President of Russia Vladimir Putin: Good afternoon, friends, ladies and gentlemen,
I am delighted to welcome all the guests and participants of the Russia Calling! Forum to Moscow.
As usual, the forum has brought together the best and most high-ranking Russian and foreign businesspeople, investors and experts so that they can talk openly and professionally about the current issues on the business agenda and the main trends in the Russian economy, mostly in the Russian economy, which cannot be considered separately from the ongoing processes in the global economy.
In my opening remarks, I would like to say a few words about our views on the current situation and to outline the country’s main economic development goals in this context.
Despite a decline in the global growth rates, the economic situation remains positive in Russia. GDP increased by 2.3 percent last year. The figures for the first nine months of this year are rather modest, as we all know, only 1.1 percent. However, the Economic Development Ministry reported that growth accelerated in the second half of the year.
As for the labour market, the unemployment is decreasing. They made up 4.6 percent of the economically active population in January to September. This is the lowest, I repeat, lowest figure in Russia’s modern history.
I would like to draw your attention to the inflation rates. The consumer inflation is currently 3.6 percent, and we expect to see 3 percent, and possibly even a lower figure, at the beginning of next year.
At the same time, inflation is decreasing faster than we expected, and that poses certain risks for economic revival, and for the aggregate demand dynamics. So we need – and we will – keep this issue under control, and we will certainly be operating in constant contact with the Government and the Central Bank on this matter, respecting their rights stipulated by law and their independence stipulated by law.
In general, the stabilisation of prices is a great achievement for Russia, and the result of the Government and the Central Bank’s consistent and systematic work, and it certainly opens up new opportunities for advancing the pace and, most importantly, the quality of economic growth.
What key structural factors am I talking about? We often talk a lot, but, unfortunately, we are moving forward too slowly so far – this must be said openly – and this is a serious challenge that we must stand up to.
First of all, the Russian Government and our business community need to achieve cardinal shifts in labour productivity based on modern, advanced technologies, higher growth of qualifications and new competencies.
I must note that Russia is actively introducing WorldSkills standards in the vocational education system, and on November 1 it was decided to create a unified Government Centre that would coordinate and support WorldSkills in Russia and, in general, the development of new professions.
Next. Along with the defence and mining industries, Russia needs its other sectors to grow more competitive, primarily civilian sectors of course, such as manufacturing, agriculture, and the services sector.
An increase in non-resource exports should be a tangible result of progress here. Allow me to remind you that the Government has set specific guidelines for this. We set the task of launching a new investment cycle in the Russian economy, and reach annual fixed investment at 25 percent of GDP, and in the future, 27 percent. The target is quite achievable, if we keep in mind that this year, according to preliminary estimates, it was 21.6 percent.
I would like to recall that, according to the Government’s forecast, a 5 percent investment increment is to be posted in 2020, and it is to reach 6.5 percent in 2021. There is every reason to expect this. Judging by the stock market’s dynamics, our colleagues, our partners and investors are highly interested in Russian assets, national companies and their capabilities.
This year, the main index of the Moscow Exchange hit an all-time high. The capitalisation of the national stock market exceeded 48 trillion rubles or 45 percent of the national GDP. This is more than in industrial markets and major economies. So far, I have no statistics on Japan, but this is markedly higher, compared to the United States, China, Germany, Great Britain or, say, India.
But it is important that interest in financial assets should be converted into investment in real assets, the creation of new production facilities and jobs and efforts to carve out promising market niches.
The issue of DOM.RF mortgage bonds, backed by direct investment in the housing industry’s development and the construction of new buildings, became an important step in this direction.
However, I believe that the real income of the population is, certainly, a key indicator of economic development. It is common knowledge that nominal and real wages continue to increase nationwide, but disposable income remains almost static. It goes without saying that we need to change this situation. This is a highly important aspect of the Government’s work, and very modest results have been achieved here, so far.
At the same time, I would like to note once again that dynamic economic development in general, greater investment in corporate development, and financing the creation of high-quality jobs and infrastructure are, of course, a guarantee of a steady long-term increase in people’s well-being.
All tasks have been set before the Government in this connection. I very much hope that they will be accomplished successfully in close coordination with the Bank of Russia and the business community.
This is what I wanted to say at the beginning.
Thank you very much.
President and Chairman of the VTB Bank Management Board Andrei Kostin: Mr President,
First of all, thank you for coming to our forum once again. Your presence here is always the high point of this event. It certainly attracts a lot of people.
I would like to inform you that this year we have 2,500 participants at the forum, including 600 people from across the five continents. No, not exactly, since we do not have anyone from the Antarctic, but we will definitely get there one day. Otherwise, the American continent, Asia and Europe are all represented here.
You know that we have a traditional format here. In the morning, we heard presentations by the heads of Russia’s economic agencies and a number of prominent businesspeople. We discussed economic growth. The discussion on budget spending was rather interesting.
You are also aware that at this panel session we have a tradition of bringing in international businesspeople. Let me present them to you. Mme Emma Marcegaglia is Chair of the Board at ENI. This company hardly needs any introduction. It works closely with Russia and you are well aware of this.
Mr Ken Moelis is Chairman, CEO and owner of Moelis & Company, essentially a US bank specialising in portfolio investment around the world. Among other things, he is incredibly experienced when it comes to working in Russia, and he has already mentioned this today.
Finally, Mr Wang Yanzhi, President of the Silk Road Fund. This entity hardly needs any introduction either, since the Silk Road Fund is proactively investing in the Russian energy sector, owns a stake in SIBUR, and has invested in Yamal LNG. Together with NOVATEK and Sovcomflot, they established Maritime Arctic Transport, a company that is developing the Northern Sea Route.
This is to say that all the investors here today have worked in Russia and they shared their experience. Overall, it was quite positive, which is excellent news.
Once again, thank you very much.
In keeping with our traditions, let us open a Q&A section. Mr President is ready to take questions from the audience. Please, do not be shy and come forward with your questions.
Go ahead, please.
Emily Fletcher: Emily Fletcher from BlackRock.
Earlier this year, Russia began full-scale implementation of the national projects. Significant financial resources have been earmarked for this purpose. However, there are some reports that the disbursements of these funds have been slower than expected. What is your assessment of the progress of these projects and, if the funds are slower to disburse, is there room within the fiscal budget for funds to be diverted elsewhere, and where do you think this would be most effectively diverted? Thank you.
Vladimir Putin: Our budget implementation is definitely better than the use of funds allocated for national projects. This is obvious and clear from open sources.
According to preliminary data, as of today, the rough proportion of the funds actually spent on national projects is 64 percent of the amount allocated, and this is indeed a matter we need to address specifically. You are certainly right about that.
The problem is that a very large part of funding allocated for national projects comes from federal sources, while most of the money is expected to be spent in the Russian regions. This means that since day one, both the Government and the heads of the regions had to better coordinate their efforts. Now their interaction is getting better.
And I would like to note only one thing in this context: our goal is not to spend the money whatever it takes. We need the spending to yield result. The result should be reflected in faster economic growth, higher labour productivity, better quality of labour resources, and ultimately, these efforts should have an impact on people’s well-being, leading to growth in their real incomes.
So, to be able to raise the required amounts for these national projects (and these are the most important areas of development not only for our country, but also for the world: above all, high-tech development, infrastructure, and so on), we even had to raise the VAT. So, it is extremely important for us to be sure that the money we raised for national projects is spent efficiently. This is the most important thing, and we will work on it.
Darcie Sunnerberb: Hello, Mr President. Thank you for your time today. My name is Darcy Sonneberg, and I work at Loomis in the United States.
I have a question for you. Given Russia’s positive trade balance, large international reserves, including the Sovereign Wealth Fund, and the shrinking net external government and corporate debt, do you still see the need, how relevant is it for an important replacement policy?
Vladimir Putin: Yes, indeed, we have high indicators here, and compared to other countries, maybe even higher. These are also factors that are reflected in macroeconomics, creating very good starting points for accelerating economic growth and changing the structure of the national economy. We bear this in mind and take it into account.
As regards the debt burden, in principle, our debt load is very low, one of the lowest in the world. There are small nuances of course – the private sector’s debt burden has decreased, while the debt burden of the Russian Federation, our state debt, has increased slightly. But this does not change the point, and you are right that it is low, very low.
The question is how we spend the National Welfare Fund. After all, we have laws, and everything is spelled out, including in the Tax Code. We are entitled by law to spend the money only when the NWF level reaches 7 percent, or exceeds 7 percent (of GDP). It is now above 7 percent, that's true, and so decisions must be made on what we should do with the available resources.
But, under applicable laws, these funds should be allocated for projects on a repayable basis. These should, of course, be primarily infrastructure projects that bring returns for the entire economy. We are working on this now, we are thinking about it, and decisions are already being made.
By the way, now that it is above 7 percent – that 7 percent threshold is for the free part of our resources, our savings, so we have every reason to take this step, as provided by law. So projects are already being selected, and most of them are at an advanced stage of development. We will continue to work along these lines.
We will also keep an eye on how the funds is being filled, and make estimates for the near future. We will act cautiously, and not squander the money.
But, of course, we should always think about such an important socioeconomic component as people’s real incomes. Again, it is pointless to use these funds recklessly, because they are exhaustible if we act carelessly, but we certainly must tap them to boost economic development and ultimately achieve some kind of social effect.
Andrei Kostin: First sector, please.
Director of Prosperity Capital Management Alexander Branis: Thank you, Mr Kostin.
You are the host of the event. I have two questions, may I ask both because both are interesting. I was silent last year.
Andrei Kostin: Yes. But now the real host has arrived, Mr President, so I will be his aide, ok? (Laughter.)
Alexander Branis: Certainly, if the real host doesn’t object. Mr President, good afternoon! It is nice to see you here again.
Four and a half years ago you signed an executive order on the transfer of a blocking stake in Bashneft from the federal ownership of the Republic of Bashkiria, and a year later Rosneft bought the controlling stake, so now it holds 60 percent of shares while other equity holders, primarily Bashkortostan, hold the remaining 40 percent.
It would seem an efficient owner came on board, but something went wrong because over these years Bashneft’s production has dropped 13 percent; all transactions go through the Rosneft Trading House and the settlement terms worsened and are twice as bad as the average for the industry; and shareholder dividends have decreased (they were about 50 percent of net profits and have dropped to 27 percent). But shareholders received 79 billion in dividends over this period while Rosneft owes Bashneft 84 billion and another 35 billion are deposited, of course in a Rosneft subsidiary bank. This is 50 percent more than was received in dividends.
Andrei Kostin: And the question?
Alexander Branis: My question: What do you think about this situation? Maybe you could offer advice to the newly-elected head of Bashkiria as the man in charge of Bashneft’s largest minority stockholder?
Vladimir Putin: You also have a second question, correct?
As for the situation at Bashneft, I think it’s fair that a considerable part of the stock became the property of the republic, which was not the case before.
As for company operations as such, we need to understand the realities of what is happening there. We have many companies, and I cannot analyse the developments in all of them. This is not the aim because Rosneft is working in the market although it is a company with predominantly public ownership. As such, it follows the decisions made by its shareholders at their general meetings, as well as by its executive bodies, The state does not interfere in its current activities.
As far as I remember, Bashneft has always had good processing capacity but there were problems with production. Without going deep into the problem and without analysing details, I can say as a first reaction that apparently, these are old problems that were linked with production difficulties. But other aspects linked with finances and the like should be looked at.
As for Bashkiria’s position, I would like to assure you that it has always been vigorous. The former leader also paid very serious attention to this, and I hope the new management will have the same approach to this asset that can substantially affect the socioeconomic position of the republic.
Andrei Kostin: I can confirm, as a bank working closely with Rosneft, that the company's position is very strong. It is efficient, and its financial standing is very stable.
For some reason, the Americans are asking good questions here, and the Russians, bad ones. I do not know what to choose now.
Vladimir Putin: We have neither good questions, nor bad ones. We have no bosses, we have no subordinates, we are all in the same position here.
Let's hear the second question, please.
Alexander Branis: Mr Kostin, I have a positive question, not to worry.
Mr President, you mentioned the growth of the stock market; you said the Moscow Exchange index is at its maximum, and so on. Gazprom’s performance has made the most important contribution to this growth this year. You know, the company’s dividends more than doubled, and it is likely to update its dividend policy in early December. There have also been major personnel changes: almost half of the board has been replaced. I wanted to ask about that.
I know that many state-owned companies have undergone changes in recent years, but Gazprom was lagging behind. What do you think is the reason for so much positive news from Gazprom this year? And what should we, as investors, expect from the company in the future?
Vladimir Putin: This has to do with the challenges facing the global energy industry. Gazprom is well aware of this.
All the changes were initiated by the head of the company, Mr Miller, including his persistent position to increase dividends.
I take it that the same policy will be continued, and capitalisation will grow. In fact, it is clearly understated. The capitalisation of Gazprom, as is clear to all analysts, is at a minimum level. Gazprom’s growth potential is even difficult to estimate. It has the largest reserves in the world, and they, of course, should be appropriately reflected in the reporting and evaluated accordingly. Of the biggest global energy companies, Gazprom has the greatest development potential, I have no doubt.
Pavel Begun: Good afternoon, Mr President.
My name is Pavel Begun and I am with 3G Capital in Toronto, Canada. I got a question about the state of affairs at the Eurasian Economic Union. I know in the past there were discussions with concluding agreements with the likes of Singapore, China, Serbia. However, recently things have gone quiet. So, I am wondering if there is some sort of a pause or is the Union going to be restructured? Thank you.
Vladimir Putin: If anything has paused, it is the media coverage. This work continues non-stop as scheduled. We have concluded several free trade zone agreements with our partners, including Vietnam. Work is underway with China, Israel and Egypt.
We operate on the premise that we will follow this path and work with our Chinese friends to integrate the ambitious Chinese Belt and Road economic project with the Eurasian Economic Union. We have created corresponding mechanisms in order to work together at the expert level.
This is not an easy job, and we are well aware of it. The Eurasian Economic Union member states must, of course, carefully look into what goods and on what terms will be supplied to our common market, what the consequences of these goods entering our market will be, and what we are going to get in return for liberalising access of goods and services from other countries to our market.
This is very complicated work for the experts, and the outcome must be carefully balanced. We are perfectly aware of this. However, this work is underway, and we will definitely be moving in this direction.
Andrei Kostin: The person sitting on the left, Emma, would like to ask a question.
Emma Marcegaglia (ENI): Mr President, thank you very much for this opportunity.
I would like to understand what is your assessment of the energy transition that is going on. In ENI we believe that, of course, you have to be compliant with the Paris Agreement, so we are reducing our CO2 emission, our fugitives; we are also investing in the renewables, in all the technology, but we think that of course gas and oil – mainly, gas – will continue to have a very strong role.
As you know, there is this idea in Europe and in some NGOs that gas will not be there in the future. I am sure we share the idea that this is not good and this is not also what is happening. So, I would like to know what is your assessment on this and also would like to know what is your assessment on the geopolitical situation, mainly in the Middle East. You had a great role in having a better situation. Do you think it is now fixed? Or how do you see the situation in the near future?
Vladimir Putin: Our civilisation is making rather good progress, and no one wants us to end up in caves as a result of such progress, either as a result of an environmental collapse or some other unexpected developments.
So, as responsible people, and we in Russia consider ourselves as such, we will strive to ensure that the balance of our energy sector, at least in Russia, is as green as possible. In fact, Russia’s energy balance is one of the world’s greenest. I have several considerations in mind. If you look at the structure of our energy industry, you will see a significant portion of hydroelectric power, nuclear energy and natural gas generation.
Please note that the environment in many countries is largely affected by coal fuel, which is the world’s most widely used primary energy product. Most coal is burned to produce heat. In this sense, neglecting a pure hydrocarbon such as natural gas is, in my opinion, uncalled for, because it is the purest hydrocarbon out there.
When ideas like this are promoted, it sounds like humanity will once again end up in caves, but this time because it will consume nothing, if all energy is reduced to zero, or if we rely solely on solar energy or wind energy or tidal energy. Today’s technology is such that without hydrocarbons, nuclear energy or hydropower, humanity will not be able to survive or preserve its civilisation. This must be taken seriously or, as people say, in an adult-like manner.
When ideas like the one you just mentioned are promoted, it seems to me that it’s not even the interests of the overwhelming majority of countries in their quest to preserve the environment that come into play here, but the competitive interests of those who promote corresponding ideas on the global energy market. These people deftly blend in with today's trends in the public consciousness in an effort to mislead us.
To reiterate, we must proceed from reality. Of course, it is imperative to concentrate resources on developing renewable resources such as hydrogen and other clean sources which will preserve nature for many thousands of years to come and for future generations.
Andrei Kostin: We have not had any questions from the second sector. Please.
Erme Izgi: Thank you Mr President. Erme Izgi from Fiera Capital in London. Thanks for taking my question.
A major underpinning of Russia’s current macroeconomic stability has been sort of the long standing tight fiscal and monetary policies. But arguably this has all come at the expense of aggravate demand and putting pressure on growth. Given the policy space, which you now have available, what do you think could be done to further improve Russia’s immediate growth and demand outlook beyond national projects, which you already announced, like I’ve touched on, which have sort of somewhat a bit of a stall start from the ground. Thank you.
Vladimir Putin: Our solutions are not at all unorthodox. When we speak about inflation targeting, restraining inflation growth and creating macroeconomic conditions for growth, we do exactly what all the other countries do when their goal is inflation targeting.
Our issue in this case is different: Are the Central Bank’s tough and unwavering actions consistent with the current level and structure of the economy? This criticism is directed primarily at the Central Bank. We are perfectly aware of this.
The first thing I would like to highlight is that despite the allegations that there are no democratic institutions in Russia, we do have them in politics and the economy, as well as in society and in public opinion.
In the economy, laws envisage exclusive rights for the Bank of Russia and the Government, which maintain dialogue to formulate our macroeconomic and monetary policies. Of course, the key priority is for the monetary policy to be consistent with the current macroeconomic situation.
Of course, we are all wise after the event, and some experts say now that the Bank of Russia could have lowered the key rate to 6.5 percent much earlier, at least in the first quarter of this year rather than yesterday or the day before. Yes, we could have done this, and this would have likely influenced the growth rate. But the Bank of Russia has a right to pursue an independent [fiscal] policy, and it is using this right in full measure.
I would like to say in this connection that I fully agree with the Bank of Russia that there are very many unpredictable risks. The Central Bank acted conservatively, maybe too much so, but maybe not. We cannot be sure.
Just now, my colleague on the left mentioned Russia’s input into stabilising the oil prices and, by extension, the prices on many other resources related to energy. But what if it had not happened? How would the global markets have fluctuated and how would that have affected Russia’s fiscal revenue?
So I think that the overall situation in our country is absolutely under control. When it comes to both monetary and macroeconomic policy, the performance of both the Government and the Bank of Russia has been satisfactory.
What could be done to achieve the economic growth goals that I spoke about? We have plenty of tools for this. You asked me not to mention national projects although I must say that we expect them to have an appropriate effect in the mid-term perspective – not immediately from the start but in the mid-term.
What do we expect in general? Let’s say we want to transition and we are transitioning to the development of high-tech industries, digitalisation and artificial intelligence. According to the expert community, the introduction of these innovative technologies alone will increase growth by one percentage point every year.
Now, we want to improve the business climate and scale back the administrative burden. As you most probably know (the overwhelming majority of Russians know this), decisions were taken regarding the so-called “administrative guillotine” in order to remove the excessive restrictions that hinder development in this area.
The same goes for improving the performance of law enforcement – and we will also talk about this. Respective decisions were taken recently. There are certain issues there and we will work on them.
As I said in my remarks, the next parameter is boosting the quality of our labour resources. WorldSkills is only one such measure. We are building an entire workforce training system under other projects besides WorkSkills – and we are cooperating closely with the business community. It seems to me that all these initiatives will certainly bring about the result that we are hoping for.
Andrei Kostin: Mr President, you said that the Central Bank’s performance is satisfactory. Is this a “C”?
Vladimir Putin: Depends on the marking system. On a scale of three it would be “excellent.”
Andrei Kostin: Alright. Otherwise they would be very upset.
Vladimir Putin: No, they will not. They are tough young men and ladies.
Andrei Kostin: Young ladies there are indeed great.
Alright. Now, let’s go back to the sixth sector.
Elena Loven: Thank you very much.
Elena Loven, Portfolio Manager at Swedbank Robur in Stockholm.
If I may, I would like to go back to the climate question, since it is something that is extremely painful. In fact, it grew faster than the Russian market this year. You have partly answered it already, but I just wanted to hear from you about Russia’s participation in the Paris Climate Agreement that you approved.
First question: what are the advantages for your country and for the world from Russia joining this agreement, considering that the United States withdrew from it?
Second question: what could enable Russia to deliver on the terms of this agreement, including in terms of legislation, technology, etc.?
Vladimir Putin: Russia’s decision to join this process was not related to the Paris Agreement. We were also part of the Kyoto Protocol, and honoured all the obligations we assumed under it.
The same applies to the Paris Agreement. We will comply with all our obligations under it. As you already know, a resolution to this effect has already been passed at the government level.
Where are we coming from? First, we have to take stock of the factors affecting the development of the national economy. It was said a few moments ago that we intend to add a percentage point to economic growth figures by promoting artificial intelligence and digitalisation. In fact, it provides us a path toward fulfilling our commitments under the Paris Agreement.
We will do everything we can to restructure the Russian economy in order to make it greener. We will invest in challenging spheres in manufacturing and territorial organisation. It is not a secret that we are facing some challenges.
You are certainly aware of the fact that nothing was done to this effect back in Soviet times. For example, environmental concerns were completely off the radar when our major industrial facilities were built in Siberia. In the 1990s, the economy shrank to an unprecedented low, and in early 2000s we focused on preventing the country from falling apart. This is what it was all about.
When 2008 came, we were more or less ready to switch to the best available technology and use it in Russia. We have Russian business leaders in this audience, so you can ask them how it all happened. They came to the Government and said that the moment was not right due to the global crisis. They said that if we switch to these solutions they would be obliged to cut thousands of jobs. This forced us once again to delay the roll-out of these rules.
I now hope that we have everything it takes to deliver on this objective. I am even sure that this is the case. We will implement the decisions approved at the legislative level in major cities where the biggest emitters are located in order to introduce fines following a certain scale against those failing to adopt up-to-date technology that can not only ensure that we meet our obligations under the Paris Agreement, but also our commitments to our people, who must benefit from a better environment and have every right to it. It will begin with the largest cities in terms of emissions and the key sectors, and will expand from there. There is even a government programme to this effect, so we are committed to making consistent efforts in this area.
In this context, there is one more thing I would like to point out to you. We have assumed commitments that go beyond the obligations of EU countries in terms of reducing anthropogenic emissions. I am confident that we will do so.
Daniel Petruzzi: Mr President, how do you improve relations with the United States, where is the common ground? And what are the prospects for reduction or reduced sanctions? Thank you. Dan Petruzzi, DuPont Capital.
Vladimir Putin: Well, as for the sanctions and the prospects for lifting them – you need to ask the US Administration. We did not impose sanctions on ourselves, you know. The US Congress did it for us, so you had better ask them.
But I would like to make a point in this connection. Firstly, the sanctions actually forced us to focus on import substitution, especially in industries we deemed critical for the country's security. This is a wide range of industries: agriculture, medicine, pharmaceuticals, and the defence industry. And in general, we have achieved very serious and positive results.
I will be honest with you, and I can already say this frankly and publicly: the first steps of the sanctions policy made me feel somewhat uneasy. I would like to thank all my colleagues, and the people I do not know, but who work, each at their workplace, in various industries, at plants, design bureaux, and research institutions. They have taken a huge step towards increasing our economic and technological sovereignty. In this sense, all these restrictions have benefited our economy.
But there is a downside of course, and that downside sours things for everyone. It cost billions of dollars. For example, for Europe, in my estimate, and according to the estimates of the Europeans themselves, their losses stand at about 50 billion. By the way, we have lost far less in our relations with Europe. The same holds true for the States. The restrictions that the Administration has introduced in recent years, I don’t remember how many, more than a dozen restrictions have been introduced, affecting more than 400 companies and almost 300 individuals – you know, it had a boomerang effect. For example, they forced their companies to discontinue their participation in offshore projects. What for? These companies had invested certain funds in a particular project and were then forced to leave these projects and lose their money. Who was punished? They punished themselves, shot themselves in the foot, and that was it.
What plans do we have for our relations? I believe that we have many interests in common with the United States. The United States is a great country, and we have always respected it. We were allies in two world wars. It is our common history, and it is a positive history. Of course, we also want to maintain cooperation with it in technology and the economy in general. However, under President Obama – I think I have mentioned this before – our trade plummeted to $20 billion. Over the first two years of President Trump’s term, it increased to $25 billion. Is this a lot or a little? Our trade with Turkey is $25 billion, and we have the same volume of trade with the United States. This is little, of course.
We have common interests in the economy, not to mention energy. We have common interests in the field of international security, because Russia and the United States are the world’s largest nuclear powers. This is the case, for now. This factor must be taken into account. We are cooperating, one way or another, in the fight against terrorism, and we maintain operational interaction in Syria. The same is true about our fight against organised crime and in the field of environmental protection.
Our colleague just mentioned that the United States has withdrawn from the Paris Agreement. I believe that this is a mistake. But I can understand the logic behind this decision, because the previous US Administration assumed obligations regarding [carbon emission] limits that were difficult for the United States. The Paris Climate Accord is a framework arrangement that is not binding, and the US Administration could have adjusted its obligations within this framework. But the current US Administration has decided differently.
Nevertheless, we should try to involve the current US Administration in these matters. It is another area for our cooperation. I believe we can do this. President Trump has said more than once that he is not planning to destroy the global environment but that balanced solutions must be found, in the interests of the American economy. I believe this is something we can discuss as well.
In other words, there are many common platforms where we can work together. We are ready for this as long as our American partners are.
But we see what is still going on there. Thank goodness we are no longer being accused of interfering in US elections; they are accusing Ukraine now. Let them settle this matter between them. However, the factor of internal political struggle is still having a negative effect on Russian-US relations. I hope this will end at some point. We are ready for this.
Jacob Grappengeiser: I would like to ask a question about Ukraine. What are your relations like with Zelensky? Is it possible to solve the difficult situation in Donbass?
Vladimir Putin: It’s a simple question.
The first part can easily be answered. What are my relations like with Zelensky? There are none. I have never met him, but we spoke by phone. He seems to be a nice person, sincere, and I think that he really wants to improve the situation, including in Donbass. I don’t know if he can, although certain positive efforts have been taken – I mean the disengagement of forces and hardware in two villages. Although yesterday officers reported to me that shooting continues from the Ukrainian side. But I still hope that we will not return back to grey zones, because we have already heard from some politicians that the Ukrainian national guard and police must be sent to these zones the troops left.
Yes, of course, order must be maintained in these areas, but we know only too well that the Ukrainian national guard is mainly comprised of nationalist battalions. And if they return, nothing good will come out of it, because reciprocal measures will be immediately taken by the DPR and LPR militia. I hope this won’t happen. And if anything happens, it will only be on an agreement between the sides; and the sides to the conflict are the Kiev authorities and representatives of Donbass, LPR and DPR in this case.
The development prospects of our bilateral relations will mostly depend on Ukraine. We can see that they are constantly raising topics we consider unacceptable and counterproductive regarding the settlement process in Donbass.
For example, the first issue that is often being voiced now is that the Minsk Agreements must be revised.
Second, that the law on the special status of Donbass adopted by the Ukrainian parliament, Rada, must be changed for some other law. President Zelensky, whom you’ve mentioned, answered to this that perhaps it could be done, but he did not know what law could replace it. How should we regard such statements? This is unclear for me. I don’t think this is clear for you either, if this is unclear even for President Zelensky. Perhaps there can be a new law, but he does not know what it should be like.
I would like to draw your attention to the fact that the previous law was agreed upon with Donbass. No other laws, not agreed upon with LPR and DPR, will work. They will only deadlock everything.
Andrei Kostin: Go ahead, fifth sector.
Cristopher Granville: Thank you, Mr Kostin.
My name is Christopher Granville, I work for the TS Lombard investment analytics company. I am also a board member of Baring Emerging Europe. This British investment company invests tens of millions of dollars in stocks of Russian companies.
With my question, I would like to expand on the previous questions about the disturbing phenomenon of global climate change. By the way, all the previous questions on this issue came from female members of our audience so I want to give it a male voice as well. I want to ask you about macroeconomic aspects of this problem.
The growth of demand for hydrocarbons is slowing down. In the long term we can expect an absolute diminution in this demand and, as a result, a landslide in the prices of oil and natural gas. In these circumstances, does it make sense to spend resources of Russia’s sovereign fund, the National Welfare Fund, since the priorities are to diversify the economy and increase non-commodity exports, as was stated today? This holds back any real strengthening of the ruble because it is essentially contingent on increasing the National Welfare Fund expenditure. Wouldn’t it be better to maximise the safety margin and not to spend this money, as it was announced by the Government?
Vladimir Putin: We did not invent anything new here either. And practically all the countries that have sufficient resources in their funds, whatever they are called (ours is called the National Welfare Fund), once these resources have reached a certain level, they are used. The question is how?
You mentioned non-commodity exports. This is exactly what we are going to do. It is one of our tasks. We are not going to spend the National Welfare Fund money on developing the oil and gas industry. We are going to spend it on infrastructure or perhaps on developing high-tech industries.
It could be oil and gas but we have no decisions along these lines. The only reason why we might be considering this type of spending is that we are just forced to do certain things. For example, we have been restricted in buying modern oil and gas equipment, which means we have to simply think about producing it here in Russia, obviously. Although here, too, we do not have any decisions yet regarding the use of the National Welfare Fund resources. We do not even plan to do it.
The colleague sitting on my right just mentioned macroeconomic policy, the policy of the Bank of Russia. What was he hinting at? It was that the containment of the money supply in the economy restrains economic development. So, we rely on the assumption that all these actions will be balanced, timely and will promote faster economic growth.
Your remark that the demand for hydrocarbons will be falling with the decrease in global GDP does not hold water, and I will tell you why. Last year, indeed, growth targets were lower than expected, and even lower this year. Next year, it is assumed – according to forecasts by all global economic institutions – that global GDP will top this year’s, but will still be below the year before last, but the growth rates will remain at the same level. I would say the growth rate of global GDP will increase despite all the problems associated with trade wars, restrictions for political reasons, and things like that.
You must certainly be aware of the forecasts from world experts regarding the growth in the consumption of energy resources. True, if such locomotives as the Chinese and Indian economies cut their growth rates, the volume of energy resources needed in the market will probably decrease. Theoretically, yes. But growth still continues. Growth continues, and fast enough. China has adjusted growth rates, but they are still very high. And in India, they are also high. Global GDP is still growing and will continue to grow, it is a safe bet. This is an absolutely obvious fact. It is unlikely that the global economy will go into recession any time soon, even despite the trade wars between China and the United States.
Moreover, I think that in the near future, even taking into account the domestic political calendar in the United States, no one there is really interested in aggravating trade and economic relations between the United States and China. No one is interested, and they will need to stabilise their politics in the run-up to the elections. So in the medium term, at least the growth rate will be ensured, and the energy demand will be undeniable.
And we are not going to spend NWF money on oil and gas.
Raymond Zucaro: Thank you, my name is Ray Zucaro from the United States, from RVX Asset Management.
Thank you VTB Capital and, more importantly, thank you, President Putin, for showing up.
Now I say look at the world today. I can’t help but see some parallels with what was the Soviet Union and what is the European Union today. I see a fusion of different peoples, of different cultures, with different languages, all unified under a common banner, with a single currency supported by a central entity, supporting the satellite nations of the European Union with the idea of a greater good.
I see the Europeans’ essential bank creating money out of thin air, out of pixy dust, trying to buy the member states together. Artificial rates have replaces what cheap energy and military presence was for the Soviet Union. I can’t help but wonder if Brexit is similar to what happened in the Soviet Union in 1988 with the rise of nationalism in Kazakhstan, in the Baltics – a precursor to its eventual falling apart. So my thoughts are, and my question specifically is, what are your views on the European Union given your pre-imposed Soviet Russia?
Vladimir Putin: Regarding the breakup of the Soviet Union, it had little to do with the rise of nationalism in the Baltics. The basic reason was, of course, an ineffective economic policy, which promoted a social collapse and also had a prolonged effect in the political sphere.
Incidentally, the People’s Republic of China has used the possibilities offered by centralised management and the market economy very wisely. We are analysing its achievements, as our Chinese colleague will tell you. We see that when tenders are held there [for the allocation of funds] from the central sources to micro-level, people are fighting for these contracts. Why? Who is involved? These are economic operators who are working in market conditions, and who are very effective.
I will not go into detail now regarding the US and China accusing each other over the yuan rate and so on, but these are the instruments that are being used very effectively. The Soviet Union did nothing of the kind, and the results of an ineffective economic policy hit the political sphere. The consequences of its collapse were much worse than people could imagine in their worst dreams. I am not going to talk about this now. This is not the place or the time to do this.
As for the European Union, you can draw parallels, although there are some multinational EU countries. I mentioned this before, and these are not my own data but information provided by my colleagues from some EU countries. Here it is: the European Parliament adopts more decisions that are binding on all the EU countries than the USSR Supreme Soviet ever adopted decisions regarding the union republics. A comparison is possible in this sense, although the greatest difference is that the Soviet Union was an integral and strictly centralised country, unlike the European Union.
Back during WWI, there was a scenario for creating the United States of Europe, or the European Federation, but it never came to fruition. The European Coal and Steel Community (ECSC) was created after WWII, and so it went on and on. And now we have the European Union.
However, differences have developed practically overnight, based on practical problems. I do not believe that British taxpayers like paying their taxes when they know that the bulk of their money, and we are talking about tens of billions of euros, will be used to pay for the basic needs of societies that have not reached a certain level of economic development. There are other factors. The decisions taken by the European Parliament ultimately affect all the EU member states. Of course, not everyone likes this.
I do not think I have the right to make any assessments, but I would like to draw your attention to the following: somewhere on the threshold of 2028, some Eastern European countries will have already reached the economic development level and will not receive grants or various kinds of support from the pan-European budget. They will have to pay, like Britain has to this day. And I am not sure they will not have the same ideas as Britain does now.
So, of course, for the European Union to keep going… Incidentally, we are interested in this. We in Russia want to deal with a predictable and understandable partner. We watch with concern what is happening there. A considerable part of our gold and currency reserves are in euros. Despite the decline in trade after various sanctions (trade dropped from $450 billion to about $300 billion) it has started to rise, and the EU is still a major trade and economic partner. So we are interested in everything being maintained and functioning normally. That said, we are analysing what is happening there and, of course, what will happen there in the future.
Your question: can the EU be compared to the USSR? I think the answer is “no.” This is a completely different thing but some parallels are possible. I do not know whether it will be possible to save the EU in its current form, taking into account a few trends I mentioned. But I know that European leaders are aware of this and are certainly thinking about this problem. They have different scenarios aimed at consolidating the EU and making integration more sustainable. I do not know if they succeed but in any event I wish them success.
There is yet another variable there, which is very important for ensuring security. Until now the United States used to say: “We are an umbrella saving you from the Soviet threat and you must pay for this.” Now this idea is not very viable despite the problems with Crimea and games involving Crimea and Donbass. It is clear to everyone that Russia will not attack anyone. Do you understand how many people live in the EU and NATO and what their aggregate economic and military potential is?
This is simply nonsense, total stupidity. The Russian threat is the invention of those who want to profit from their role of the vanguard unit fighting against Russia, to receive perks and preferences. But all this has time limits and that’s obvious to all. This is clear to the leaders of Europe’s major countries.
So, the United States will also have to take some steps to change the quality of its relations with its allies even in NATO. It is no longer enough to say: “We are protecting you, so pay us.” Why would they wish to pay for the upkeep of the defence sector and jobs in the United States? They will develop their own defences. This is what they are saying now. So, you should be more thorough in this respect. Please.
Vladimir Putin: You were not really listening to my answer to the question that your colleague next to you asked. The world’s economic growth rates are really dropping. Let me repeat that this year they are lower than last year; most international institutions predict they will be higher next year, in 2020, but less than last year. Yet they are still being maintained.
We understand the differences arising in the economy. We understand their basic and long-term nature. Regrettably, and this is said in public in the United States, they are not aimed at balancing international economic relations. The main strategic target is to curb the development of China and Russia. I believe this is a mistake, a very serious, deep-seated mistake that is undermining even the positions of the initiators of this policy. However, in my view, this will continue and there is no way we can get away from it. It is an element of this dishonest competition.
Yet the world’s development will inevitably move forward. The question is pace. It may be a bit quicker or a bit slower but I think eventually a balance between interests will be found. Everyone understands that restrictions imposed on one country always affect one’s own interests in one way or another. This will not be seen instantly but those who initiate these processes face negative consequences for themselves and start analysing them in a bid to establish why this happened and how, and try to avoid it in the future.
Eventually a balance of interests will be found, and the development of the world economy is inevitable.
Lei Teng: Thank you, Mr President. My name is Lei Teng. I am working for Russia-China Investment Fund.
Early this year, I have seen both nations’ prime ministers witness the signing [of an agreement] between China Investment Corporation and the Russian Direct Investment Fund to set up a direct fund for the technology development. And recently, I have seen the Russian Direct Investment Fund raise another $2 billion from their international partners to sponsor Russian development of artificial intelligence.
So, my question is, do you think it is important for Russia to use the Direct Investment Fund to fund the digital technology development, such as artificial intelligence? That is the first part of my question. And the second part of my question would be very simple. Do you think Russia may open to use the currency such as RMB, so called Chinese yuan, as dominant currency to set up such fund? Thank you.
Vladimir Putin: The fundamental stability of the Chinese economy is obvious.
I have already mentioned its advantages. The Chinese leadership has successfully created a unique symbiosis between central planning and a market economy at the level of economic operators. This is something that has no precedent anywhere in the world. And I can say with a great degree of certainty that this unique phenomenon is producing very good results. The Chinese economy as a whole functions much more efficiently than many other large economies in the world, including the American one. I think this is a major concern for our American friends and explains the restrictions imposed on China. This is the reason – not a disparity in the trade balance.
The yuan, as you know, is included in the list of IMF currencies, and is confidently taking its rightful place in the world financial market. There are certain exchange limitations on the use of the yuan in global transactions. But our Chinese friends believe that it is too early to make any liberalisation decisions.
But the stability of the Chinese currency is obvious. And this, of course, creates the prerequisites for its wider use in mutual settlements.
In this regard, I would like to note that in Russia the ruble is a fully convertible currency and can be exchanged in any amounts and at any time, and it is very convenient for use. The combination of these positive factors on both sides makes it absolutely realistic to increase mutual payments in national currencies. We are now focusing on this at the level of finance ministries and central banks. The volume of settlements in national currencies is still small, but it is growing. And I hope that it will grow faster. We have every reason to believe it will.
As for the use of investment funds and joint platforms for the development of such a promising area as artificial intelligence, it is not even about the money, not the amount of resources invested. We are in touch with our Arab friends (you may know that I recently visited Saudi Arabia and the United Arab Emirates); we are conducting a dialogue, and they are ready to invest any amount of resources as well. It is not about money, but about common interest.
When a joint platform is created, the resources begin to be used jointly and in areas where one of the parties has a competitive edge – Russia with its the fundamental science and development of fundamental components such as mathematics and related subjects (we have absolutely obvious competitive advantages in this area), or China with its level of development of industry, with the economic component based on the organisation of the industries.
When we combine these competitive advantages on both sides, and make them complementarily useful and interesting, then we will get the greatest effect. This is the purpose of joint investment – finding common interest and increasing common competitiveness.
Esayas Berhanu Endeshaw: Thank you, Mr President. Thank you, President Putin. I do not get any chance to see you in a few-metre distance. This is a good chance to ask you about my region, Africa. So, my name is Esayas, I am coming from Trade and Development Bank, the Eastern and Southern African Trade and Development Bank based in Nairobi, Kenya. So thank you also, VTB, for this invitation and for this great organisation.
So, I think my question is: last year it was a really perfect – last month, actually, a perfect Sochi summit, Russia-Africa Summit. President Putin, I would like to hear your commitment with Sub-Saharan African countries on investment, because if we see especially from the trade between Russia and Sub-Saharan Africa, actually it started at low levels, but increased rapidly to 4.8 billion last year from 1.8 billion in 2010. And Russia is exporting around three billion and importing around 1.7, so this was a promising discussion last month in Sochi. It will increase both sides from the export and import side, but if we see this import and export, which my multilateral bank, TDB, representing 22 states in the Eastern African side, the trade movement between…, even investment is very low in the Eastern African side, I think if we like it or not, for now the emerging market is in the Sub-Saharan African countries after 22 years of staying in Western Europe, it’s returning back to my region. So I think what I would like to hear from you is, what is really your commitment, what you can tell me to take a message to Africa; is there any movements. I know that last month there was a lot of MOUs and agreements signed between Russian companies and African companies, in which we can help also as a multilateral bank, that we can support and then help; I would like to hear that from you. Thank you.
Vladimir Putin: You have just mentioned the problems facing African countries. I will not repeat this now, everyone is well aware of them.
I will take advantage of your question to return once again to my own personal impressions of the Russia-Africa meeting that was held in Sochi.
Firstly, let me reiterate that representatives of all African countries without exception attended the Sochi meeting. This is my first point. This makes it quite clear that Africa is interested in promoting relations with Russia.
Secondly, unexpectedly for me and I would like to ask my African colleagues not to be angry, if someone feels what I say is improper, but there was not one single request. “Give us money,” “Help us,” “Finance this or that” – there was nothing of the kind at all. But there was an interest and there were proposals on working together within the framework of mutual interest based on reasonable market considerations, proposals on investment, and proposals on developing some industries. This is my second point.
And thirdly, the forum’s nature and atmosphere gave me that impression that it was some kind of a family gathering. You know, it was so open, direct, friendly, and absolutely transparent.
Keeping in mind the history of Soviet-African relations, I have every reason to believe that we can and must make as much headway as possible in our relations with the African continent. Of course, this will also depend to a considerable extent on the capabilities of our specific partners. But Africa has a huge development potential, and you and I know this only too well. We will try to convert our political relations to specific economic projects.
The Russia-Africa meeting in Sochi is not a step taken on the spur of the moment in order to reminisce about our good relations with Africa. Oh, no! This is an attempt to put ties between Russia and Africa on a new level and convey to them a new quality, meeting modern requirements and mutual interests.
There is yet another circumstance that caught my attention during private talks, on the sidelines, and at bilateral meetings: the African countries – an overwhelming majority of them – remain quite vulnerable. They are vulnerable with regard to both processes at home and, in particular, outside influences. They need an allied, very kind and unselfish attitude on the part of their foreign partners. Russia is offering relations of this kind, including in the financial sphere, including relations with financial institutions: we are ready to work together both with your institutions and those represented at the Sochi forum.
In any case, we believe – I mean the potential, the human potential, mineral resources, and intellectual capabilities as well, for increasingly more young people in Africa receive a good education both at home and elsewhere and return to their countries – we believe that Africa is a continent of the future and we certainly will do whatever we can to bring relations with Africa to a qualitatively new level.
Andrei Kostin: Thank you very much.
Colleagues, I think that South Africa, where it will be summer soon with its warm weather and elephants running around, is a great subject for completing our panel.
Vladimir Putin: I suggest taking three more questions: one, two, three.
Andrei Kostin: Three more?
Vladimir Putin: Yes. From this sector, the centre and the left.
Andrei Kostin: Very well. Go ahead, please.
Alexander Liberov: Mr President,
Alexander Liberov, CEO of Siemens in Russia.
Here is my question. You have mentioned infrastructure projects and how important they are for Russia. My question has to do specifically with the high-speed rail. This matter has been discussed for quite a while now in Russia. At first it was about building a high-speed railway between Moscow and Kazan, and now about linking Moscow to St Petersburg, and Nizhny Novgorod. What is your personal opinion on this project? Is there any chance for it to succeed, in your opinion?
For our part, Siemens stands ready to lend its proactive support to this initiative.
Vladimir Putin: You know, I have a purely market-based perspective on this matter. Calculations have to be carried out. Of course, they have been making these calculations for a long time now, but this still needs to be done.
We know how high-speed rail has been developing in many countries, and how the development of this transport benefits the economy. We have to have an understanding and take a final decision on what would serve us best: high-speed rail or just regular fast rail.
We have to look at the speed at which cargoes move around Russian rail lines in order to understand whether a certain increase in the speed will fit the definition of high-speed rail or not. What would be the most effective solution? We can calculate performance for both cargo and passenger traffic. The funds have been allocated, so this project can be carried out. The funds can come from the National Wealth Fund, for instance. This is one of the ways of using it, as I have said when talking about infrastructure. The important question here is what will be the returns. Let me specify that I am talking about medium-term rather than long-term returns. These are the only considerations that guide our decisions.
Go ahead, please.
Nicolas Tjandramaga: Hi, my name is Nick Tjandramaga; I work for Total, the French energy company.
Russia has become a major decider in the oil price, a swing producer as important as OPEC. Oil price remains very important for Russia. Russia also sits on, technically, as big shelf reserves as the US. Now if you… economically, probably not feasible to explore, but if you conceptually would be able to apply the technology and a lower cost curve that the US shelf producers are having now, you could potentially develop yourself into the largest oil producer by far. It will require effort. Do you think this is desirable, because I mean, you are already quite commodity exposed, independent of ESG. Environmental. Thank you.
Vladimir Putin: Firstly, Russia has a major influence on the global energy market. But the greatest effect comes from working in conjunction with other major producers. Only coordinated efforts bring the best results for global energy markets. In this sense, we will continue working with Saudi Arabia and the Gulf and OPEC countries as part of the OPEC+ system created in recent years. This is my first point.
We may have differences over minor issues, but we share one common goal. The challenge is to build a balanced market that is acceptable for producers and consumers alike. Most importantly – I would like to emphasise this – it must be a predictable market.
With regard to production volumes, Russia was number one in the world not so very long ago. Output is not an end in itself. Incidentally, despite certain restrictions, the total production volume in Russia has slightly increased.
If we are speaking about shale oil, let us wait for the Americans to spend their money on developing innovative technology for the production of shale oil, and then we can walk off with it. We have to see if we are interested in this technology at all and then buy it inexpensively. We are working on it ourselves as well. We really do not have to walk off with anything (I am just joking, or they will blare it out for the entire world to hear); so, we are closely following this.
The fact is that today's technologies of shale oil and shale gas production are, without any exaggeration, barbaric and bad for the environment. In some areas of shale oil production people get black slurry instead of tap water in their homes. We will never use such production technology no matter how lucrative it may be. We can produce oil off the shelf and on land, so we do not have such an urgent need to use the shale technology. Most importantly, there is no need to increase supply on the global market.
With regard to production in the United States, it is becoming an exporter, indeed, and we are well aware of it. We realise that it is taking up certain niches, but these are not our niches. That is my first point.
Secondly, their manufacturing output is up, their GDP is growing, and consumption will follow.
Thirdly, there are growth restrictions in the United States as well. I am not going to list the reasons behind such restrictions. Our analysts believe that US production has reached, as the oil people say, “a plateau.” We do not predict any serious growth.
With everything that I mentioned now and several other considerations that I did not mention, we feel comfortable and confident, and we will continue to grow. We will expand our own energy industry, production of oil and gas, and we will improve the production technology. We will also work on reducing consumption and improving energy efficiency of our economy.
Thus, we are keeping busy, but we are closely following what is happening in the world as well. Of course, you can rest assured that Russia will always be a responsible participant of the global energy market.
Andrei Kostin: Colleagues, your last question, please.
Ioannou Jason Karim (Barak UK Limited): Thank you very much to VTB and the panellists.
Mr President, my name is Jason Joannou; I am a judo black belt and an oil trader. If later visionary… a visionary plan for Africa…
Vladimir Putin: What is your weight category?
Ioannou Jason Karim: Ultra-heavy weight.
Vladimir Putin: We will be meeting with you either at a desk, or when we will have tea and congratulate each other on another victory.
Ioannou Jason Karim: I look forward to it, sir.
You know, I am reminded of sensei Jigoro Kano’s five principles of Kodokan judo, specifically his third principle, in your vision for Africa, which is ‘consider fully, act decisively.’ A number of people have looked at Africa and seen great opportunity, but have not invested in the infrastructure. If you look at Nigeria – two hundred million people with four gigawatt of its solar capacity. It is not just transfer technology that is needed, it is infrastructure. It is education. It is processes, like you said. In terms of your near-term and your medium-term vision, are there any areas of infrastructure or natural resources that you see very opportune to Russia of area of cooperation? And then, my second question is, how can I get training with the great Alexander Karelin?
Vladimir Putin: Mr Karelin, as you know, was a free-style wrestler, not a judoka. So, if you want to get a competitive edge over him, you had better not try, because he is still in very good shape. True, I do not know when you stopped training. But we should not meet on a tatami or a wrestling mat. I believe the active phase of our sports activities, at least in the case of wrestling, is in the past.
As far as relations with Africa are concerned, I have already commented on this and will hardly be able to add anything of substance.
With a population of 200 million, Nigeria is certainly an African giant. This has to do not only with the scale of oil production. Nigeria is a very promising country. We have very good relations with Nigeria.
As for infrastructure, you know we also have much to offer. I am referring to pipeline transport, aviation, railway transport, motor roads, power production and electric transmission lines, as well as the internet. You know we have many well-thought-out and specific proposals for our African friends. I hope they will be implemented, including in Nigeria.
Personally for you, I wish all the best both in your professional activities and in your sports career.
Thank you very much.
Andrei Kostin: Colleagues, we are adjourning. Let us thank Mr Putin for a very informative, interesting and lengthy discussion and all those present for their participation. We hope to see you tomorrow on the second day of this forum.
Vladimir Putin: Thank you very much.