The meeting was attended by representatives of news agencies from France, Spain, the United States, Great Britain, Canada, Germany, China, Japan, India and Italy.
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President of Russia Vladimir Putin: Good afternoon, ladies and gentlemen,
I have delivered so many speeches today that I think I will skip any introductory remarks, as you have likely attended some of the events here and have already heard a great deal. There is no point in repeating things. If I have missed something and you have questions or want me to give additional comments or information, it will be my pleasure.
I just want to say that I'm happy to see so many of you here representing so many international news agencies. I will not mention how many publications are based on your news feeds every day, you know that better than myself. The importance of your work does not need spelling out. I hope you will continue to try to be as unbiased as possible in your Russia reporting.
That is all for the introduction. I will now answer your questions. Please, go ahead.
TASS Director General Sergei Mikhailov: Mr President, first of all, congratulations on the forum’s success. We all are certainly very impressed by your remarks and the remarks of your colleagues.
Thank you for allowing time in your very tight schedule to meet with the world’s major news agencies for the third year in a row. I believe about 90 percent of global information distribution is present.
As these meetings have already become a tradition, we have our conventions, one being that we give the floor to a woman first. We have only one woman at this table today, and I am happy to pass the floor to Alessandra Galloni, Global News Editor at Thomson Reuters. Please.
Alessandra Galloni: Thank you very much, and also thank you, I think, on behalf of all of us for hosting us after a busy day. Now we understand why there is lemon tea for the throat.
Today we are at the St Petersburg International Economic Forum, and today in your speech, you spoke about the effect of sanctions on Russia and on Europe. I would like to ask you a question on Russian economy. Recent figures show that capital investment by Russian companies in Russia fell 5 percent year-on-year in the first quarter and have been falling at least for the last eighteen months. This would seemingly have little to do with falling oil prices, and would suggest that Russian companies are not willing to invest in their own country. Does that not point to some structural problems that need to be tackled, and if so, how do you plan to tackle them? Thank you.
Vladimir Putin: Both. This does have something to do with oil prices because revenue from the oil industry and the energy industry in general are declining as a result of slumping oil prices, while substantial investment in recent years has been in oil, gas, energy and the related infrastructure. Therefore, there is a direct connection, no doubt.
Look at the investment programmes of our major energy companies. Do you think they can invest in expanding production as much as they planned before, now that demand is lower? This is why investment is decreasing. Certainly, this situation affects a country that is so dependent on the energy sector. Although you are correct in saying that this is not the only reason.
One of the key tasks of our economic policy is to diversify our economy. This has been on the agenda for years. I cannot say that we have been very successful, but we are getting there.
There is a Russian saying: if it were not for bad luck, there would be no luck at all. What do I mean by that? When revenue from the energy sector is declining, companies start looking for better opportunities to use capital in other areas – and they find them, much to our relief. Our job is to support this approach. We have and we will continue to create the most favourable conditions for a diversified economy, as I said.
Of course, we have seen some decline in investment, for the reasons I stated. This is not just a result of companies wishing or not wishing to invest. When an industry that used to be profitable is suddenly less so, they would rather not invest. I already said that. However, obviously, we need to create conditions for investment in other areas. Our focus now is on attracting more investment, both domestic and foreign.
Look, capital outflow has declined dramatically. I am not sure if I mentioned this today, but in my opinion, it did slow down to a trickle. It is about one-ninth of what it was – I would not want to mislead you, so you need to look up the figures. Please look them up to get the numbers straight. What does this mean? It means that the money remains in Russia because it has become more attractive here.
However, there are formal indicators as well. What do they say about further diversification? It is still slow, not as fast as we would like, but still: our exports decreased in absolute numbers, including equipment and technology products, but they have grown in terms of percentage. I mean the overall volume went down, but the export structure has improved, we have been seeing this trend for a few months.
By the way, we had projected a small recession at the end of this year, but we are actually seeing growth, 0.6 percent in the manufacturing industries, and 2.2 percent in agriculture, about 0.5 percent on average. Therefore, we have had some success, but we intend to continue to move along, toward further diversification and a greater inflow of investment.
We have developed a set of tools for this, including, for example, what we call priority development areas, as well as certain incentives and benefits relating to specific projects we consider a priority – primarily high-tech projects – an entire range of government policies we have prepared and backed with the appropriate resources. These policies stimulate the manufacture of high-tech products in Russia, but they also encourage domestic companies to research foreign markets and ensure that the products they make are competitive. We need to commercialise our scientific discoveries, the work of our technical researchers, primarily in the applied sciences.
Yet, when attracting foreign investment, like many countries, we insist on using as many local resources as possible. I have met with leading global manufacturers, our partners, today. We agreed, for example, that in one sector, as much as 70 percent of the product components would be manufactured domestically. Our partners generally agree with this, which indicates that this is adequately lucrative. So these are the projects we will tend to select, this is what we will focus on.
To be continued.