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Colleagues,

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It really is a great pleasure to greet everyone taking part 

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in the Russia Calling! forum.

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We know from past occasions and see again today that this forum brings 

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together prominent businesspeople and leading business consultants 

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in investment and banking.

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It attracts those who ‘make the weather’ on the financial markets 

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and influence companies’ and organisations’ investment strategies.

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Taking part in this panel session is a good opportunity for direct 

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discussion of key economic issues and our plans for ensuring economic 

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growth and improving our business climate.

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It is the chance to discuss in general the prospects for investment 

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cooperation and work on the Russian market.

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I note that we have achieved sustainable macroeconomic stabilisation 

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over these last few years.

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The inflation rate is coming down now and was 6.

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4 percent a year at the start of October.

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I remind you that at the same moment in 2015,

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it was 15.7 percent, but is now 6.4 percent. This is clear progress.

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We expect that the inflation rate will hit a new historic minimum 

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by the end of this year and come down to below 6 percent.

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I remind you the lowest inflation rate in Russia’s recent history was 

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in 2011, when it came down to 6.1 percent.

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Next year, we will come close to our declared target of 4 percent.

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Our national currency, the ruble,

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has become considerably less volatile and the Central Bank’s 

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international reserves are growing.

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They currently stand at around $400 billion.

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At the start of this year, they came to $368 billion and were up 

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to $397.7 billion on September 30.

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The figure is floating and is now close to $400 billion.

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One important sign of stabilisation is that the real sector of our 

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economy is no longer falling and the import replacement 

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policy is producing results.

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In some sectors, such as machinery and equipment, light industry,

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and timber processing, we are seeing modest but nonetheless 

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quite confident growth.

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For reference, I can tell you that production of machinery 

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and equipment was up by 3.

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6 percent, textile production rose by 4 percent,

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chemicals production increased by 4.

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9 percent, and production of shoes and leather goods posted an increase 

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of just over 9 percent.

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Russia’s agriculture sector continues performing well,

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up 3.4 percent over the first 8 months of this year.

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Foodstuffs production is up 2.4 percent.

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The pickup in the economy can be seen in the banking sector too.

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The Central Bank is gradually lowering its key rate.

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Overall, we are seeing a trend for lending interest rates to come down.

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Rates are still quite high and lending to the real sector has not yet 

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recovered in the sense it is not yet enough to cover 

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lending needed for sustained economic growth.

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The portfolio of loans to the real sector,

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which I would say is one of the problems we face today,

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actually dropped over January-September by 6.8 percent from 33.

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3 trillion rubles to 31 trillion rubles.

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But nonetheless, the improvement in our macroeconomic conditions has 

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encouraged new interest in the Russian market.

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This summer, for the first time in a long while we registered a balance 

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of payments surplus on capital account.

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Net capital outflow decreased five-fold over the first three quarters 

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of this year compared to 2015, down to $9.6 billion.

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I remind you that in 2015, the figure for the same period was more than 

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$48 billion, and total net capital outflow in 2015 was 

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$57.5 billion. Now it is $9.6 billion.

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Another sign of the growing business interest in Russia is that the net 

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flow of foreign direct investment into Russia’s 

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non-financial sector increased 3.

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6-fold over the first three quarters of this year and came 

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to $8.3 billion.

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Stock market capitalisation is growing.

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The MICEX and RTS indices each added around 200 points.

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These are good trend indicators and reflect the level of confidence 

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in Russia and the business community’s assessment of our 

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country’s prospects. This assessment is very important to us,

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particularly now, when the stability we have achieved has not yet 

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become steady long-term growth.

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At the same time, we are fully aware that economic growth does not 

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happen automatically and that we need to work on creating 

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the conditions for growth.

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In this respect, I want to say a few words about our 

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economic agenda for the upcoming period.

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First, we need to support the emerging trends for improved 

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macroeconomic stability, including by continuing our efforts to achieve 

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our inflation targets and continue a responsible budget policy.

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Speaking frankly, perhaps it is still a bit early in today’s situation,

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but the Government does have a dose of healthy optimism and I certainly 

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support them in this too.

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The Government will examine the draft budget tomorrow.

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We succeeded in balancing the 2017 budget with a 3-percent deficit.

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This is an acceptable level, even compared to the world’s 

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leading economies. Of course, we are fully aware that this does 

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represent a significant amount for our economy and we know that we must 

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be very careful with this deficit during budget planning and execution.

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This is precisely the approach we will take.

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The Government was able to obtain this figure by optimising public 

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expenditures and making them more effective.

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Federal budget spending as a percentage of GDP will drop from 19.

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8 percent in 2016 to 18.5 percent in 2017 and 16.2 percent in 2019.

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Specialists, which include the majority of people here today,

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all realise that this not a simple task.

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But we think that the task has been formulated properly and we will 

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proceed carefully along this path,

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taking care at the same time to respect our social 

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commitments to the people of Russia.

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Second, in the context of the current limitations,

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we must make maximum use of existing opportunities 

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and reserves for economic growth.

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We have created many new instruments to encourage investment recently.

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These include the zones offering particular tax breaks,

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development institutions, and incentives of different types.

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I propose discussing here today how effectively these mechanisms are 

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working and what we can do to make them more effective,

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not increase their number, but improve their quality.

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Third, we need to continue our efforts to remove barriers 

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to private initiative.

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I am talking not just about administrative barriers making 

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it hard to enter the market.

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We need to give particular attention to technical issues such as access 

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to the best technology and a qualified workforce.

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We often repeat like a mantra these days that the notorious sanctions 

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are having little impact. But they do have an impact.

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We feel this above all in restrictions on technology transfers.

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This causes losses for the Russian economy and for the global economy 

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in general, because the Russian economy is without question 

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an important part of the general global economy.

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Those who impose these sanctions are therefore ultimately 

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harming themselves. But I think that we will find ways 

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for coping with this situation too.

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This concerns the workforce too.

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Yes, we have always been proud of the quality of our education 

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and of our workers’ high qualifications,

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but we still have much to do to ensure that this meets global 

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standards, and we have to even try to be a step ahead in some things.

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It is a key task for the Government to draft an exhaustive list 

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of measures to take in this area and make necessary funding provisions.

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Friends,

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Today Russia needs to achieve a new quality of economic growth 

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and support concrete initiatives to create new jobs,

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spread new technology and raise labour productivity.

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This is our strategic task.

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We are ready for this work and will follow this road.

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We most certainly invite to join us all who are interested 

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in partnership and cooperation with us.

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Thank you very much for your attention. (Applause)

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Thank you, Mr President.

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Colleagues, you will now have the chance to put questions 

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to the panel participants.

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Mr President, if you permit, we received a number of written questions 

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from the forum participants before the session began.

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Perhaps I could take one of these questions to get the discussion going.

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The question is probably rather an everyday one: “Mr President,

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you have been travelling around Russia and meeting with business 

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representatives for many years now.

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Comparing your most recent impressions with your observations from,

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say, 10 years ago, what are the biggest changes in entrepreneurs’ mood,

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problems and interests that you have noticed?”

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You know, people’s mood, confidence in their own ability,

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and confidence in the state authorities’ ability to resolve the issues 

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facing the country are very important factors for economic stability 

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and even for ensuring the needed pace of economic growth.

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It is very clear that people have more confidence today.

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But at the same time, this creates particular responsibilities 

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for the authorities at all levels, the Government, the President,

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the State Duma deputies, and the regional authorities.

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We need to maintain this trend,

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support it and develop it further.

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I hope very much that we will succeed here.

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Colleagues, I ask the audience to put questions now 

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to the panel participants.

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Can I ask you to please keep your questions brief and avoid 

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lengthy commentary?

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Thank you.

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Thank you, Mr President. Brett Diment,

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Aberdeen Asset Management.

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We’re one of the larger asset management companies in Europe, with 14

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billion dollars under management.

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We have extensive investments in Russian ruble government bonds,

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US dollar government bonds issues by the Russian Federation 

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and corporate bonds. Russia has had an extremely impressive 

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macro-stabilisation over the past two years,

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after the shock of the lower oil price –

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and that is set to continue for the next three years with 

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fixed nominal spending.

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And that’s quite a contrast to a lot of the countries we see,

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not just among Russia’s peers, but if you look in the UK or the US,

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there’s growing pressure to increase government spending.

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Is that a risk that we could potentially see in Russia over 

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coming years?

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This is not a general trend in the world.

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The United States, Britain and several other countries might be 

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pursuing this policy, but in other countries, in continental Europe,

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for example, we see that economic officials are making other choices 

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and support consolidating budget spending and state spending 

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in the broader sense in general.

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The truth is always somewhere in the middle,

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and we are trying to choose precisely this golden mean.

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As you heard, I said in my opening remarks that we will limit spending 

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that is not effective and will make state spending more effective 

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in practically all areas.

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At the same time, we will raise the quality of management 

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in the broad sense of the term.

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I think that if we concentrate on resolving the tasks before us through 

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these means, we will be successful.

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Thank you.

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Colleagues, who is next?

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Thank you, Mr President.

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I am from Metzler Asset Management from Germany.

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We have an Eastern European fund –

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half a billion dollars invested in Eastern Europe,

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with Russia being the largest part.

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So it is a very important country for us.

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My question will be on economic performance.

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Compared to 2015 and 2016, the level of oil price was broadly unchanged 

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and the sanctions as well were broadly unchanged,

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but the economy has struggled to return to growth.

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What are, in your view, the limiting factors for that,

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and also what kind of structural reforms are needed 

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to overcome the growth performance? Thank you.

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The most important thing for us now is to raise labour productivity.

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This is a key issue. Equipping the real sector of the economy 

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and introducing new technology are related issues.

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I want to repeat what I just said.

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We need to improve management quality.

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Poor management quality is one factor holding back growth.

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There are also a whole range of factors regarding economic 

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diversification in general.

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We have stated our priorities.

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They remain unchanged and we will continue to follow them.

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As I said, we hope very much for more active work from our banking 

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institutions as far as investment activity is concerned.

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We will support and develop the instruments I have spoken about,

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the free zones, priority development areas,

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00:16:23.225 --> 00:16:25.916
and breaks for various types of activity,

235
00:16:25.916 --> 00:16:28.512
including for small and medium-sized business,

236
00:16:28.512 --> 00:16:30.570
high-tech production facilities and so on.

237
00:16:30.570 --> 00:16:30.997
Thank you.

238
00:16:30.997 --> 00:16:32.540
Who is next? Please, go ahead.

239
00:16:32.540 --> 00:16:38.780
Thank you for your thoughts, Mr President.

240
00:16:38.780 --> 00:16:43.893
My question relates to the role of the state controlled banks.

241
00:16:43.913 --> 00:16:48.270
Over the last two years, we witnessed a steady and substantial 

242
00:16:48.270 --> 00:16:54.694
concentration of the Russian banking sector and domestic credit,

243
00:16:54.694 --> 00:16:57.593
centred on the state-controlled banks.

244
00:16:57.593 --> 00:17:00.032
Thanks to sanctions, they also face diminished competition 

245
00:17:00.032 --> 00:17:01.307
from the global markets.

246
00:17:01.307 --> 00:17:07.788
Is this state of play desirable? Or should the government and the Bank 

247
00:17:07.788 --> 00:17:13.695
of Russia should consider measures to deliberately increase 

248
00:17:13.695 --> 00:17:16.351
the footprint of privately controlled institutions? Thank you.

249
00:17:16.351 --> 00:17:25.735
Russia’s consolidation of banking assets is no different in nature 

250
00:17:25.735 --> 00:17:27.792
to the global trend in this area.

251
00:17:27.792 --> 00:17:33.959
Many decisions were taken in this sector after 2008,

252
00:17:33.959 --> 00:17:37.711
following the fluctuations on the global markets,

253
00:17:37.711 --> 00:17:46.178
decisions that concerned preventing monopolisation of markets and so 

254
00:17:46.178 --> 00:17:49.120
on, but no one is actually implementing these decisions 

255
00:17:49.120 --> 00:17:52.717
and consolidation of banking assets is taking place everywhere.

256
00:17:52.717 --> 00:17:54.497
Russia is no exception in this regard,

257
00:17:54.497 --> 00:18:00.330
because no effective market instruments to restrain this 

258
00:18:00.330 --> 00:18:01.730
kind of consolidation have been found yet.

259
00:18:01.730 --> 00:18:08.578
Indeed, we have four major banks with state participation: Sberbank,

260
00:18:08.578 --> 00:18:14.167
VTB – the host of today’s venue for our discussion –

261
00:18:14.167 --> 00:18:18.934
Gazprombank and Rosselkhozbank.

262
00:18:18.934 --> 00:18:20.823
They have controlling interest, that is,

263
00:18:20.823 --> 00:18:24.347
more than 51 percent of assets. This is so.

264
00:18:24.347 --> 00:18:26.887
Let me repeat that the same thing is happening in the rest 

265
00:18:26.887 --> 00:18:30.860
of the world. But I want to draw your attention to the fact that 

266
00:18:30.860 --> 00:18:34.603
despite the efforts of the Bank of Russia 

267
00:18:34.603 --> 00:18:45.007
(Central Bank) to rid the market of different quasi-banking structures 

268
00:18:45.007 --> 00:18:51.615
by depriving them of licenses, Russia still has almost 600 banks.

269
00:18:51.615 --> 00:18:54.154
If we count other credit institutions,

270
00:18:54.154 --> 00:18:58.870
this number exceeds 600. I think the total is 648.

271
00:18:58.870 --> 00:19:05.270
In other words, we have enough banking institutions and the top ten are 

272
00:19:05.270 --> 00:19:10.050
mostly banks with private capital.

273
00:19:10.050 --> 00:19:14.865
Yes, the afore-mentioned four banks are in the lead but we 

274
00:19:14.865 --> 00:19:17.606
don’t see it as a big problem.

275
00:19:17.626 --> 00:19:20.275
The goal of the Bank of Russia –

276
00:19:20.275 --> 00:19:25.066
and I think all experts understand what I’m referring to –

277
00:19:25.066 --> 00:19:28.221
is to rid the banking system of inefficient and unreliable 

278
00:19:28.221 --> 00:19:30.401
financial institutions. 

279
00:19:30.401 --> 00:19:33.591
Needless to say, this should be done with caution in order to prevent 

280
00:19:33.591 --> 00:19:36.441
damage to economic entities and individuals.

281
00:19:36.441 --> 00:19:39.116
Relevant compensation should be paid in time 

282
00:19:39.116 --> 00:19:42.778
and in the amounts established by the law.

283
00:19:42.778 --> 00:19:46.573
However, I think the Bank of Russia still made a mistake,

284
00:19:46.573 --> 00:19:48.563
at least in the past few years.

285
00:19:48.563 --> 00:19:53.333
It should have taken this decision earlier. This is the whole point.

286
00:19:53.333 --> 00:19:55.325
But better late than never.

287
00:19:55.325 --> 00:19:57.017
Still, let me repeat that it is necessary to act with great caution 

288
00:19:57.017 --> 00:19:59.180
and pay particular attention to the interests of private individuals 

289
00:19:59.180 --> 00:20:01.833
who are bank depositors, our citizens.

290
00:20:01.833 --> 00:20:12.298
Where to go from here? I think we should concentrate on the quality 

291
00:20:12.298 --> 00:20:19.086
of regulation and control rather than the number of banks.

292
00:20:19.086 --> 00:20:20.274
May I add a few words?

293
00:20:20.274 --> 00:20:21.893
Of course, you are the boss.

294
00:20:21.893 --> 00:20:24.281
No, you are the boss Mr President.

295
00:20:25.941 --> 00:20:32.627
Mr President, this issue is very important for us because the Western 

296
00:20:32.627 --> 00:20:34.243
press (just recently I received a query)

297
00:20:34.243 --> 00:20:39.656
keeps making the claim that a state bank is a bank chaired 

298
00:20:39.656 --> 00:20:41.204
by the Kremlin or even you personally.

299
00:20:41.204 --> 00:20:43.643
As if you call up and give instructions.

300
00:20:43.643 --> 00:20:45.439
No matter how many times I tell them this is not right…

301
00:20:45.439 --> 00:20:47.943
This is a Government bank, so that would be Mr Medvedev.

302
00:20:47.943 --> 00:20:49.272
This is what I wanted to say.

303
00:20:49.272 --> 00:20:53.146
The IMF has just issued its report and the IMF obviously 

304
00:20:53.146 --> 00:20:56.451
does not favour state banks.

305
00:20:56.451 --> 00:20:59.227
Commenting on this report Karl Habermeier 

306
00:20:59.227 --> 00:21:01.729
(who led the IMF team that made it)

307
00:21:01.729 --> 00:21:07.787
said that although it is believed that in developing economies state 

308
00:21:07.787 --> 00:21:09.365
banks act on instructions from the government,

309
00:21:09.365 --> 00:21:11.807
this is not the case in Russia.

310
00:21:11.807 --> 00:21:18.107
He wrote that in Russia state banks operate in an absolutely 

311
00:21:18.107 --> 00:21:24.213
competitive and commercial environment and do not differ from private 

312
00:21:24.213 --> 00:21:25.366
commercial banks in their activities.

313
00:21:25.366 --> 00:21:28.571
So all those who are interested in this issue can consult 

314
00:21:28.571 --> 00:21:33.062
the IMF website. Even the IMF acknowledges that by and large there is 

315
00:21:33.062 --> 00:21:36.560
not much difference in the operation of these banks.

316
00:21:36.560 --> 00:21:39.463
I believe this topic has been built up into something it is not.

317
00:21:39.463 --> 00:21:43.787
I would like to add something about guidance,

318
00:21:43.787 --> 00:21:50.106
too. I think if we gave proper guidance on the operational management 

319
00:21:50.106 --> 00:21:53.061
of state-owned banking institutions,

320
00:21:53.061 --> 00:22:00.314
bank lending for investment activities would be different.

321
00:22:00.314 --> 00:22:10.689
For your information, investment lending from banks is only 8 percent;

322
00:22:13.489 --> 00:22:19.885
50 percent of investment is provided by participants in economic 

323
00:22:19.885 --> 00:22:25.719
activities, 18 percent comes from the federal budget,

324
00:22:25.719 --> 00:22:30.321
and only 8 percent is provided by banking institutions.

325
00:22:30.321 --> 00:22:46.839
Meanwhile, bank profits rose to 600 percent compared to last year.

326
00:22:46.839 --> 00:22:54.480
However, let us assume that the last year’s number was very small 

327
00:22:54.480 --> 00:22:58.158
and the increase made up 600 percent.

328
00:22:58.158 --> 00:23:02.566
But if we look at the capital base,

329
00:23:02.566 --> 00:23:05.427
which is quite big ‒ if I am mistaken,

330
00:23:05.427 --> 00:23:07.532
Ms Nabiullina [Central Bank Governor] will correct me ‒ about 9 

331
00:23:07.532 --> 00:23:19.574
trillion rubles plus assets, we can see that Russia’s 

332
00:23:19.574 --> 00:23:25.503
banking system is alive and kicking.

333
00:23:25.503 --> 00:23:31.765
According to the Bank of Russia, the minimum rate should be 8 percent,

334
00:23:31.765 --> 00:23:33.659
whereas the real rate is 12.5 percent.

335
00:23:33.659 --> 00:23:36.115
So we hope that the role of financial institutions,

336
00:23:36.115 --> 00:23:38.856
especially banking institutions, including those that are state-owned,

337
00:23:38.856 --> 00:23:41.938
in financing and lending to the Russian economy,

338
00:23:41.938 --> 00:23:48.548
to the real economic sector will grow without any 

339
00:23:48.548 --> 00:23:51.451
administrative interference in their activities.

340
00:23:51.451 --> 00:23:55.051
I strongly believe that VTB Bank would operate even better 

341
00:23:55.051 --> 00:23:59.078
if you gave guidance, Mr President.

342
00:23:59.078 --> 00:24:05.255
Please, colleagues. The next question comes from CNBS.

343
00:24:05.255 --> 00:24:07.265
It always asks tricky questions.

344
00:24:07.265 --> 00:24:09.763
Maybe we should also hear one tricky question.

345
00:24:09.763 --> 00:24:12.545
Thank you very much, Mr President.

346
00:24:12.545 --> 00:24:17.670
I’m Rick Boucher, a former member of the United States Congress,

347
00:24:17.670 --> 00:24:21.907
and I’m currently a partner in the law firm Sidley Austin.

348
00:24:21.907 --> 00:24:25.960
I’m concerned about the apparently deteriorating quality 

349
00:24:25.960 --> 00:24:29.794
of the relationship between the United States and Russia.

350
00:24:29.794 --> 00:24:36.036
It’s a leading issue in our presidential campaign.

351
00:24:36.036 --> 00:24:37.985
It’s in the news every day.

352
00:24:37.985 --> 00:24:42.150
And I think we all could agree that business is stronger both in Russia 

353
00:24:42.150 --> 00:24:44.311
and the US when the relationship between our countries is 

354
00:24:44.311 --> 00:24:51.060
stronger as well. So, I would be interested in your view of the nature 

355
00:24:51.060 --> 00:24:54.175
of our bilateral relationship going forward,

356
00:24:54.195 --> 00:24:57.980
the steps that you think can be taken to make it stronger.

357
00:24:57.980 --> 00:25:03.966
And specifically, in the interest of removing the Ukraine-related 

358
00:25:03.966 --> 00:25:08.121
sanctions, what barriers you see to the implementation of the Minsk 

359
00:25:08.121 --> 00:25:12.500
Accords and when do you think the Minsk Accords will be 

360
00:25:12.500 --> 00:25:14.364
fully implemented? Thank you.

361
00:25:15.404 --> 00:25:20.637
We are also concerned by the deterioration of Russian-US relations.

362
00:25:20.637 --> 00:25:24.766
That is not our choice. We have never sought this.

363
00:25:24.766 --> 00:25:30.045
On the contrary, we want to have friendly relations with a vast 

364
00:25:30.045 --> 00:25:33.879
and great country and the world’s leading economy such 

365
00:25:33.879 --> 00:25:36.889
as the US economy.

366
00:25:36.889 --> 00:25:39.853
You just mentioned the crisis in Ukraine.

367
00:25:39.853 --> 00:25:42.882
However, we were not the ones who brought about a coup d’état 

368
00:25:42.902 --> 00:25:47.959
in Ukraine. Was it us who did that? No.

369
00:25:47.959 --> 00:25:51.863
Our US partners make no particular secret of the fact that to a very 

370
00:25:51.863 --> 00:25:54.160
large extent they were behind that,

371
00:25:54.160 --> 00:25:59.004
financing the radical opposition and bringing the situation 

372
00:25:59.004 --> 00:26:01.747
to an unconstitutional change of government,

373
00:26:01.747 --> 00:26:04.412
even though everything could have been done differently.

374
00:26:04.412 --> 00:26:07.881
Former President Yanukovych met all the demands and was 

375
00:26:07.881 --> 00:26:09.896
ready to hold early elections.

376
00:26:09.896 --> 00:26:13.720
Instead, a coup d’état was engineered. Why?

377
00:26:13.720 --> 00:26:18.532
And when we had – to reiterate, had –

378
00:26:18.532 --> 00:26:23.285
to defend the Russian-speaking population in Donbass,

379
00:26:23.285 --> 00:26:30.675
when we had to respond to the desire of the people living in Crimea 

380
00:26:30.675 --> 00:26:32.799
to return to the Russian Federation,

381
00:26:32.799 --> 00:26:38.641
a new spiral of an anti-Russian policy was immediately 

382
00:26:38.641 --> 00:26:41.060
launched and sanctions were introduced.

383
00:26:41.060 --> 00:26:43.284
You brought up the Minsk Agreements.

384
00:26:43.284 --> 00:26:48.253
But we are not the ones who are sabotaging the Minsk Agreements.

385
00:26:48.253 --> 00:26:52.904
I cannot help repeating: we cannot amend the Ukrainian Constitution 

386
00:26:52.904 --> 00:26:54.435
for the current Kiev authorities,

387
00:26:54.435 --> 00:26:56.230
which is a key factor.

388
00:26:56.230 --> 00:27:01.644
We cannot implement the law on the special status of governance 

389
00:27:01.644 --> 00:27:04.382
in Donbass that was adopted by the Verkhovna Rada either.

390
00:27:04.382 --> 00:27:07.026
It has not been implemented so far.

391
00:27:07.026 --> 00:27:09.637
Although, it should have been done as soon as possible,

392
00:27:09.637 --> 00:27:12.119
according to the Minsk Agreements.

393
00:27:12.119 --> 00:27:15.046
I cannot sign the amnesty law adopted by the Rada;

394
00:27:15.046 --> 00:27:18.456
I just cannot do this for the Ukrainian President.

395
00:27:18.456 --> 00:27:22.426
They always refer to the fact that they cannot do it because 

396
00:27:22.426 --> 00:27:24.971
of shootouts in the conflict zone in Donbass.

397
00:27:24.971 --> 00:27:32.254
On September 9, the self-defenders of Donbass unilaterally,

398
00:27:32.254 --> 00:27:42.408
I would like to stress, said they would not respond to the Ukrainian 

399
00:27:42.408 --> 00:27:43.370
Armed Forces’ shelling.

400
00:27:43.370 --> 00:27:46.858
So what? Some political actions were said to be taken 

401
00:27:46.858 --> 00:27:52.481
immediately after that. But nothing is happening.

402
00:27:52.481 --> 00:27:56.439
No direct contacts have been established so far between 

403
00:27:56.439 --> 00:28:03.127
the representatives of Donbass and the official Kiev authorities.

404
00:28:03.127 --> 00:28:08.448
Therefore, if someone really wants the agreements to be implemented,

405
00:28:08.448 --> 00:28:10.895
they should influence all parties to the conflict,

406
00:28:10.895 --> 00:28:13.727
especially the Kiev authorities.

407
00:28:13.727 --> 00:28:16.398
What is stopping that? I cannot understand.

408
00:28:16.398 --> 00:28:19.464
There will be no progress without reaching political 

409
00:28:19.484 --> 00:28:24.340
agreements. This is the first thing.

410
00:28:24.340 --> 00:28:28.183
And now globally. You know, it is very difficult to hold dialogue with 

411
00:28:28.183 --> 00:28:29.770
the current Administration.

412
00:28:29.790 --> 00:28:36.053
You are a former Congressman, I do not know whether the situation was 

413
00:28:36.053 --> 00:28:37.986
always like this, but there is almost no dialogue.

414
00:28:37.986 --> 00:28:42.582
What does it look like? The Administration formulates what it wants 

415
00:28:42.582 --> 00:28:46.510
and then insists on the implementation of its instructions.

416
00:28:46.510 --> 00:28:48.743
But this is a dictate, not a dialogue.

417
00:28:48.743 --> 00:28:51.262
And this applies to almost every issue.

418
00:28:51.262 --> 00:28:55.020
We are ready for dialogue, but dialogue is a search for compromise.

419
00:28:55.020 --> 00:28:58.528
And now I will answer the main question.

420
00:28:58.528 --> 00:29:04.838
What should be done to normalise the situation? The parties should acts 

421
00:29:04.838 --> 00:29:06.702
as partners and take into account each other’s interests.

422
00:29:06.702 --> 00:29:08.429
We are ready for this.

423
00:29:16.769 --> 00:29:20.406
Mr Kostin, thank you.

424
00:29:20.406 --> 00:29:24.479
President Putin, I’d just like to build on that question,

425
00:29:24.479 --> 00:29:31.172
if I might. Given the difficult week that Donald Trump has just 

426
00:29:31.172 --> 00:29:33.867
experienced, are you now making preparations for working with President 

427
00:29:33.867 --> 00:29:40.051
Hillary Clinton next year? A person who has described you 

428
00:29:40.051 --> 00:29:44.883
as “calculating” and a “bully”.

429
00:29:44.883 --> 00:29:49.598
And can I ask you, could you directly address the claims that are being 

430
00:29:49.598 --> 00:29:55.310
made of state-sponsored cyber spying and war crimes in Syria? I’d love 

431
00:29:55.310 --> 00:29:57.857
to know how we deescalate this situation.

432
00:29:57.857 --> 00:30:02.140
What state espionage? Was this translated correctly? What 

433
00:30:02.140 --> 00:30:03.556
is meant by state espionage?

434
00:30:03.556 --> 00:30:04.832
Hackers, I think.

435
00:30:18.852 --> 00:30:20.044
I see.

436
00:30:20.044 --> 00:30:27.034
First. I have often said that the American people will make the choice 

437
00:30:27.034 --> 00:30:28.664
that they consider necessary.

438
00:30:28.664 --> 00:30:33.843
In any event, we will work with any US leader,

439
00:30:33.843 --> 00:30:39.077
whoever that leader is and whoever the president is –

440
00:30:39.077 --> 00:30:44.047
that is, of course, if the US leader wants to work with our country.

441
00:30:44.047 --> 00:30:52.482
A while back, about a decade ago, Russia was never mentioned,

442
00:30:52.482 --> 00:30:55.648
they said there was nothing to talk about with regard to Russia because 

443
00:30:55.648 --> 00:31:00.452
it was a third-rate regional power that was of no interest.

444
00:31:00.452 --> 00:31:04.088
Today, the number one problem in the entire election campaign is 

445
00:31:04.108 --> 00:31:06.361
Russia. It is the main talking point.

446
00:31:06.361 --> 00:31:08.084
That is very welcome of course,

447
00:31:08.084 --> 00:31:15.282
but only partially. Why partially? Because all participants in this 

448
00:31:15.282 --> 00:31:19.491
process are abusing anti-Russian rhetoric and spoiling our 

449
00:31:19.491 --> 00:31:21.601
interstate relations.

450
00:31:21.601 --> 00:31:24.465
And this is bad both for our countries and for the entire 

451
00:31:24.465 --> 00:31:25.693
international community.

452
00:31:25.693 --> 00:31:27.923
Let us not forget that globally,

453
00:31:27.923 --> 00:31:31.901
we bear a special responsibility as the two largest nuclear powers 

454
00:31:31.901 --> 00:31:37.573
for maintaining international peace and security at the global level.

455
00:31:37.573 --> 00:31:42.426
At the same time, you know, as a rule, we try not to talk about this,

456
00:31:42.426 --> 00:31:44.750
but they always whisper this to us in the course of every election 

457
00:31:44.750 --> 00:31:47.264
campaign – this is happening not only now but was also the case 

458
00:31:47.264 --> 00:31:48.855
in the previous election campaign.

459
00:31:48.855 --> 00:31:51.762
They keep whispering into our left ear and then into our right ear: Pay 

460
00:31:51.762 --> 00:31:55.287
no attention to this, all of this will pass and we will be friends 

461
00:31:55.287 --> 00:31:56.549
again. This is wrong.

462
00:31:56.549 --> 00:31:59.731
It is wrong to use Russia as a bargaining chip in internal political 

463
00:31:59.731 --> 00:32:05.339
struggles and damage interstate relations.

464
00:32:05.339 --> 00:32:07.586
That is just not serious enough,

465
00:32:07.586 --> 00:32:08.347
to say the least. That is my first point.

466
00:32:08.347 --> 00:32:14.779
Second, regarding the assumption that Russia is exerting pressure 

467
00:32:14.779 --> 00:32:15.863
on someone, on other countries.

468
00:32:15.863 --> 00:32:24.623
Who is telling us this? Who is saying this? Our partners.

469
00:32:24.623 --> 00:32:26.597
The Administration is doing nothing but putting pressure 

470
00:32:26.597 --> 00:32:31.609
on all countries. They are eavesdropping and tapping their allies 

471
00:32:31.609 --> 00:32:36.946
and using this information. This is my response to the hacker attacks.

472
00:32:36.946 --> 00:32:46.295
What are we witnessing? Some hackers published information about 

473
00:32:46.295 --> 00:32:55.207
the unseemly conduct of Ms Clinton’s campaign headquarters –

474
00:32:55.207 --> 00:32:57.755
supporting one candidate for the party nomination 

475
00:32:57.755 --> 00:32:59.938
at the expense of the other.

476
00:32:59.938 --> 00:33:03.594
Hysterical accusations that this is in Russia’s interests were made.

477
00:33:03.594 --> 00:33:06.242
But there is nothing in Russia’s interests there.

478
00:33:06.242 --> 00:33:12.073
They freak out about it to distract the attention of the American 

479
00:33:12.073 --> 00:33:16.112
people from the importance of what was published by the hackers.

480
00:33:16.112 --> 00:33:20.236
And the importance is that public opinion is being 

481
00:33:20.236 --> 00:33:22.389
manipulated, but nobody talks about it.

482
00:33:22.389 --> 00:33:24.172
Everyone is talking about who did it,

483
00:33:24.172 --> 00:33:26.511
but is it so important who did it? What is important is 

484
00:33:26.511 --> 00:33:37.217
the content of this information. That’s my answer.

485
00:33:37.217 --> 00:33:40.419
Thank you. Second section, please.

486
00:33:41.559 --> 00:34:07.894
Mr President, I represent Alstom.

487
00:34:07.894 --> 00:34:12.460
I have a question that all French people want to ask you.

488
00:34:12.460 --> 00:34:17.593
This is about your cancelled visit to Paris.

489
00:34:17.593 --> 00:34:27.068
You cancelled it because the President’s programme changed too often.

490
00:34:27.068 --> 00:34:35.391
We realise that Hollande’s position was determined by Russia’s veto 

491
00:34:35.391 --> 00:34:39.829
on Syria in the UN Security Council.

492
00:34:39.829 --> 00:34:44.466
Don’t you think your response was too tough?

493
00:34:44.466 --> 00:34:51.708
Second, what signal are you sending to investors? I’m asking this 

494
00:34:51.728 --> 00:34:57.739
because French investors are used to good relations between 

495
00:34:57.739 --> 00:35:04.051
Russia and France. As you understand, we want to keep this habit.

496
00:35:05.331 --> 00:35:07.988
Alstom is a very serious company.

497
00:35:10.628 --> 00:35:16.767
I believe I have developed good chemistry with ordinary Russian 

498
00:35:16.767 --> 00:35:21.701
citizens. I have been doing the job of president for a fairly long time 

499
00:35:21.701 --> 00:35:28.709
but even I cannot say that I speak on behalf of every Russian citizen 

500
00:35:28.709 --> 00:35:34.259
because I am not sure I know the mood of every individual.

501
00:35:34.259 --> 00:35:40.300
But nonetheless Alstom is a large company and probably can speak 

502
00:35:40.300 --> 00:35:49.340
on behalf of the entire French nation, or at least ask questions.

503
00:35:49.340 --> 00:36:00.246
You have just said that our response to the French draft resolution 

504
00:36:00.246 --> 00:36:02.864
in the UN Security Council was too tough.

505
00:36:02.864 --> 00:36:08.514
This is why our French partners and friends reacted like this.

506
00:36:08.514 --> 00:36:12.240
First, I must say that we treasure our relations with France 

507
00:36:12.240 --> 00:36:17.139
and consider France one of our priority partners in Europe.

508
00:36:17.139 --> 00:36:20.339
This is how it has worked out historically and it is the same today.

509
00:36:20.339 --> 00:36:22.229
Regarding this specific case.

510
00:36:22.229 --> 00:36:31.021
You know, we do not like airing this diplomatic laundry.

511
00:36:31.021 --> 00:36:36.894
It may looks nice, but sometimes the smell isn’t too nice.

512
00:36:36.894 --> 00:36:43.839
But if we have to respond, we have to,

513
00:36:43.839 --> 00:36:51.163
and I will answer. It is not our partners who should be offended by our 

514
00:36:51.163 --> 00:36:55.944
veto of the French resolution. We should be offended.

515
00:36:55.944 --> 00:36:57.988
I will tell you why.

516
00:36:57.988 --> 00:37:00.193
Our respected friend and colleague,

517
00:37:00.193 --> 00:37:05.152
the French foreign minister came to Moscow and presented 

518
00:37:05.152 --> 00:37:08.324
the French resolution.

519
00:37:08.324 --> 00:37:15.141
To which our foreign minister said: “We will not vote against it if you 

520
00:37:15.141 --> 00:37:19.773
take our amendments and considerations on this issue into account.

521
00:37:19.773 --> 00:37:24.849
We are deeply involved in this crisis, in these problems;

522
00:37:24.849 --> 00:37:30.077
we know the details.” To which his French counterpart said: “Yes,

523
00:37:30.077 --> 00:37:35.178
of course, nor do we want to be slapped with this kind of veto.

524
00:37:35.178 --> 00:37:41.431
” Our representative to the UN in New York was told the same.

525
00:37:41.431 --> 00:37:44.929
Lavrov laid out the Russian position and there is nothing 

526
00:37:44.929 --> 00:37:45.536
excessive in it.

527
00:37:45.536 --> 00:37:48.092
I can tell you frankly what this was all about.

528
00:37:48.092 --> 00:37:58.991
The French resolution blamed the situation entirely on the Syrian 

529
00:37:58.991 --> 00:38:04.017
authorities and said nothing about the opposition –

530
00:38:04.017 --> 00:38:06.311
in this case I am not talking about terrorists –

531
00:38:06.311 --> 00:38:10.683
the opposition that should also bear some responsibility,

532
00:38:10.683 --> 00:38:14.942
and some tasks should also be put before it. That is my first point.

533
00:38:14.942 --> 00:38:19.391
Second, we stated that we were willing to endorse the initiative 

534
00:38:19.391 --> 00:38:22.715
of the UN Secretary-General’s special envoy Mr de Mistura regarding 

535
00:38:22.715 --> 00:38:25.377
the militants’ withdrawal from Aleppo.

536
00:38:25.377 --> 00:38:30.189
The French side took a positive view of that.

537
00:38:30.189 --> 00:38:35.086
We expected further joint constructive work both with France and with 

538
00:38:35.086 --> 00:38:37.299
other Security Council members.

539
00:38:37.299 --> 00:38:42.989
So what happened next? The French foreign minister left Moscow 

540
00:38:42.989 --> 00:38:49.319
for Washington and the following day he and Mr Kerry accused Russia 

541
00:38:49.319 --> 00:38:54.546
of every sin imaginable; no one talked to us and discussed nothing with 

542
00:38:54.546 --> 00:38:57.459
us, and they threw this resolution at the Security Council,

543
00:38:57.459 --> 00:39:03.038
clearly expecting our veto. Why?

544
00:39:03.038 --> 00:39:05.619
Not for the resolution to be adopted –

545
00:39:05.619 --> 00:39:10.123
they submitted it knowing our position and without even discussing our 

546
00:39:10.123 --> 00:39:12.713
proposals with us – but for it to be vetoed.

547
00:39:12.713 --> 00:39:22.077
Why? To escalate the situation and unleash anti-Russian hysteria 

548
00:39:22.077 --> 00:39:27.994
in the controlled media, in fact deceiving their people 

549
00:39:27.994 --> 00:39:31.475
and their citizens. I am referring now not only to France but also 

550
00:39:31.475 --> 00:39:34.244
to many European countries and the United States.

551
00:39:34.244 --> 00:39:36.071
To all appearances, this is especially valuable 

552
00:39:36.071 --> 00:39:39.182
in the context of an election campaign.

553
00:39:39.182 --> 00:39:42.792
I do not know whether or not this meets the interests of European 

554
00:39:42.792 --> 00:39:50.571
countries, but serving the foreign policy interests and maybe even 

555
00:39:50.571 --> 00:39:54.226
domestic policy interests of its allies,

556
00:39:54.226 --> 00:39:55.746
in this case the United States –

557
00:39:55.746 --> 00:40:04.220
is that the role that should be played by serious politics and serious 

558
00:40:04.220 --> 00:40:14.106
countries that claim an independent foreign policy and the status 

559
00:40:14.106 --> 00:40:16.022
of great powers? I am not sure about that.

560
00:40:16.022 --> 00:40:19.232
We are willing to work with all our partners,

561
00:40:19.252 --> 00:40:23.875
including our French and European partners,

562
00:40:23.875 --> 00:40:28.161
on this very important and pressing problem.

563
00:40:28.161 --> 00:40:33.230
After all, we can see what is going on: Russia is being accused 

564
00:40:33.230 --> 00:40:35.514
of absolutely every sin under the sun, of all crimes.

565
00:40:35.514 --> 00:40:41.230
The airstrike on the humanitarian convoy.

566
00:40:41.230 --> 00:40:43.824
If anyone would know who attacked that convoy,

567
00:40:43.824 --> 00:40:46.041
it’s us. It was one of the terrorist organisations.

568
00:40:46.041 --> 00:40:48.858
And we know that the Americans know that,

569
00:40:48.858 --> 00:40:56.167
but prefer to take a different position and blame everything on Russia.

570
00:40:56.167 --> 00:41:01.333
This will do nothing to help. This is just what I spoke about recently.

571
00:41:01.333 --> 00:41:07.593
This kind of behaviour in the international arena is called 

572
00:41:07.593 --> 00:41:09.892
pressure and blackmail.

573
00:41:09.892 --> 00:41:12.592
However, this has never worked and will never work with 

574
00:41:12.592 --> 00:41:16.950
Russia. (Applause.)

575
00:41:16.950 --> 00:41:18.978
Thank you.

576
00:41:18.978 --> 00:41:22.341
Colleagues, let me remind you that this is an economic forum so perhaps 

577
00:41:22.341 --> 00:41:24.811
there could also be some economic questions.

578
00:41:27.991 --> 00:41:34.676
Mr President, I’m from the Fosun Group,

579
00:41:34.676 --> 00:41:38.062
I’m the chief representative of our Moscow office.

580
00:41:38.062 --> 00:41:43.955
Fosun Group is one of the largest investment groups in China.

581
00:41:43.955 --> 00:41:48.944
We now have now $80 billion dollars in assets,

582
00:41:48.944 --> 00:41:53.845
and half of them are outside China.

583
00:41:53.845 --> 00:41:56.854
The first time we attended the VTB Russia Calling! forum 

584
00:41:56.854 --> 00:42:05.643
was the year 2014. We have already invested hundreds of millions of US 

585
00:42:05.643 --> 00:42:09.265
dollars. Now we have our rep office here and we have a local team,

586
00:42:09.265 --> 00:42:11.358
Fosun Eurasia, here as well.

587
00:42:11.358 --> 00:42:22.693
Sino-Russian relationship has got a lot of attention 

588
00:42:22.693 --> 00:42:23.737
in the past two years.

589
00:42:23.737 --> 00:42:30.433
We see that a lot of effort has been made between Russia and other 

590
00:42:30.433 --> 00:42:43.630
countries in South Asia and other Asia Pacific countries.

591
00:42:43.630 --> 00:42:48.750
What significant results have been achieved through these efforts so 

592
00:42:48.750 --> 00:42:53.278
far? Which of these new directions in Russia’s external economic 

593
00:42:53.278 --> 00:42:59.446
relationships will be the most significant in the long run? Thank you.

594
00:43:02.446 --> 00:43:06.912
By tradition, we have long been developing our relations with countries 

595
00:43:06.912 --> 00:43:09.046
of the Asia Pacific region.

596
00:43:09.046 --> 00:43:15.839
In this context, our special strategic relations with the People’s 

597
00:43:15.839 --> 00:43:19.584
Republic of China certainly play a special role.

598
00:43:19.584 --> 00:43:24.547
Country-wise, it is our largest trade and economic partner.

599
00:43:24.547 --> 00:43:28.009
Yes, in recent years, our trade and economic ties with many countries 

600
00:43:28.009 --> 00:43:35.196
of the region, including China, in the past couple of years, declined,

601
00:43:35.196 --> 00:43:39.427
but they are still considerable.

602
00:43:39.427 --> 00:43:45.879
Last year, our trade with China was worth $63.5 billion.

603
00:43:45.879 --> 00:43:49.038
But to reiterate, with some countries it declined while with others it 

604
00:43:49.038 --> 00:43:51.140
grew a little, for example, with Vietnam.

605
00:43:51.140 --> 00:43:56.367
Our trade with Vietnam is visibly growing.

606
00:43:56.367 --> 00:44:02.635
I would like to note that we have been especially pleased recently with 

607
00:44:02.635 --> 00:44:09.002
the diversification of our relations with Asia Pacific countries –

608
00:44:09.002 --> 00:44:13.819
Japan, India, China and the Republic of Korea,

609
00:44:13.819 --> 00:44:18.470
among others. This includes machine building,

610
00:44:18.470 --> 00:44:23.900
space and the high-tech energy sector –

611
00:44:23.900 --> 00:44:29.392
I mean nuclear energy.

612
00:44:29.392 --> 00:44:36.353
It is especially important that these investment flows are moving both 

613
00:44:36.353 --> 00:44:40.174
ways – to Russia and from Russia.

614
00:44:40.174 --> 00:44:43.824
A number of very large investment projects,

615
00:44:43.824 --> 00:44:46.282
especially in the nuclear power sector,

616
00:44:46.282 --> 00:44:51.303
are to a considerable extent financed from Russian sources.

617
00:44:51.303 --> 00:45:01.910
What could we offer to address the tasks we are faced with and help 

618
00:45:01.910 --> 00:45:08.902
further our relations? This is furthering relations between 

619
00:45:08.902 --> 00:45:14.655
the Eurasian Economic Union and the countries you have 

620
00:45:14.655 --> 00:45:17.411
mentioned, including China.

621
00:45:17.411 --> 00:45:27.918
For example, we have signed a free trade zone agreement with Vietnam,

622
00:45:27.918 --> 00:45:29.825
and it has already come into effect. It is a fact.

623
00:45:29.825 --> 00:45:40.068
We have launched comprehensive talks on developing economic relations 

624
00:45:40.068 --> 00:45:43.800
between China and the Eurasian Economic Union 

625
00:45:43.800 --> 00:45:52.167
(EAEU), seeking to align China’s Silk Road Economic Belt initiative,

626
00:45:52.167 --> 00:45:56.903
which we consider to be very interesting and promising,

627
00:45:56.903 --> 00:46:07.168
with the EAEU. It is a very important and large-scale process.

628
00:46:07.168 --> 00:46:12.432
Of course, we will continue working within the Shanghai Cooperation 

629
00:46:12.432 --> 00:46:17.192
Organisation, especially considering that it is growing 

630
00:46:17.192 --> 00:46:19.301
to an impressive scale.

631
00:46:19.301 --> 00:46:22.301
Actually, it will acquire a global scale after 

632
00:46:22.301 --> 00:46:25.119
the accession of India and Pakistan.

633
00:46:25.119 --> 00:46:36.239
This is a highly optimistic trend in that our trade and economic 

634
00:46:36.239 --> 00:46:42.184
relations with Asian and Latin American countries,

635
00:46:42.184 --> 00:46:47.869
which account for some 28 percent, tend to increase.

636
00:46:47.869 --> 00:46:49.412
Thank you. Colleagues, do you have more questions? Please, Sector 5.

637
00:46:49.412 --> 00:46:52.119
Thank you, Mr President.

638
00:46:52.119 --> 00:46:58.353
I hear a lot of discussion about hackers and a state visit 

639
00:46:58.353 --> 00:47:02.594
being cancelled. But as the gentleman said,

640
00:47:02.594 --> 00:47:05.082
this is an economic forum.

641
00:47:05.082 --> 00:47:08.625
You also talk about Europe, America and Asia.

642
00:47:08.625 --> 00:47:12.648
But from what I understand, the resources are in Africa.

643
00:47:12.648 --> 00:47:14.893
The growth is in Africa.

644
00:47:14.893 --> 00:47:18.180
And we’ve been receiving a lot of lessons, too,

645
00:47:18.180 --> 00:47:19.947
on how we should run our businesses.

646
00:47:19.947 --> 00:47:25.302
So is Russia under your leadership willing to play a more active role 

647
00:47:25.302 --> 00:47:32.094
in investment and partnership in the Central African countries? I’m 

648
00:47:32.094 --> 00:47:38.553
the CEO of the Gabon National Oil Company,

649
00:47:38.553 --> 00:47:41.470
and we’ll be more than welcoming to Russian investment.

650
00:47:41.470 --> 00:47:44.675
I know it’s Russia Calling!, but there might also be Africa calling 

651
00:47:44.675 --> 00:47:48.925
Russia – a voice you should hear in this room. Thank you!

652
00:47:48.925 --> 00:47:56.024
We have traditionally, historically good,

653
00:47:56.024 --> 00:47:59.405
trust-based relations with African countries,

654
00:47:59.405 --> 00:48:04.562
as you know. We had no relations with some countries in the past,

655
00:48:04.562 --> 00:48:09.469
but we had very close ties with other countries,

656
00:48:09.469 --> 00:48:11.384
ties that could be described as strategic partnership.

657
00:48:11.384 --> 00:48:13.762
Of course, we must revive them.

658
00:48:13.762 --> 00:48:23.254
We see that many countries are becoming increasingly active in Africa.

659
00:48:23.254 --> 00:48:28.224
We would have undoubtedly acted likewise at the bilateral level,

660
00:48:28.224 --> 00:48:29.756
by taking all possible efforts.

661
00:48:29.756 --> 00:48:42.700
We will promote this within international organisations such as BRICS.

662
00:48:42.700 --> 00:48:47.437
You know that we have created financial instruments at this group,

663
00:48:47.437 --> 00:48:52.681
including those aimed at cooperation with African countries not only 

664
00:48:52.681 --> 00:48:55.094
through the South African Republic,

665
00:48:55.094 --> 00:49:00.301
but also directly through ties with our African partners.

666
00:49:00.301 --> 00:49:04.801
We are aware of opportunities in Africa.

667
00:49:04.801 --> 00:49:13.023
By the way, some Russian companies have started working in the mining 

668
00:49:13.023 --> 00:49:16.211
and several other industries there.

669
00:49:16.211 --> 00:49:22.464
We cannot and will not do this as the Soviet Union did,

670
00:49:22.464 --> 00:49:24.949
that is exclusively out of political considerations.

671
00:49:24.949 --> 00:49:30.223
But we know that Africa’s potential is huge and should definitely tap 

672
00:49:30.223 --> 00:49:37.561
into it on market principles and based on mutual interest.

673
00:49:37.561 --> 00:49:40.928
I will not enumerate all the projects that some of our companies have 

674
00:49:40.928 --> 00:49:41.690
recently implemented in Africa,

675
00:49:41.690 --> 00:49:51.581
but we will certainly support their efforts there.

676
00:49:58.021 --> 00:50:02.050
Hi, this is Charlie Radcliffe from Berry Palmer & Lyle 

677
00:50:02.050 --> 00:50:04.297
of the London insurance market.

678
00:50:04.317 --> 00:50:08.376
The seventh State Duma started its session last week and United 

679
00:50:08.376 --> 00:50:10.848
Russia’s majority was as expected.

680
00:50:10.848 --> 00:50:14.286
What wasn’t foreseen was perhaps the largest majority ever.

681
00:50:14.286 --> 00:50:17.529
How do you interpret the election results?

682
00:50:20.069 --> 00:50:23.122
There were no surprises. We were right in our forecasts. 

683
00:50:26.402 --> 00:50:37.102
(Laughter.) What I probably did not expect is that United Russia would 

684
00:50:37.102 --> 00:50:40.353
receive so many votes, but the trend was obvious.

685
00:50:40.353 --> 00:50:44.282
It is based on many factors, as I have said,

686
00:50:44.282 --> 00:50:52.479
such as public trust in our domestic and foreign policies,

687
00:50:52.479 --> 00:50:56.409
as well as the consolidation of Russian society. It is a fact.

688
00:50:56.409 --> 00:51:04.547
At the same time, public trust in the authorities in the broad meaning 

689
00:51:04.547 --> 00:51:10.253
of this word, which is how we interpret the election results,

690
00:51:10.253 --> 00:51:18.045
is a huge moral responsibility.

691
00:51:18.045 --> 00:51:20.952
Considering the current economic challenges,

692
00:51:20.952 --> 00:51:30.622
we must preserve the health and stability of the Russian 

693
00:51:30.622 --> 00:51:31.841
economy, which is our priority.

694
00:51:31.841 --> 00:51:38.361
But there must be no question about the implementation 

695
00:51:38.361 --> 00:51:39.919
of our social obligations.

696
00:51:39.919 --> 00:51:49.474
It is a difficult task, but we can fulfil it by acting responsibly and,

697
00:51:49.474 --> 00:51:56.438
as I have said, by gradually improving our governance standards 

698
00:51:56.458 --> 00:51:58.683
and accurately choosing our economic, defence,

699
00:51:58.683 --> 00:52:02.655
security and social priorities.

700
00:52:02.655 --> 00:52:07.712
In my opinion, this is exactly how the Government has been tackling 

701
00:52:07.712 --> 00:52:09.763
the tasks facing the country.

702
00:52:09.763 --> 00:52:14.525
We will do our utmost to live up to the trust placed in us.

703
00:52:16.105 --> 00:52:16.542
Thank you.

704
00:52:16.542 --> 00:52:20.057
Mr President, I beg your pardon, but Mr Pegorier, who, as you said,

705
00:52:20.057 --> 00:52:21.825
is speaking on behalf of the French people,

706
00:52:21.825 --> 00:52:23.479
asked to make a clarification.

707
00:52:23.479 --> 00:52:29.949
He wanted to ask what message he can take to French investors.

708
00:52:29.949 --> 00:52:33.895
You know, nothing has changed in our relations with France 

709
00:52:33.895 --> 00:52:39.645
and the French people, or with French investors.

710
00:52:39.645 --> 00:52:46.266
The matter here is that my press secretary said that we cancelled 

711
00:52:46.266 --> 00:52:50.005
[the visit to France] so as to be in a stronger position,

712
00:52:50.005 --> 00:52:52.148
it seems. But in reality, we did not cancel this visit.

713
00:52:52.148 --> 00:53:00.993
All that happened was that the French officials made it clear that this 

714
00:53:00.993 --> 00:53:04.862
was not the best time for the cultural centre’s official opening 

715
00:53:04.862 --> 00:53:09.039
and for discussing all these humanitarian issues.

716
00:53:09.039 --> 00:53:10.962
They suggested postponing these plans to a later date,

717
00:53:10.962 --> 00:53:11.657
and we agreed with this idea.

718
00:53:11.657 --> 00:53:13.770
We never tried to impose this visit in the first place.

719
00:53:13.770 --> 00:53:15.669
I said many times to our partners that if this is not 

720
00:53:15.669 --> 00:53:17.573
the best time, we can postpone it.

721
00:53:17.573 --> 00:53:19.822
It was the French who kept saying that there was no problem 

722
00:53:19.822 --> 00:53:22.197
and the visit should go ahead. We were ready to go with that.

723
00:53:22.197 --> 00:53:23.558
And then they said that no, this was not the best time.

724
00:53:23.558 --> 00:53:25.057
Alright, so let’s postpone it then.

725
00:53:25.057 --> 00:53:27.676
But this has not changed anything in our relations with France,

726
00:53:27.676 --> 00:53:31.023
the French people and French business.

727
00:53:31.023 --> 00:53:34.407
I hope that nothing serious will happen in our relations with 

728
00:53:34.407 --> 00:53:39.301
the French authorities and with our partners at the political level.

729
00:53:39.301 --> 00:53:42.051
I have very good personal relations with President Hollande 

730
00:53:42.051 --> 00:53:43.276
and I value these relations.

731
00:53:43.276 --> 00:53:47.822
I hope that this will help us to overcome any current difficulties.

732
00:53:47.822 --> 00:53:48.432
Thank you.

733
00:53:48.432 --> 00:53:50.122
Are there any more questions?

734
00:53:50.122 --> 00:53:51.506
Do we still have time?

735
00:53:55.246 --> 00:54:02.174
Time? There’s never enough time,

736
00:54:02.174 --> 00:54:09.834
but if you still have questions…let’s try to take the last few.

737
00:54:15.094 --> 00:54:16.560
Thank you.

738
00:54:16.560 --> 00:54:18.209
Alexander Branis.

739
00:54:18.209 --> 00:54:20.258
Hello, Mr President.

740
00:54:20.258 --> 00:54:25.013
I want to get away from international politics and come back to local 

741
00:54:25.013 --> 00:54:29.431
matters, in particular, reform of state-owned enterprises and raising 

742
00:54:29.431 --> 00:54:32.248
management quality, subjects you have spoken about.

743
00:54:32.248 --> 00:54:36.612
We see that many Russian state-owned companies have been very 

744
00:54:36.612 --> 00:54:41.829
successful, Rosneft, Alrosa, and Aeroflot,

745
00:54:41.829 --> 00:54:45.412
for example. Our portfolio now contains a record share of investment 

746
00:54:45.412 --> 00:54:47.388
in state-owned companies – 40 percent,

747
00:54:47.388 --> 00:54:49.756
because we see big opportunities ahead for these companies.

748
00:54:49.756 --> 00:54:54.389
We see that you and the Government continue to attract 

749
00:54:54.389 --> 00:54:57.508
qualified managers. You have done so in the past and continue now,

750
00:54:57.508 --> 00:55:00.265
to Russian Railways, RusHydro, and VEB, for example.

751
00:55:00.265 --> 00:55:06.920
In this respect, I have a question regarding one of the gas companies.

752
00:55:06.920 --> 00:55:10.705
You know, I compared the financial results for the first half 

753
00:55:10.705 --> 00:55:15.922
of the year with the results from 11 years ago,

754
00:55:15.922 --> 00:55:19.873
in 2005. What is interesting about this comparison? It shows that gas 

755
00:55:19.873 --> 00:55:27.537
prices and export volumes sold abroad were practically 

756
00:55:27.537 --> 00:55:31.555
the same in 2005 and in 2016.

757
00:55:31.555 --> 00:55:35.719
Gazprom has worked well with the regulator.

758
00:55:35.719 --> 00:55:39.295
In Russia, they sell gas at a cost four times more expensive in rubles 

759
00:55:39.295 --> 00:55:41.260
than they did back then, but in dollars,

760
00:55:41.260 --> 00:55:45.681
despite the ruble’s devaluation, this is 1.5 times higher.

761
00:55:45.681 --> 00:55:47.907
Could you make your question shorter?

762
00:55:47.907 --> 00:55:49.518
This is not a question but a whole speech,

763
00:55:49.518 --> 00:55:50.973
but we are listening with attention. What you say is interesting.

764
00:55:50.973 --> 00:55:56.264
Thank you. I have already got to the middle of my question and will 

765
00:55:56.264 --> 00:55:59.519
come to the question itself soon.

766
00:55:59.519 --> 00:56:04.490
Sadly, operating profit is 40 percent lower than it was 11 years ago.

767
00:56:04.490 --> 00:56:08.052
This is due to the fact that costs have increased rapidly.

768
00:56:08.052 --> 00:56:10.624
Perhaps this is not the biggest problem though.

769
00:56:10.624 --> 00:56:14.562
The biggest problem is that we sometimes get the impression that 

770
00:56:14.562 --> 00:56:17.476
the company works not for its shareholders,

771
00:56:17.476 --> 00:56:21.023
not for the consumers or for the state, but for the subcontractors,

772
00:56:21.023 --> 00:56:23.556
who build various facilities for them.

773
00:56:23.556 --> 00:56:28.072
Over these 11 years, they have invested $200 billion.

774
00:56:28.072 --> 00:56:29.775
This is a big amount of money.

775
00:56:29.775 --> 00:56:33.167
It has gone into expanding pipelines and developing new fields.

776
00:56:33.167 --> 00:56:36.545
This is not counting the $80 billion spent simply 

777
00:56:36.545 --> 00:56:38.603
on maintaining capacity.

778
00:56:38.603 --> 00:56:40.729
We see that no more than 60–65 percent of all of this 

779
00:56:40.729 --> 00:56:43.911
capacity is actually being used now.

780
00:56:43.911 --> 00:56:51.769
In this context, I wanted to ask you to share your thoughts on these 

781
00:56:51.769 --> 00:56:55.614
results of Gazprom’s activity and the strategy it has 

782
00:56:55.614 --> 00:56:59.834
pursued over these years.

783
00:56:59.834 --> 00:57:01.604
Thank you very much.

784
00:57:01.604 --> 00:57:07.048
This is really a very serious matter as it concerns the effectiveness 

785
00:57:07.048 --> 00:57:09.394
of a company in which the state has a stake.

786
00:57:09.394 --> 00:57:11.413
These are not state-owned enterprises,

787
00:57:11.413 --> 00:57:15.543
but companies in which the state either has a controlling or other 

788
00:57:15.543 --> 00:57:18.703
stake. They are joint-stock companies, however,

789
00:57:18.703 --> 00:57:20.657
companies with a significant share of private capital,

790
00:57:20.657 --> 00:57:22.746
including foreign capital.

791
00:57:22.746 --> 00:57:24.846
They have to work on the market,

792
00:57:24.846 --> 00:57:28.685
and this concerns the banking sector too,

793
00:57:28.685 --> 00:57:33.175
without signals and management from the state authorities.

794
00:57:33.175 --> 00:57:35.251
This is the way things work in practice.

795
00:57:35.251 --> 00:57:39.712
It is primarily for the expert community and the state representatives 

796
00:57:39.712 --> 00:57:43.295
on the company boards to evaluate the effectiveness of their work 

797
00:57:43.295 --> 00:57:50.400
and the expediency of their investments when the market is down 

798
00:57:50.400 --> 00:57:54.021
as concerns infrastructure expansion and production.

799
00:57:54.021 --> 00:58:00.457
I want to inform you that I plan to meet with officials from our 

800
00:58:00.457 --> 00:58:02.784
biggest companies with state participation,

801
00:58:02.784 --> 00:58:07.427
and I will ask the Government and the Presidential Executive Office 

802
00:58:07.427 --> 00:58:13.576
to prepare the relevant information and an analysis of what has been 

803
00:58:13.576 --> 00:58:18.003
done over this time, including this year.

804
00:58:18.003 --> 00:58:22.996
We will then assess the effectiveness of the different 

805
00:58:22.996 --> 00:58:24.607
companies with state participation.

806
00:58:24.607 --> 00:58:30.371
As for development strategy, rather than saying that the company is 

807
00:58:30.371 --> 00:58:32.436
working for its subcontractors,

808
00:58:32.436 --> 00:58:36.732
we should be asking ourselves if it is making the right choices 

809
00:58:36.732 --> 00:58:43.448
by expanding gas production and infrastructure facilities now,

810
00:58:43.448 --> 00:58:45.320
when the market is down, or whether it would do better to wait.

811
00:58:45.320 --> 00:58:48.528
I was in Turkey just recently.

812
00:58:48.528 --> 00:58:54.037
I spoke there and said that after the fall in oil prices,

813
00:58:54.057 --> 00:59:02.202
investment in production has dropped to its lowest level 

814
00:59:02.202 --> 00:59:07.462
in the last 70 years. This is a big danger for global energy.

815
00:59:07.462 --> 00:59:10.559
In this sense, our companies’ activity,

816
00:59:10.559 --> 00:59:24.311
which takes the line that the downward price trend will end sooner 

817
00:59:24.311 --> 00:59:26.664
or later, looks justified in my view.

818
00:59:26.664 --> 00:59:27.868
But we need to examine the figures to see just how much 

819
00:59:27.868 --> 00:59:29.469
this is indeed the case.

820
00:59:31.229 --> 00:59:36.874
As you know, in Turkey, we reached an agreement with our Turkish 

821
00:59:36.874 --> 00:59:40.222
partners on building a new pipeline system.

822
00:59:40.222 --> 00:59:46.582
This is being done not simply to build a pipeline and bury it 

823
00:59:46.582 --> 00:59:52.731
in the Black Sea, but as an additional access route to a promising part 

824
00:59:52.731 --> 00:59:54.466
of the European market.

825
00:59:54.466 --> 00:59:59.670
Our European partners have an interest in this and they 

826
00:59:59.670 --> 01:00:04.948
tell us this directly. We have assured sales markets,

827
01:00:04.948 --> 01:00:06.797
in other words. Otherwise it would make no sense 

828
01:00:06.797 --> 01:00:08.680
to undertake these projects.

829
01:00:08.680 --> 01:00:12.847
There is also the construction of the Power of Siberia 

830
01:00:12.847 --> 01:00:14.320
project, for example.

831
01:00:14.320 --> 01:00:16.798
Yes, this calls for big investments,

832
01:00:16.798 --> 01:00:19.175
but it will take us to the huge and growing Chinese market.

833
01:00:19.175 --> 01:00:22.739
China’s growth rates have slowed down a little,

834
01:00:22.739 --> 01:00:26.020
but it still has the highest growth rates in the world.

835
01:00:26.020 --> 01:00:29.028
The Chinese economy is growing and we know that it needs 

836
01:00:29.028 --> 01:00:32.980
energy resources. This is work for the future,

837
01:00:32.980 --> 01:00:39.682
for the long term. If we are running too far ahead somewhere,

838
01:00:39.682 --> 01:00:42.469
adjustments can be made, but I do not see evidence of this for now.

839
01:00:45.029 --> 01:00:46.461
Please, go ahead.

840
01:00:46.461 --> 01:00:49.586
Thank you, Mr President.

841
01:00:49.586 --> 01:00:53.057
Anastasia Levashova from Blackfriars Fund, London.

842
01:00:53.057 --> 01:00:55.883
I wanted to come back to the issue of economic sanctions.

843
01:00:55.883 --> 01:00:58.644
This is a key issue, after all,

844
01:00:58.644 --> 01:01:02.996
for the investment climate and for the economy.

845
01:01:02.996 --> 01:01:07.404
The sanctions were initially tied to the Ukraine crisis 

846
01:01:07.404 --> 01:01:11.528
and implementation of the Minsk Agreements.

847
01:01:11.528 --> 01:01:14.728
They have not succeeded in fully isolating the Russian economy,

848
01:01:14.728 --> 01:01:17.368
but they have nonetheless made their impact felt.

849
01:01:17.368 --> 01:01:22.874
Now there are calls for sanctions linked to Syria.

850
01:01:22.894 --> 01:01:26.118
How much sense would this make,

851
01:01:26.118 --> 01:01:30.915
in your view? How long will these sanctions last in the current form,

852
01:01:30.915 --> 01:01:34.923
and what place do they have on your agenda?

853
01:01:34.923 --> 01:01:39.848
We made our position known long ago and I think it is very clear and is 

854
01:01:39.848 --> 01:01:45.436
confirmed not only by our own experts but by international experts too,

855
01:01:45.436 --> 01:01:48.769
people in Europe and North America.

856
01:01:48.769 --> 01:01:53.371
Our position is that any restrictions in the economy taken 

857
01:01:53.371 --> 01:01:57.055
for political motivations are harmful to everyone.

858
01:01:57.055 --> 01:02:00.263
As for isolation, they do not have the engine power and petrol enough 

859
01:02:00.263 --> 01:02:02.243
to bypass all our borders.

860
01:02:02.243 --> 01:02:04.257
What kind of isolation can we speak of for a country like 

861
01:02:04.257 --> 01:02:10.688
Russia? This is simply not possible.

862
01:02:10.688 --> 01:02:14.445
What is this about? It is an instrument of pressure.

863
01:02:14.445 --> 01:02:16.546
We think that this is very harmful.

864
01:02:16.546 --> 01:02:19.933
We should take not the road of pressure and blackmail,

865
01:02:19.933 --> 01:02:21.960
but the road of finding compromises.

866
01:02:21.960 --> 01:02:24.733
I have said on countless occasions that we are ready 

867
01:02:24.733 --> 01:02:25.916
to look for compromises.

868
01:02:25.916 --> 01:02:29.106
We would like very much for our partners to take this approach with us.

869
01:02:29.106 --> 01:02:32.630
The main thing to keep in mind here though,

870
01:02:32.630 --> 01:02:34.770
the principle that we ourselves must remember, above all,

871
01:02:34.770 --> 01:02:38.458
is that if we were ever to give in to blackmail of this sort,

872
01:02:38.458 --> 01:02:41.780
we would ultimately lose out economically too because we would end up 

873
01:02:41.780 --> 01:02:45.409
becoming someone’s economic appendage.

874
01:02:45.409 --> 01:02:48.676
Russia will never allow this to happen because it would 

875
01:02:48.676 --> 01:02:50.061
never survive this.

876
01:02:59.821 --> 01:03:04.109
Hello. Niall Paul from TT International.

877
01:03:04.109 --> 01:03:09.391
The question I would like to ask is around infrastructure priorities 

878
01:03:09.391 --> 01:03:11.413
for Russian investment.

879
01:03:11.413 --> 01:03:17.504
Like many governments, Russia has highlighted infrastructure as an area 

880
01:03:17.504 --> 01:03:18.768
to de-bottleneck growth.

881
01:03:18.768 --> 01:03:23.667
What are the one or two priority areas for this investment 

882
01:03:23.667 --> 01:03:25.208
and how can it be facilitated?

883
01:03:25.208 --> 01:03:29.059
Investment here, in the Russian economy?

884
01:03:32.759 --> 01:03:35.028
Yes, in the Russian economy.

885
01:03:35.028 --> 01:03:39.218
The high-tech sectors would be the main area,

886
01:03:39.218 --> 01:03:44.232
complete with technology transfers and human resources training.

887
01:03:51.712 --> 01:03:56.931
Mr President, thank you very much for your detailed presentation 

888
01:03:56.931 --> 01:03:58.159
and your direct responses.

889
01:03:58.159 --> 01:04:01.482
My name is Claire Husson-Citanna,

890
01:04:01.482 --> 01:04:02.899
I’m a fixed income portfolio manager for Wellington 

891
01:04:02.899 --> 01:04:03.645
Investment Management.

892
01:04:03.645 --> 01:04:08.692
I’m here with two of my colleagues thanks to VTB.

893
01:04:08.692 --> 01:04:12.006
Our firm provides global investment solutions for institutional 

894
01:04:12.006 --> 01:04:18.661
investors in more than 55 countries with about 970 billion in global 

895
01:04:18.661 --> 01:04:19.673
assets under management.

896
01:04:19.673 --> 01:04:26.200
My question actually concerns those outbound infrastructure FDIs.

897
01:04:26.200 --> 01:04:29.213
As you pointed out, there are new international and financial 

898
01:04:29.213 --> 01:04:33.986
institutions, such as BRICS or the Asian Investment Bank of China,

899
01:04:33.986 --> 01:04:36.728
that the emerging markets have established.

900
01:04:36.728 --> 01:04:41.503
So from your perspective are these new international financial 

901
01:04:41.503 --> 01:04:47.937
institutions competing alternatives to the Bretton Woods institutions 

902
01:04:47.937 --> 01:04:50.295
or are they an organic enhancement of the existing international 

903
01:04:50.295 --> 01:04:56.780
financial architecture? And where do you see Russia in international 

904
01:04:56.780 --> 01:04:58.818
development financing in five years from now?

905
01:04:58.818 --> 01:05:03.726
There is always room for healthy economic competition on the market,

906
01:05:03.726 --> 01:05:08.473
but this should not be competition of the sort that 

907
01:05:08.473 --> 01:05:12.279
destroys or replaces something.

908
01:05:12.279 --> 01:05:16.605
Rather, it should be about creating new institutions that fit 

909
01:05:16.605 --> 01:05:23.952
organically into the already existing and functioning international 

910
01:05:23.952 --> 01:05:28.638
financial and investment systems,

911
01:05:28.638 --> 01:05:32.041
which work quite successfully, though not without glitches.

912
01:05:32.041 --> 01:05:37.194
We know and debate often the question of how the IMF should develop 

913
01:05:37.194 --> 01:05:42.042
and whether international financial institutions can act 

914
01:05:42.042 --> 01:05:46.603
in the interests of someone’s political ambitions or follow someone’s 

915
01:05:46.603 --> 01:05:48.429
orders in violation of its own rules,

916
01:05:48.429 --> 01:05:50.429
which would undermine trust in these institutions.

917
01:05:50.429 --> 01:05:53.520
But these are minor questions really.

918
01:05:53.520 --> 01:05:59.398
Overall, the new financial organisations have a mission to become 

919
01:05:59.398 --> 01:06:02.939
an organic part of what has already been created and to work 

920
01:06:02.939 --> 01:06:11.090
in specific areas, above all in areas that will ensure the economic 

921
01:06:11.090 --> 01:06:14.939
interests and growth of the countries participating 

922
01:06:14.939 --> 01:06:17.876
in these groups, in particular the BRICS group.

923
01:06:17.876 --> 01:06:28.232
For your information, let me stress that maintaining the current growth 

924
01:06:28.232 --> 01:06:31.925
and development rates alone, the BRICS countries need from 

925
01:06:31.925 --> 01:06:37.285
around $800 billion to $1.2 trillion.

926
01:06:37.305 --> 01:06:41.253
The current institutions are not in a position to cope with 

927
01:06:41.253 --> 01:06:42.767
demand of this level.

928
01:06:42.767 --> 01:06:48.239
The new institutions are being created above all to address these 

929
01:06:48.239 --> 01:06:52.667
needs. This does not mean that they will focus only on their own 

930
01:06:52.667 --> 01:06:55.524
interests in work between countries.

931
01:06:55.524 --> 01:06:59.651
We could, for example, within the BRICS system,

932
01:06:59.651 --> 01:07:03.993
plan to work with our colleagues on the African continent and so on.

933
01:07:08.993 --> 01:07:16.634
Good afternoon, Mr President. I’m Michael Renaud from Capital in Iowa.

934
01:07:16.634 --> 01:07:19.264
Thank you for the opportunity to speak to you today.

935
01:07:19.264 --> 01:07:23.038
I’d like to go back to the economy again,

936
01:07:23.038 --> 01:07:25.541
and specifically SOEs and efficiency.

937
01:07:25.541 --> 01:07:31.621
Thee years ago you launched a programme for the long-term development 

938
01:07:31.621 --> 01:07:33.311
of the state-owned enterprises.

939
01:07:33.311 --> 01:07:35.137
The question is: how are they doing, how can you monitor that,

940
01:07:35.137 --> 01:07:38.648
and how can you as the government ensure efficiency? And to joke a bit,

941
01:07:38.648 --> 01:07:42.016
would, like Mr Trump, you just announce that people are fired? How can 

942
01:07:42.016 --> 01:07:43.392
you actually get that efficiency going? And I’m joking 

943
01:07:43.392 --> 01:07:44.170
about that. Thank you.

944
01:07:44.170 --> 01:07:45.750
Hold on a moment, can you repeat your question? I want 

945
01:07:45.750 --> 01:07:47.754
to make sure I understand.

946
01:07:52.234 --> 01:07:58.050
Could you repeat the main part of your question, please?

947
01:07:58.050 --> 01:08:03.447
The question was, how do you ensure efficiency in the programme 

948
01:08:03.447 --> 01:08:11.190
for the long-term growth of the state-owned enterprises in Russia,

949
01:08:11.190 --> 01:08:16.477
which you announced in 2013? And the question is how are the SOEs 

950
01:08:16.477 --> 01:08:21.482
doing, how do you measure that, and how do you ensure efficiency,

951
01:08:21.482 --> 01:08:26.177
especially without more active participation of the private sector?

952
01:08:26.177 --> 01:08:30.245
First of all, the private sector does participate and is 

953
01:08:30.245 --> 01:08:32.313
set to play an even bigger part.

954
01:08:32.313 --> 01:08:40.654
One of the tasks facing our big companies with state participation is 

955
01:08:40.654 --> 01:08:46.843
to distribute orders related to their main activities among small 

956
01:08:46.843 --> 01:08:49.325
businesses and private companies.

957
01:08:49.325 --> 01:08:53.853
We have made considerable progress in this area over the last year.

958
01:08:53.853 --> 01:08:59.213
The number of orders that big Russian corporations are placing with 

959
01:08:59.213 --> 01:09:02.242
small and medium-sized businesses has grown substantially.

960
01:09:02.242 --> 01:09:06.546
This is an important factor for the Russian economy’s internal growth.

961
01:09:06.546 --> 01:09:13.165
As for how we will go about improving their work,

962
01:09:13.165 --> 01:09:19.723
there is an instrument here that is no different from what other 

963
01:09:19.723 --> 01:09:22.026
countries around the world use –

964
01:09:22.026 --> 01:09:25.495
participation of state representatives on the management boards.

965
01:09:25.495 --> 01:09:29.953
But here, as in the case with Gazprom, for example,

966
01:09:29.953 --> 01:09:36.849
we never intervene directly in the companies’ day-to-day management 

967
01:09:36.849 --> 01:09:40.488
and we give them the chance and the right to work as equals 

968
01:09:40.488 --> 01:09:42.893
with all other market players.

969
01:09:47.793 --> 01:09:53.369
Mr President, I represent a Chinese high-tech company.

970
01:09:53.369 --> 01:09:55.117
Listening to the many questions,

971
01:09:55.117 --> 01:09:59.546
we realise that there are many people around the world who, sadly,

972
01:09:59.546 --> 01:10:01.937
do not respect or support the Voice of Russia and do not 

973
01:10:01.937 --> 01:10:03.436
understand its position.

974
01:10:03.436 --> 01:10:06.387
At the same time, as a Chinese company,

975
01:10:06.387 --> 01:10:11.258
we support and sponsor Voice of Russia’s television programme.

976
01:10:11.258 --> 01:10:15.488
The matter now is that at the St Petersburg International Economic 

977
01:10:15.488 --> 01:10:24.070
Forum, we announced that we plan to invest from $500 million to $1 

978
01:10:24.070 --> 01:10:26.442
billion in the Russian economy next year,

979
01:10:26.442 --> 01:10:30.323
in online movie theatres and video content components.

980
01:10:30.323 --> 01:10:37.988
Unfortunately, we have heard of late that there is a tendency to limit 

981
01:10:37.988 --> 01:10:41.313
foreign capital in this market segment.

982
01:10:41.313 --> 01:10:49.510
My question is about your position regarding creating opportunities 

983
01:10:49.510 --> 01:10:54.295
for Russian-Chinese cultural exchanges as opposed to Anglo-Saxon 

984
01:10:54.295 --> 01:10:57.434
culture. We can be of help.

985
01:10:57.434 --> 01:11:03.160
We see great potential and success for Russian cartoons and films,

986
01:11:03.160 --> 01:11:04.494
for example, Ekipazh (Flight Crew)

987
01:11:04.494 --> 01:11:06.035
and other films were successful on the Chinese market.

988
01:11:06.035 --> 01:11:11.422
We would like to see such opportunities for working here in Russia.

989
01:11:11.422 --> 01:11:12.451
Thank you very much.

990
01:11:12.451 --> 01:11:17.484
Regarding Anglo-Saxon, Russian or Chinese culture… yes,

991
01:11:17.484 --> 01:11:19.153
of course this is something we can discuss,

992
01:11:19.153 --> 01:11:23.054
but we are all part of global culture.

993
01:11:23.054 --> 01:11:27.857
It is not possible to imagine global culture without China’s great 

994
01:11:27.857 --> 01:11:31.129
culture and its thousands of years of history.

995
01:11:31.129 --> 01:11:35.140
The Chinese people’s achievements laid the foundations 

996
01:11:35.140 --> 01:11:38.957
for whole layers of global culture.

997
01:11:38.957 --> 01:11:43.577
Even if some do not realise this, but it is the case.

998
01:11:43.577 --> 01:11:49.689
Of course, each people and culture have their own great uniqueness.

999
01:11:49.689 --> 01:11:53.061
Humanity’s future, without question,

1000
01:11:53.061 --> 01:11:59.859
lies in exchanging these different cultures’ achievements and mutually 

1001
01:11:59.859 --> 01:12:03.586
complementing each other.

1002
01:12:03.586 --> 01:12:05.696
We place great importance on this,

1003
01:12:05.696 --> 01:12:09.491
including with regard to our Chinese friends. We are neighbours.

1004
01:12:09.491 --> 01:12:11.475
We cannot choose our neighbours and this is a good thing.

1005
01:12:11.475 --> 01:12:15.322
Over these last decades, we have developed quite unique 

1006
01:12:15.322 --> 01:12:18.180
relations of trust and mutual support.

1007
01:12:18.180 --> 01:12:21.407
As for the specific market segment you mentioned,

1008
01:12:21.407 --> 01:12:24.268
we will certainly support the efforts of our partners –

1009
01:12:24.268 --> 01:12:27.602
Chinese, European, and American –

1010
01:12:27.602 --> 01:12:34.292
but keeping in mind this idea of uniqueness that enables us to preserve 

1011
01:12:34.292 --> 01:12:35.671
our national cultural identity.

1012
01:12:35.671 --> 01:12:38.535
We do have to make efforts of one kind or another to support our own 

1013
01:12:38.535 --> 01:12:42.017
producers and our national content.

1014
01:12:42.017 --> 01:12:47.648
But we must be careful, of course, in the way we do this.

1015
01:12:47.648 --> 01:12:52.217
We particularly welcome our potential investors’ financial activities 

1016
01:12:52.217 --> 01:13:01.224
if it will involve national content.

1017
01:13:01.224 --> 01:13:02.767
This is something very important to us.

1018
01:13:02.767 --> 01:13:09.180
Let’s then discuss all of these matters in a practical light.

1019
01:13:09.180 --> 01:13:13.306
We are ready to find the most liberal and acceptable 

1020
01:13:13.306 --> 01:13:15.262
decisions for our partners.

1021
01:13:20.082 --> 01:13:25.545
Thank you very much for this opportunity.

1022
01:13:25.545 --> 01:13:28.491
Mr President, I’m Garry Barnes from PGGM Investments.

1023
01:13:28.491 --> 01:13:32.250
I’ll keep this question brief and economic-orientate.

1024
01:13:32.250 --> 01:13:35.060
I’d like to ask a question with regards to the privatisation programme 

1025
01:13:35.060 --> 01:13:40.105
of the government and in particular Bashneft.

1026
01:13:40.105 --> 01:13:44.528
Some of us in the investment community were somewhat surprised 

1027
01:13:44.528 --> 01:13:48.546
by the fact that the government decided to defer 

1028
01:13:48.546 --> 01:13:51.652
the divestment of the government stake.

1029
01:13:51.652 --> 01:13:57.674
And then also, in fact, Rosneft was allowed to bid on the stake.

1030
01:13:57.674 --> 01:14:01.755
Was this a surprise to you too and what are your thoughts on this?

1031
01:14:01.755 --> 01:14:05.284
You know, this might sound strange,

1032
01:14:05.284 --> 01:14:09.872
but I myself was somewhat surprised by the Government’s position.

1033
01:14:09.872 --> 01:14:13.699
This is the Russian Federation Government’s position though, above all,

1034
01:14:13.699 --> 01:14:17.651
the position taken by its financial and economic officials.

1035
01:14:17.651 --> 01:14:20.546
It is dictated by the following considerations.

1036
01:14:20.546 --> 01:14:24.244
First, Rosneft, as I already said,

1037
01:14:24.244 --> 01:14:28.742
like many other big companies with state participation,

1038
01:14:28.742 --> 01:14:31.786
is not a state-owned company, strictly speaking.

1039
01:14:31.786 --> 01:14:36.511
It is a company in which the state holds a controlling stake,

1040
01:14:36.511 --> 01:14:42.156
but in which foreign investors also hold a considerable 

1041
01:14:42.156 --> 01:14:46.565
stake, in particular, British Petroleum.

1042
01:14:46.565 --> 01:14:57.681
Second, Rosneft made the highest bid. I know the offer now.

1043
01:14:57.681 --> 01:15:03.934
I don’t know, should I give the figure? I can? It is 330 billion 

1044
01:15:03.934 --> 01:15:10.625
rubles. This is a bit higher than the valuation made by independent 

1045
01:15:10.625 --> 01:15:12.095
international experts.

1046
01:15:12.095 --> 01:15:16.513
In other words, they are offering more than the market price.

1047
01:15:16.513 --> 01:15:22.991
Next. Why is Rosneft able to do this and do the state representatives 

1048
01:15:22.991 --> 01:15:27.844
in the company not consider this decision detrimental for their company 

1049
01:15:27.844 --> 01:15:32.033
itself? The reason for this is that Bashneft’s acquisition 

1050
01:15:32.033 --> 01:15:36.889
and the subsequent sale of a large stake –

1051
01:15:36.889 --> 01:15:41.362
19.5 percent – in Rosneft itself will produce a synergy effect.

1052
01:15:41.362 --> 01:15:43.674
In other words, the value of this 19.

1053
01:15:43.694 --> 01:15:48.599
5-percent stake in Rosneft will increase considerably.

1054
01:15:48.599 --> 01:15:54.529
Rosneft will thus be able to not only recoup the costs of the small 

1055
01:15:54.529 --> 01:15:58.486
premium it gives the state in acquiring Bashneft,

1056
01:15:58.486 --> 01:16:02.327
but will be able to sell its own stake at a good price.

1057
01:16:02.327 --> 01:16:06.622
The next circumstance is that the Rosneft stake’s sale will take place 

1058
01:16:06.622 --> 01:16:09.458
through the company Rosneftegaz and,

1059
01:16:09.458 --> 01:16:15.044
in accordance with all the rules and laws,

1060
01:16:15.044 --> 01:16:17.951
the money from this company will come directly into the national 

1061
01:16:17.951 --> 01:16:20.231
budget, which, from the Finance Ministry’s point of view,

1062
01:16:20.231 --> 01:16:25.788
is very good for budget planning.

1063
01:16:25.788 --> 01:16:30.350
Finally, and perhaps most important,

1064
01:16:30.350 --> 01:16:39.067
we are not ending the privatisation process here.

1065
01:16:39.067 --> 01:16:42.790
We are saying that this considerable 19.

1066
01:16:42.790 --> 01:16:46.426
5-percent stake in Rosneft should be privatised,

1067
01:16:46.426 --> 01:16:51.705
and private investors and perhaps even foreign investors can take part.

1068
01:16:51.705 --> 01:16:54.195
Is this not privatisation? It is,

1069
01:16:54.195 --> 01:16:58.823
but it is carefully conducted privatisation that pursues a synergy 

1070
01:16:58.823 --> 01:17:05.583
effect and maximum advantage in terms of the budget’s interests.

1071
01:17:05.583 --> 01:17:16.443
We are not indifferent to the position of Bashkortostan, our partner,

1072
01:17:16.443 --> 01:17:17.927
the federal government’s partner,

1073
01:17:17.927 --> 01:17:21.924
which holds a significant stake.

1074
01:17:21.924 --> 01:17:26.584
The Republic of Bashkortostan has appealed directly to us with 

1075
01:17:26.584 --> 01:17:28.748
a request to maintain their influence in the company’s 

1076
01:17:28.748 --> 01:17:33.469
management with this stake. The proposed structure makes this possible.

1077
01:17:33.469 --> 01:17:39.376
It was a combination of all of these factors that motivated 

1078
01:17:39.376 --> 01:17:40.870
the Government to make the decision it did.

1079
01:17:40.870 --> 01:17:47.484
We know the proposals other companies have made and we will 

1080
01:17:47.484 --> 01:17:52.485
support their efforts. These companies include LUKOIL and others.

1081
01:17:52.485 --> 01:17:59.401
They work effectively and are eminently worthy to acquire 

1082
01:17:59.401 --> 01:18:04.472
a stake in Bashneft. But I think it rather improbable that they would 

1083
01:18:04.472 --> 01:18:06.800
be able to acquire Bashneft and a 19.

1084
01:18:06.800 --> 01:18:14.802
5-percent in Rosneft, especially at what is quite a high price.

1085
01:18:14.802 --> 01:18:18.877
We will support all of our companies, if not in this particular deal,

1086
01:18:18.877 --> 01:18:22.782
then in other areas, and give them the conditions they need to work 

1087
01:18:22.782 --> 01:18:25.587
effectively on the Russian and international markets and raise their 

1088
01:18:25.587 --> 01:18:28.341
capitalisation, including by granting them licenses 

1089
01:18:28.341 --> 01:18:30.176
to expand their activities.

1090
01:18:30.176 --> 01:18:33.718
Mr President, VTB Bank was a consultant for the Government on this 

1091
01:18:33.718 --> 01:18:37.718
deal. We share this view in full and think it is absolutely right.

1092
01:18:37.718 --> 01:18:38.214
There we go then.

1093
01:18:38.214 --> 01:18:40.978
Companies must have equal rights,

1094
01:18:40.978 --> 01:18:42.669
no matter whether they have state participation or not.

1095
01:18:42.669 --> 01:18:45.763
We all work in the same legal framework and in this sense,

1096
01:18:45.763 --> 01:18:50.494
whoever offers the highest price is the one who wins the bid.

1097
01:18:53.614 --> 01:18:59.681
Elena Lovén, portfolio manager for Swedbank Robur.

1098
01:18:59.681 --> 01:19:02.090
Our total investment in Russia and Eastern Europe now comes 

1099
01:19:02.090 --> 01:19:04.420
to around 1 billion euros.

1100
01:19:04.420 --> 01:19:08.719
My question concerns Russia’s energy policy.

1101
01:19:08.719 --> 01:19:10.314
We have heard a lot about this today.

1102
01:19:10.314 --> 01:19:17.188
I just want to clarify, in terms of Russia’s role on the hydrocarbons 

1103
01:19:17.188 --> 01:19:23.520
market and as a global player in terms of production and resources.

1104
01:19:23.520 --> 01:19:29.103
Mr President, what is in Russia’s best interests now,

1105
01:19:29.103 --> 01:19:32.776
to increase production, leave it at the current level,

1106
01:19:32.776 --> 01:19:39.268
or perhaps lower it, given that the oil price paradigm has changed?

1107
01:19:39.268 --> 01:19:42.998
It is in the interests of the Russian economy and energy sector,

1108
01:19:42.998 --> 01:19:45.671
and indeed of the global economy,

1109
01:19:45.671 --> 01:19:47.931
to freeze production at the current level.

1110
01:19:47.931 --> 01:19:52.927
By and large, we could even consider a reduction,

1111
01:19:52.927 --> 01:19:56.317
but there is not any real need for this.

1112
01:19:56.317 --> 01:20:02.979
If the OPEC countries can agree among themselves on freezing production 

1113
01:20:02.979 --> 01:20:04.913
levels, we will join them in this decision.

1114
01:20:04.913 --> 01:20:09.297
The only problem right now is with agreements between particular 

1115
01:20:09.297 --> 01:20:12.704
countries, between Iran and Saudi Arabia –

1116
01:20:12.704 --> 01:20:17.179
there is no secret here. Their positions have become much closer.

1117
01:20:17.179 --> 01:20:22.662
The matter under discussion is Iran’s pre-crisis production 

1118
01:20:22.662 --> 01:20:24.613
level, which was 4,2 million.

1119
01:20:24.613 --> 01:20:26.983
The figure proposed now is 3.

1120
01:20:26.983 --> 01:20:30.088
9 million, not a significant drop, a decrease of 300,000 –

1121
01:20:30.088 --> 01:20:39.012
practically nothing. I do not see any problems in the way of reaching 

1122
01:20:39.012 --> 01:20:45.385
a final agreement on freezing production at the current level.

1123
01:20:45.385 --> 01:20:48.840
Thank you very much for your attention.