing objective challenges. Nevertheless, we have been expanding our foreign business ties and broadening our geographic reach by strengthening our cooperation with predictable and reliable partners who, just like Russia, pursue their national interests and appreciate mutually beneficial relations in trade, manufacturing and cooperation.
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Let me note the radical changes that global trade and the global economy in general are going through. We have discussed this quite a few times already, and everyone is aware of these developments and understands them. We are witnessing the emergence of a new system of relations with the countries of the so-called Global South increasingly playing a leading role within this framework. These are emerging economies, and they are part of promising integration structures like BRICS.
The share of BRICS countries in global GDP has already exceeded the same indicator for the G7, and counting. This trend is gaining traction and will continue. Just for reference, and I myself was curious to discover these statistics, here is what the G7 represented back in 1992 – its countries accounted for 45.5 percent of global GDP. However, in 2022, its share was down to 30.5 percent. Therefore, its share declined from 45.5 percent to 30 percent and is expected to be 27.9 percent in 2028.
But what about the BRICS countries? BRICS, without taking into consideration its newcomers, accounted for 16.7 percent of global GDP in 1992, but in 2022 this share reached 31.4 percent, and is expected to reach 33.8 percent in 2028. This trend is real and it will not go away. It is an objective process that has nothing to do with any momentary considerations or even conflicts, including the one we all have on our minds. Once we include the new BRICS participants, this changes everything, bringing the 2028 forecast to 38 percent of global GDP.
This means that we are witnessing the emergence of forward-looking markets based on solid, strategic partnerships and the notion of integrating economic capabilities and promoting mutually reinforcing growth.
It is important not only to understand these trends but also to enjoy the advantages and export opportunities that are emerging for our businesses and enterprises. It is necessary to assist them at all levels.
As you know, a six-year national project to support exports will be completed this year. During this period, we have established tools, including those in the Russian Federation constituent entities, that help our companies supply products abroad. These tools allowed them to cope with the pandemic phase and to reroute commodity flows to promising growing markets.
During our meetings with representatives of the business community, it was repeatedly suggested that the national project to support export be extended, and we agreed that this would be done.
Next year, we are launching an upgraded national project called International Cooperation and Exports. The export performances, the economic development priorities facing our country and, of course, the objective global trends I have just mentioned should serve as the foundation for its decisions, solutions, measures and mechanisms.
In this connection, I would like to note that it is necessary to facilitate more efficient financial and information support for export operations in order to ensure the confident, long-term development of foreign economic ties. It is also essential to actively establish the logistics and transport infrastructure, as well as production cooperation platforms.
At the same time, it is highly important that we incentivise Russian companies to enter markets offering value-added goods and to expand non-resource non-energy exports, including deliveries of goods from the machine-building sector, food and so on.
I would like to note that, in 2021–2023, Russia increased its non-resource non-energy exports more than four-fold. Four-fold, not just a few percent, is a commendable result, the growth from US$36 billion to US$148 billion. Of course, this is not the limit for us; in reality, this volume is not that high.
In the first seven months of 2024, non-resource non-energy exports continued to grow, gaining five percent and reaching US$89.8 billion.
Russia already ranks among the leading global exporters in certain sectors, including food deliveries. Of course, this result has been primarily facilitated by specialists and staffs of enterprises, as well as development institutions, regional leaders and federal agencies supporting them.
In my Address to the Federal Assembly, and later in the Executive Order on national development goals, I set a benchmark. By 2030, non-resource non-energy exports must increase by at least two thirds compared to 2023. This is an ambitious objective, especially considering the challenges our companies have been facing lately.
The first challenge concerns carrying out settlements. Of course, we all know everything there is to know about this. Western elites have taken outrageously hostile actions targeting Russian financial institutions and payment systems making it harder for them to receive payments for the exports and to pay for imported goods.
To a certain extent, we have succeeded in overcoming this issue. Last year, the share of transactions involving Russian exports denominated in the so-called toxic Western currencies decreased by a factor of two, while the share of ruble-denominated transactions in our foreign trade operations is approaching 40 percent. Between 2021 and 2023, the share of export-related settlements in rubles almost tripled, reaching 39 percent, while the share of ruble-denominated import transactions increased by another two percent, reaching a total of 30 percent.
We continue moving in this direction and have been working with our colleagues abroad to make wider use of our national currencies and to process transactions by relying on payment clearing systems, platforms, and so on.
It is obvious that we need time to deliver on these objectives, since our leading trade partners are deeply integrated into the existing international financial system.
That said, the whole world is currently working on building the so-called supra-national payment infrastructure. Let me emphasise that there are many countries and regions around the world who have been working hard on these matters to be able to use digital currencies issued by their central banks and digital financial assets. This would offer a permanent and reliable solution operating independently of third countries. Let me stress that others are also moving in this direction, and we are not the only ones doing so in connection with the developments we all know. This is happening around the world and has become mainstream for many regions, including the Middle East and Asia. Everyone is thinking about it and coming up with various solutions.
The second point I wanted to raise concerns the growing transshipment, shipment and insurance costs, as well as other expenses for our exporters. This has a direct bearing on the price of goods made in Russia and therefore affects their competitiveness in the global market.
We must certainly make efforts to remove logistical barriers to Russian exports and to ensure transport connectivity, so to speak, from the first to the last kilometre, particularly with the promising markets in the Global South, Africa and Latin America – in fact, these have always been our primary markets for our products.
To this end, new routes and international transport corridors are being developed, such as the North-South corridor, as well as the Azov-Black Sea and Eastern corridors, and the Northern Sea Route.
At the same time, I would like to emphasise once again that the opening of new transport infrastructure should be aligned with other development projects such as warehouses, cargo handling terminals, and so on, and that the construction deadlines should be in line with plans to increase exports to friendly countries and expand into new, fast-growing markets.
In this connection, this is the third point I wanted to make. We are making active progress within the EAEU and expanding free trade zones with our foreign partners.
At the same time, many countries today maintain a high level of protective tariffs. Despite some progress, our companies still face challenges with finding buyers, organising business negotiations and obtaining marketing information in those countries.
Additionally, not all our partners have mechanisms in place for protecting Russian investors’ rights and capital abroad.
All these important issues are being addressed by the Government, the Russian Export Centre, our trade missions abroad and certainly by Russian regions.
Furthermore, it must be acknowledged that global awareness of finished goods from Russia, including high-tech products, is actually quite limited. At the same time, our manufacturers are ready to supply a much wider range of high-quality, competitive and environmentally friendly products.
It is important to promote these products responsibly and professionally, so that as many potential buyers as possible become aware of them. This should be done both online and offline – on the ground, as they say, and through digital channels and trading platforms.
The Russian Export Centre has a special programme, Made in Russia, which helps foster a positive image of Russia and Russian brands abroad. We need to scale up this practice and expand it to more regions. I ask the Government and the REC to prepare a joint action plan to this end.
I would like to add that Russian goods, primarily manufactured goods and goods with high added value, should not only be recognisable, but also accessible to foreign buyers.
And, finally, fifth. Exporters, above all small and medium-sized companies, often say that they do not have a whole picture of the support measures from the Government and the regions; foreign economic strategies of the regions are rarely synchronised with the federal strategy and federal agenda.
Of course, some of the constituent entities of the Federation consistently and comprehensively develop non-resource exports, including those of small businesses. To this end, they have established regional support centres for exporters and engaged teams of relevant specialists.
Region-to-region cooperation promotes partnership with friendly states and, of course, it strengthens Russia’s technological sovereignty and sets a higher rate for the economic development of the regions and therefore of the entire country.
Of course, we should and will support the constituent entities’ efforts in the export area. At the same time, I would like to emphasise that it is necessary to consistently develop exports, including non-resource exports, throughout Russia, and to link regional and federal initiatives together in this domain.
I certainly ask the Government and the Russian Export Centre to help their colleagues in the constituent entities of the Federation, to formulate and send them the necessary recommendations in a timely manner.
Colleagues,
Support for the exporters, increasing the supply of Russian products to foreign markets is a common task for businesses, federal and regional authorities, our development institutions and representatives abroad.
That said, I want to underscore: the main goal is, strange as it may seem, not just to increase tonnes, cubic meters of supplies or even the amount of export proceeds. The main goal is to make exports and competitiveness of Russian companies on world markets serve as a catalyst for the renewal of our industry, agriculture, services, and many other sectors, promote efficiency of domestic enterprises, and make it possible to create modern, well-paid jobs in our country, in Russia. This is the ultimate goal.
And, of course, the joint work with foreign partners on foreign trade infrastructure, reliable supply channels, and deep technological cooperation help establish stronger ties between states and individuals.
My suggestion is to proceed from these principles in the course of our today’s discussion.
I know – Mr Dyumin has just told me – how the discussions were going on yesterday, fairly actively, this is very good. The proposals from the heads of the constituent entities, which were voiced at the workshop, certainly deserve consideration. We will definitely discuss some of them today.
I also ask our colleagues from the Presidential Executive Office to summarise all these proposals and ideas and, taking into consideration our today’s discussion, send them to the Government for an in-depth analysis.
Let us begin. (Turning to Alexander Tsybulsky.) Mr Tsybulsky, go ahead, please.
Chair of the State Council Commission on International Cooperation and Export, Governor of the Arkhangelsk Region Alexander Tsybulsky: Mr President, colleagues,
The State Council Commission on International Cooperation and Export has been established and is already working; its composition has been approved and the first meeting held. The interest in it is high as there are many problems, but we are starting to consistently address them, and I believe that we will succeed.
Today, the regions are playing a truly key role in the development of export, and for many, exports generate budget revenues and directly impact socioeconomic development. For the regional economy, exports generate four trillion rubles of tax revenues, which is almost 24 percent of the total tax revenues of the regions.
The regions stay in close touch with their exporters, especially now, when they often completely overhaul their business strategies, act promptly, look for new consumers for their products abroad, and reorganise logistics to new markets.
In order to make this work more effective, together we discuss all issues in detail and make appropriate decisions, one can say, tailored specifically to suit the interests of every regional exporter. Later, some of these decisions become systemic. Therefore, the new commission is exactly the platform the regions need to share their best practices, discuss problems, propose possible solutions and agree on interregional cooperation, which is very important. This area is in high demand in terms of export.
Exports play an important role in Russia’s economy: directly or indirectly, they provide for about 31 percent of the country’s budget revenues, over 12 million jobs, and almost a quarter of GDP. Historically, much of the non-resource non-energy exports go to friendly countries, such as India, Iran, Azerbaijan, Kazakhstan, Belarus, and China. Despite complicated global relations, trade with them continues to increase.
Conditions for carrying out foreign trade have changed, with sanctions serving as a catalyst here. Clearly, it was only a matter of time. Mr President, you spoke in detail that the stagnation of European markets in the coming decades would have inevitably led to reorientation of export flows. Hence, the current situation should be perceived rather as an opportunity to become the first on this path and from now on determine the rules of the game in these international markets.
This work is ongoing, among other things, because our exporters have demonstrated the ability to quickly adapt to changing conditions. Since 2022, they have been actively reconfiguring their business models and logistical routes, developing new markets, building partnerships with countries focused on long-term, mutually beneficial and respectful cooperation.
At year-end 2023, the share of industrial exports to friendly countries increased by 15 percent, compared to 2022, and reached almost 80 percent. However, we must admit that the total volume of industrial non-resource non-energy exports has not yet reached the 2021 level. Our task today is to reach it and, starting from this benchmark, progress even faster so as to fulfil your instruction to increase non-resource non-energy exports by two-thirds by 2030 compared to 2023.
Today, we are identifying a number of issues or challenges along this path. As you have said, logistics and payments are probably the most challenging of them.
Let me begin with logistics.
Today, logistics restrictions, when reorienting export flows towards new markets in friendly countries, require building new routes and adjusting the necessary logistics and distribution infrastructure, clearing bottlenecks, and providing end-to-end logistics services to target markets.
Most of our export cargoes originate in the central part of the country (Siberia and the Urals), whereas entry points to international routes are in the south and east. Therefore, in addition to the decisions already made to expand Russian Railways’ Eastern Operating Domain and increase the density of motorways in the eastern part of Russia, it is also necessary to coordinate intraregional infrastructure with projects for promising international transport corridors, primarily the North-South transport corridor and the Northern Sea Route.
As you have already said, Mr President, efforts are needed to ensure transport connectivity from the very first to the last kilometre of the export cargo’s travel, which is vital.
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