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This year’s forum, with the theme A Collective Reckoning of the New Global Economic Reality, is one of the biggest events since the start of the pandemic. Heads of state and government, heads of major Russian and international associations, companies and banks, leading experts and politicians are taking part in discussions at the SPIEF in person or via videoconference.

Federal Chancellor of the Republic of Austria Sebastian Kurz and Emir of the State of Qatar Tamim bin Hamad Al Thani attended the plenary session via videoconference. President of Argentina Alberto Fernandez and President of Brazil Jair Bolsonaro sent video messages to the participants.

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Stanislav Natanzon, plenary session moderator: Good afternoon, ladies and gentlemen.

I am happy to welcome you all at the St Petersburg International Economic Forum.

This is the first global event of this level that people are attending in person, or at least it is a ‘hybrid’ event, to use the new buzzword. In any case, it is good to see you again. I think we have quite a backlog of topics for discussion, and I really hope the conversation today will be vibrant, frank and intense.

By tradition, we will first give the floor to the leaders and then we will have a discussion.

Mr President, please, you are the first to have the floor.

President of Russia Vladimir Putin: Your Highness Emir Tamim, Mr Federal Chancellor Kurz, ladies and gentlemen, friends,

I welcome all the participants and guests of the 24th St Petersburg International Economic Forum.

As you know, since the beginning of last year, most meetings at many traditional venues have been cancelled or were attended remotely because of the pandemic. We are happy that after this long break, Russia is hosting the first major international business event and providing a platform for representatives of the global business community to communicate with each other, not only using modern telecommunications, but directly. At the same time, we have certainly done our best to ensure the participants’ safety and adopted the most stringent sanitary protocols.

I repeat, the very fact that this massive forum is being held is certainly a positive sign. This once again shows that partner-like ties and contacts between entrepreneurs, investors and experts are gradually becoming customary and normal once again.

We are also witnessing the same positive global economic trends. Despite the all-out 2020 slump that, according to experts, was the greatest since World War II, one can already safely say that the global economy is returning to normal. The global GDP is expected to post unusually high growth rates this year, the biggest rise since the 1970s. As you know, experts are talking about six percent growth.

This, of course, was an effect of the large-scale and extraordinary decisions made by economic authorities worldwide. By the way, practice showed that traditional monetary policy measures would not be enough to overcome the current crisis. The budgetary policy that was actively supported by central banks in developing countries for the first time has played a key role in the rapid economic recovery.

We should understand that leading economies have many resources and tools for stimulating business activity. The statistics speak for themselves: In 2020, industrial countries’ budget deficits increased by an average of ten percent of their GDPs, while in developing countries, the growth was about five percent. And we know that these budget deficits largely finance anti-crisis measures. Of course, it is good that such solutions are available, and this is, certainly, a positive aspect. Unfortunately, there are also some negative sides to this.

As a result, we can see that global economic recovery is proceeding unevenly, given the different capabilities of different countries. This is fraught with greater disproportions and wider gaps in living standards both within certain countries and between them. And this breeds serious political, economic and social risks for the development of the modern interdependent world and for our common security. I have already spoken about this at the World Economic Forum in Davos this past January.

A case in point is our efforts to fight the pandemic. Unless we ensure broad, universal access to coronavirus vaccines on all continents, the threat of the pandemic, its new outbreaks will remain with us. Pockets of infection will survive, posing a threat to the entire planet.

What do we see now? According to the IMF, countries with a high level of income and 16 percent of the world’s population have access to 50 percent of the vaccines produced. As the result, only 10 percent of the world’s population have been fully vaccinated or received the first jab, whereas hundreds of millions of people have no access to vaccines simply because their countries do not have the required technology, production facilities or money to buy the vaccines. And the assistance being provided to these countries by those who can afford to do it has been negligibly small so far.

Regrettably, as the saying goes, it is every man for himself in the fight against the coronavirus on the global scale. The necessary volume of assistance is not being provided where it is badly needed now, or, which is absolutely absurd, politically motivated bans are imposed on the purchase of tested and effective vaccines that have been proved to be completely reliable. In the current situation this looks like unwillingness to protect one’s own citizens from this threat. This is indeed taking place; we have seen this happen.

As you know, Russia is contributing to the efforts against the coronavirus. We have created four vaccines, and these achievements of our scientists have been recognised throughout the world. For example, Sputnik V has been registered in 66 countries with a combined population of over 3.2 billion.

I would like to point out specifically that we have not only created unique technologies and promptly launched vaccine production in Russia, but we are also helping our foreign partners localise their manufacturing as well. So far, Russia is the only country doing this.

As I have already mentioned, today every adult in Russia can receive a vaccine in maximally comfortable conditions, voluntarily and free of charge. I would like to use this occasion to once again urge our citizens to make use of this opportunity to protect themselves and their loved ones. As I have said, the Russian vaccine has been declared the safest and most effective vaccine in the world, with an efficacy of over 96 percent. According to our regulatory bodies, not a single death has been reported among those who received the vaccine. I have already said this, and I can judge from my own experience: you can get a small fever, and this is the only side effect, while the protection is very strong.

In addition, I would like to ask the Government, regions and business to work jointly on the vaccination of people who come to Russia as migrant labourers. Many of them work in our construction industry, in trade and services, as well as in housing and utilities.

The domestic pharmaceutical industry is ready to continue increasing the production of vaccines. We fully meet our own requirements and can give foreigners an opportunity to come to Russia for vaccination. Given the efficiency of our vaccines, I know that the demand for them is high. Moreover, it is now common practice for people from various countries, including entrepreneurs, heads of large European and other companies, to make special trips to Russia to be vaccinated against the coronavirus.

In this context, I would like to ask the Government to analyse all aspects of this issue before the end of this month so as to organise paid vaccination for foreigners in this country, taking into account, of course, security requirements and sanitary control.

Colleagues,

Obviously now, at the stage of post-crisis recovery it is important not only to ensure sustainable growth but also to benefit from the emerging opportunities and effectively develop competitive advantages as well as the scientific and technological potential. In the process, it is very important to preserve and strengthen business and investment ties between countries.

Multilateral projects are primarily capable of reviving and developing the global economy and we are grateful to our partners for the cooperation that is continuing during the epidemic and despite the difficult situation in international relations.

Incidentally, I would like to tell you in this connection that the laying of the first line of the Nord Stream 2 gas pipeline was completed today, two and a half hours ago. The work on its second line continues.

In fact, the line pipe, including the offshore section, has been laid. The pipe in Germany is in place. Now parts of the pipe must be lifted and welded on the Russian side. That is all. Anyway, pipe laying is over.

The readiness of the Russian line of the gas route to the Slavyanskaya compressor station was also ensured this week. Why am I talking about this? Because this station is one of the most powerful compressor facilities in the world and is a point of departure for the new gas pipeline. Slavyanskaya has been supplied with gas.

To sum up, Gazprom is ready to fill Nord Stream 2 with gas. This route will create direct links between the Russian and German systems and will ensure energy security and reliable gas supplies for the Europeans, like Nord Stream 1. I must add that this project is profitable economically and fully conforms to the most stringent environmental and technical requirements.

We are ready to implement similar high-tech projects with our European and other partners in the future, and we hope that the logic of mutual benefit and mutual profit will inevitably prevail over all sorts of artificial barriers in the current political environment.

Now allow me to say a few words about some of the priorities on our domestic business agenda.

Thanks to the prompt and timely measures taken, the Russian economy and labour market are already approaching their pre-crisis levels. We have managed to save millions of jobs and avoid a sharp drop in people’s incomes. True, we have encountered problems. Unemployment increased and real incomes declined; we all know this. But none of that was anywhere near the disaster that could have happened, given the circumstances. That, at least, we have managed to avoid.

We have prevented a sharp drop in incomes, as I said. Our decisions to support businesses, workers, and regions have worked. The targeted assistance provided to Russian families and people who lost their jobs also came highly useful.

Indeed, difficulties with employment remain. We will probably talk about this later. We also know that the pandemic is not the only reason for the challenges we are facing such as a relatively high unemployment rate among young people or strained regional labour markets. We know we cannot blame everything on the pandemic, and we understand that some of these problems have a systemic nature stemming from unresolved structural problems in our economy.

The Government should enhance its programmes to promote employment in those constituent regions where unemployment is still high. At the same time, I emphasise, we need to continue taking targeted action, and propose solutions that take into account the economic specifics in each region. Furthermore, I am instructing the government to launch a permanent nationwide programme to support employment of young people, including measures to promote youth entrepreneurship.

It is obvious that the main, systemic response to the employment problem, and the key condition for raising people's incomes is economic growth. This is obvious, and everyone understands it. New, high-quality jobs are needed in all sectors and regions of Russia.

World history shows that the relaunch of the economy following serious shocks has always been connected to boosting investment in infrastructure, territorial development, new technologies and personnel training.

I would like to thank the Russian regions that did not take a break or find excuses amid the most difficult pandemic environment that required great concentration of resources and attention, but continued to work on improving their business climate, maintaining dialogue with businesses and attracting investors. These regions have been rightfully distinguished by the National Investment Climate Ranking. Thus, Bashkortostan, Nizhny Novgorod Region and the Khanty-Mansi Autonomous Area are listed among the ten best regions to invest in; Samara, Sakhalin and Chelyabinsk regions have shown good dynamics.

We will provide systemic assistance to the regions in improving the business environment. I would like to ask the Presidential Plenipotentiary Envoys to boost efforts in this area and the Government to focus on supporting the regions that have difficulties with raising investment. It is necessary to help them introduce the best management practices and improve the level and quality of work with investors.

This task is quite concrete: a transparent, predictable and comfortable environment must be provided for businesses, private investments and new projects in all Russian regions by 2024.

In particular, each region will need to outline priority development areas; this information will be open to businesses, as well as the region’s urban development and infrastructure plans for building utility lines, roads and communication systems, so that it would be easier for businesses to pick the best place for their new production site or other facility.

It is necessary to eliminate excessive links in the chain, various superfluous formalities and approvals, first of all, for the most sensitive areas such as connection to the grid, construction permits, and others.

We are consistently removing dated requirements at the federal level. Thus, starting September 1, almost 4,000 more building codes and regulations will no longer be mandatory. That will leave only 3,000 mandatory requirements in construction of the more than 10,000 we had previously. But there is still room for simplification.

I would like to note that this huge and painstaking work to streamline regulation took two years. Again, we will keep at this, while at the same time maintaining high requirements for the quality and reliability of construction.

I am asking the regional heads as well as the customers of major facilities at the federal and regional levels, and heads of our state-owned companies and private businesses to keep in mind that all construction permits will need to be prepared in line with the updated regulations and should take into account the rapid changes in construction technologies, and use advanced, highly sustainable building materials. All this will need to be considered.

In general, each region must offer an understandable, comprehensive algorithm for the investor to go all the way from project concept to the opening of a new industrial facility or a property as efficiently and quickly as possible, without wasting time or sustaining unnecessary costs.

I will once again stress the importance of cooperation between the Government and the regions. I would like to note that the performance of the federal ministers responsible for economic matters will also be evaluated by how quickly the situation improves in those regions where, as I said, there are still problems with the business and investment climate. Please do not pretend that this does not concern the federal government. This applies to everyone. We need a common result, and we need to work with the regions that need support.

Again, we should not have any so-called backward regions thrown on the sidelines of economic growth. Each constituent entity of the Russian Federation has investment and economic potential. We need to unlock and effectively use it in the interests of all Russians, for the good of all Russian families.

A programme of infrastructure loans that will give the regions an opportunity to attract long-term loans at a low interest rate will become a new instrument for their development. We have already spoken about this, discussed these matters and made public statements to the effect. In all, the actual investment in infrastructure under this programme must be no less than $500 billion in the next two and a half years.

I would like to ask regional governors to be very attentive to drafting projects for this type of funding. It is necessary to spend funds primarily on creating a comfortable environment for people and upgrading cities and other residential areas. This is a major factor of economic growth and investment appeal in the modern world, in the economy that surrounds people.

Based on the best international standards and the experience of rating the investment climate, the Agency for Strategic Initiatives drafted, in cooperation with experts and commissions of the State Council, a national rating of living standards in the regions of Russia. It is an important indicator and I would like to tell you about our first results in this respect.

Moscow, Tyumen Region, Tatarstan, the Khanty-Mansi Autonomous Area and St Petersburg are in the lead for obvious reasons. They are our traditional business centres. They have long invested serious funds in infrastructure for people. Importantly, more and more Russian regions are guided by high standards and are demonstrating good dynamics in many areas. Thus, the Republic of Mordovia has one of the best education systems; Udmurtia has very comfortable conditions for launching and running businesses, while Novgorod Region leads in social protection.

I would also like to mention such an interesting integral rating indicator as the commitment of people to their region, a desire to live and work there and link the future of their children with it. Sevastopol and Kaliningrad Region are at the top in this respect.

I would like to emphasise that the rating of the quality of life in the regions makes it possible to assess the situation objectively, to see which regions have the most experience and the best practices. Moreover, this rating is primarily based on the opinion of residents themselves. This feedback allows regional managerial teams to plan work better and to focus efforts on the most sensitive problems, such as, of course, more affordable housing.

I am aware that here, at the forum panels, and in the country in general, the issue is being discussed about what will happen next with reduced-APR mortgage lending, which, as you may recall, is now available at an APR of 6.5 percent. Indeed, this programme has become one of the key anti-crisis measures to support individuals and the economy. To date, over half a million households have applied for and received this loan. An additional 2 trillion rubles, approximately, have been attracted to housing construction.

As you may know, the programme will expire very soon, on July 1. To reiterate, this was an anti-crisis programme, meaning that it was temporary.

At the same time, abruptly terminating it is, of course, not an option. We must keep in mind the important role that easy-term mortgage lending is playing in the current circumstances for resolving our people’s housing problems and developing the construction industry, which, as we are aware, is the driving force behind related industries. Therefore, I propose extending this programme in all regions for another year, that is, until July 1, 2022. We will raise the rate slightly in doing so. Some changes will be made, including setting the easy-term mortgage rate at 7 percent APR. The maximum loan amount will be set at 3 million rubles and it will be applied throughout the country.

At the same time, I would like to let you know about a new decision designed to make mortgage loans more affordable for families with children. Here is what it is about. As you may be aware, a systemic special mortgage programme for families that had a second and subsequent child after January 1, 2018, is already in place. I propose expanding this to all families with children born after January 1, 2018, even if there is only one child in the family so far. That is, to reiterate, with the birth of their first child, a family will be able to take out a mortgage loan at a rate of 6 percent and buy housing on the primary market or refinance an existing mortgage loan. The maximum amount of such a loan for Moscow and St Petersburg, as well as the Moscow and Leningrad regions, where real estate prices are objectively higher, will be 12 million rubles, with 6 million rubles available in the other constituent entities of the Federation.

Colleagues,

We hope that a better quality of life and improved infrastructure in Russian regions will make them more attractive for promising projects, for more private investment, and will open up additional opportunities for large companies as well as small and medium-sized businesses, serving as an important support for the economy, and in many ways contributing to a modern, competitive business environment. Competition is the main driver of growth and, importantly, a market mechanism that keeps prices down.

Last year, we made a fundamental, systemic decision to support small and medium-sized businesses. We halved insurance premiums for small businesses from 30 to 15 percent. We will certainly not go back on this. Moreover, we are ready to take further steps to support entrepreneurship. I will mention some of them now.

Firstly, I propose launching a new mechanism to support SME lending as soon as this year – something we call umbrella guarantees.

Here is how it works. Our development institution, the SME Corporation, will issue guarantees for loans from partner banks. In fact, it will take on some of the risks and make loans more affordable for SMEs. According to estimates, this will allow entrepreneurs to attract additional resources for development, at least 600 billion rubles by 2024.

Secondly, I know that businesses, especially small ones, sometimes complain about the high bank charges on their trade and other operations.

We have already extended the faster payment system, which enables transactions with lower charges, for non-cash payments between individuals and entrepreneurs. However, so far, this system has not been as widely used by businesses as it could be.

As a reminder, by September 1, all the so-called systemically important, backbone banks in Russia must connect to the fast payments system. I also think it would be right if the largest of them do this in the very near future, by July 1.

In addition, I have one more proposal that I think will be a pleasant surprise for those who are involved in this type of business, small and medium companies. I am suggesting that they be fully reimbursed until the end of the year for the commission they pay for using the Fast Payments System (FPS) when they sell their services or goods to individuals, to people. I repeat: the cost of FPS will be zero for these companies.

I discussed this issue with my colleagues and the Governor of the Central Bank. It will be necessary to support financial institutions through the budget and avoid discouraging them.

My third point: companies that are now using the simplified taxation plan must transfer to the general tax schedule if they go beyond the employee limit or the revenue limit. Of course, in this case a business will have to shoulder an additional fiscal burden, and this can impede growth and compel entrepreneurs to use tricks, like the artificial division of a big company into small ones.

The restaurant business is a case in point in this respect. I suggest these companies participate in the pilot programme at the start of next year to work out the process for a more comfortable transition from the one tax schedule to the other.

With respect to some details, the companies in this programme will pay no VAT if their revenue is below 2 billion rubles a year. Importantly, they will retain the right to pay a reduced insurance premium rate of 15 percent even if their personnel count grows to 1,500 people. Currently the threshold is 250 people.

Colleagues, let us see what effect this has on keeping businesses legal and encouraging companies to grow. As for making businesses legal, I think all interested people understand what I am talking about: all cheques must go through the cash register; employment must be official and purchases must be legal as well, that is, recorded in the cash register. (Applause).

Thank you. I suppose we speak the same language. For my part, I will do all I can to see that the state meets its commitments.

I will add that we have already agreed to relieve of filing a tax declaration those entrepreneurs that are working under the simplified tax scheme and using cash registers. I would like to draw the attention of my colleagues in the Government and Parliament to the relevant draft law that was adopted in the first reading last year: it has stalled since then. Please finalise this as soon as possible.

Fourthly, small and medium-sized businesses must be relieved of antimonopoly oversight that is clearly excessive. Many existing threshold numbers have not been revised for a long time now and do not match today’s economic realities, since the economy and the companies keep growing.

For example, antitrust oversight covers all companies with annual revenue of over 400 million rubles. I propose doubling this amount to 800 million rubles, thus sparing a large number of growing companies burdensome and unnecessary reporting and paperwork. I propose setting a similarly higher threshold for oversight of mergers and acquisitions. That is, if a deal does not exceed 800 million rubles, it will not require the approval of antimonopoly authorities.

And, finally, my fifth point: measures to drive demand for the output of entrepreneurs across all sectors of the economy are especially relevant now. In this regard, I propose increasing the share of goods and services that our large companies, as well as state and municipal customers, must purchase from small and medium-sized enterprises, including non-profit organisations. It should be at least 25 percent.

We have held numerous discussions on this matter. I want to draw your attention right away to the fact that we are talking about companies that operate under Federal Law 223 and the companies that work with state and municipal authorities under Law 44. I am aware there are many subtleties here. And I know well that Russian industry does not even make certain products. However, the bar must be set where I said, and the Government will finalise the finer points.

In addition, it is imperative to cut the time it takes to pay for delivered goods and services from 30 to 15 business days, which is also important. Small businesses and socially oriented NGOs must see this time go from 15 to seven days.

Of course, real companies, not all sorts of sham or affiliated operations, should benefit from these preferences. I want the oversight authorities to keep this in mind. At the same time, I am instructing the Government to make sure that procurement for state needs involves mainly Russian manufacturers, of course, in compliance with internal competition rules, in this case.

Ladies and gentlemen,

As I have said earlier, international cooperation must be instrumental in overcoming the socioeconomic consequences of the pandemic. It is all the more important for us to pool our efforts in the face of common, systemic, long-term challenges that do not depend on the situation in the market or political disputes and setups, but determine the future of entire societies in a decisive way.

What am I talking about now? What am I referring to? Primarily, the climate agenda. Scientists estimate that over 2 trillion tonnes of greenhouse gases have accumulated in the Earth’s atmosphere because of human economic activity. Every year, the volume goes up by 50 billion tonnes, gradually warming up the planet.

I often hear that Russia is not that interested in resolving global environmental problems. I can say that this is nonsense, a myth, and sometimes outright distortion. Like other countries, we feel the risks and threats in this area, including desertification, soil erosion and melting permafrost. Many of those here work in the Arctic and know that we have entire cities built on permafrost in the Arctic. If it all starts to thaw, what consequences will Russia face? Of course, we are concerned.

We are consistent supporters of the UN Framework Convention on Climate Change, the Kyoto Protocol, and the Paris Agreement. I must emphasise that there is no separate Russian, European, Asian, or American climate. All our countries bear a common responsibility for today’s world and for the lives of future generations. We must set aside political and other differences and avoid turning the transition to “hydrocarbon neutrality” into an instrument of dishonest competition where attempts are made to change investment and trade flows in someone’s specific interests under the pretext of the hydrocarbon footprint, and where limited access to advanced ‘green’ technology becomes a factor in deterring individual countries and manufacturers.

How do we see Russia’s contribution to countering climate change? I am sure environmental and climate projects in our country will play a leading role in global efforts in climate conservation by virtue of Russia’s size, place and role in the world. We have set a goal: in the next 30 years the accumulated amount of pure greenhouse emissions must be lower in Russia than in Europe. This is an ambitious goal, but I am confident that it is feasible. I would like to ask the Government to draft a detailed plan of action on this before October 1 of this year. We will discuss this issue at a separate meeting.

What are our areas of focus?

The first one includes projects designed to reduce emissions throughout the economy. I have already mentioned that the Russian energy sector is increasing its share of low-carbon sources primarily through building nuclear and hydroelectric power plants and using renewable sources of energy. We have the world’s largest gas reserves, and while gas – we will probably discuss this later – is, of course, carbon, it is the purest kind of carbon, and we will be unable to do without it during the transition period.

Incidentally, using its nuclear industry as the foundation, Russia is already creating infrastructure for the production of hydrogen to be used as a raw material, fuel and energy source in metallurgy, the production of cement, and transport, among other areas.

We will also keep reducing emissions from hydrocarbon production and utilising associated gas. By the way, we probably utilise more gas this way than any other oil-producing country. We will thoroughly modernise the thermal power industry and electrify gas transport infrastructure. We also plan to further improve energy efficiency in the residential sector and heat supply systems, to switch public transport to natural gas, electric and hybrid engines, and to reduce material consumption in construction. In a word, we are talking about end-to-end technological retrofitting of our entire economy and infrastructure.

Clearly, such projects need market incentives in order to be launched successfully. To this end, we are starting to issue state-subsidised ‘green bonds.’ Also, we have developed performance criteria for environmental projects or a ‘green taxonomy’ in the parlance of experts.

Of course, reducing emissions is not enough to overcome the challenge of global warming. Greenhouse gas sequestration is essential if we want to achieve carbon neutrality. It is important to reduce existing levels of greenhouse gases in the atmosphere, and our main goal is to learn to capture, store, and make productive use of carbon dioxide coming from all sources.

Now, regarding a second area in this context: an entire industry, a fundamentally new market for so-called ‘carbon units’ is being created almost before our eyes. Many people, especially those in power production, are aware of this, but I will explain. This is the amount of harmful airborne emissions that can be absorbed by a section of land or forest. So, if you have done some additional work on your land to increase its ability to absorb the emissions in the air, you have created a number of carbon units. Many countries and associations are already planning to accept these units from exporters to offset the emissions from the production of imported goods.

Russia has enormous potential for emission absorption with its forests, tundra, agricultural lands and marshlands. Our country has a fifth of the world’s forests; they occupy almost 10 million square kilometres. Specialists and scientists believe that they are already absorbing billions of tonnes of carbon dioxide equivalents every year.

I repeat, the importance of Russia’s potential in natural compensation is enormous, simply huge in terms of the planet’s climate sustainability. Clearly, by virtue of its natural advantages, Russia can maintain a special place in the global market for carbon units. To achieve this, we need to use the forests and lands more effectively and enhance their absorption capacity. We must increase reforestation areas, fight wildfires, and expand pristine nature reserves, sanctuaries and national parks. In effect, we are now doing all this and intend to continue to do this in the future while introducing new soil-recovery agro-technology.

Importantly, we can work towards three objectives at the same time. Firstly, by investing in technology, the protection of forestry and land improvement, we will enhance the environmental wellbeing of our people, and the cities and territories they live in. Secondly, we will create jobs in the new high-tech industry of greenhouse emissions mitigation, and third,ly we will provide our exporters with an additional dimension for competitiveness in foreign markets.

This concerns many of you here in this hall. I would like you to see this as a direct message to Russian companies that are buying or starting to buy carbon units abroad or are planning to do this in the future. Instead, it is better to invest funds in climate projects in our country. Eventually, those who engage in this will receive many benefits, economic benefits. This effort will be more effective and oriented towards the future.

I would like to note that, based on our estimates, revenue from this new climate industry in the Russian market could soon surpass $50 billion a year, which is another important figure. In a word, this is a good, beneficial destination for investment by both domestic and foreign companies. We invite our interested partners to take part in this work. We will create the necessary conditions for this.

I would like to discuss several issues that are of critical importance for climate projects in Russia. It is necessary to work through in detail the criteria underlying these projects, to determine the sites and areas that are best suited for launching them, and the kind of technologies to use.

It is also imperative to create a transparent and objective system for assessing the outcome of climate projects. This is a critical part of what I am saying now – that is, to identify the current absorbing capacity of the sites and what it will be after the project is implemented. Actually, it is about calculating the delta in the form of the “carbon units” that I just mentioned.

All the while, it is important to monitor the emission and absorption of greenhouse gases based, among other things, on observations from outer space, digital technologies, and AI methods.

The construction of such a national system that makes use of the potential of Russian science is already underway in Russia. We are creating a network of “carbon testing grounds” to monitor carbon dioxide emission and absorption in real time, as well as the state of environmental systems, the quality of water resources and other variables.

We are also creating a pilot carbon market in Sakhalin Region. This experiment will come as a step towards achieving carbon neutrality and creating a nationwide carbon unit market.

I am aware that a system of this kind is about to be launched in other countries as well. Here is another important matter, which concerns mutual recognition of greenhouse gas emission and sequestration. This requires a transparent climate statistics system, mutual understanding between states and, of course, joint scientific research. We are open to this cooperation.

I am instructing the Government, by July 2022, to fully form the regulatory framework for implementing climate projects in Russia at the level of federal laws and departmental bylaws and guidelines, so that businesses, domestic and international alike, can draw up and implement their plans in this area relying on clear and easy-to-follow rules and criteria.

Colleagues, let me close by saying again that, despite the challenges presented by the global pandemic, life is gradually returning to normal. To reiterate, our meeting in St Petersburg is a case in point. Next week, St Petersburg will be hosting matches of the 2021 UEFA European championship which is getting underway.

On this note, I would like to convey my greetings to our great friend, the Emir of Qatar. It was his birthday yesterday. Our best wishes to you, Your Highness. I am confident that Qatar will host the FIFA World Cup 2022 with great success.

Such major events and forums truly unite and bring people from different countries closer. Businesspeople, of which there are many here, are well aware that in-person contacts based on mutual trust move forward, in many respects, business projects and initiatives, and, therefore, the global economy.

Russia will do its best to create every opportunity for these contacts to take place, for sharing experience and demonstrating the latest achievements in science and technology.

Thank you for your patience and your time, and I wish the forum every success.

Thank you very much.

Stanislav Natanzon: Mr President, you reported great news about Nord Stream 2. I think we will talk about it further in our discussion.

I would like to clarify something about your remarks. You called small and medium-sized businesses the basis of Russian economy. However, we all know how big the share of the state-owned sector is in the Russian economy. The Audit Chamber – Mr Kudrin, if he is present here, will confirm it – believes that the share of the state economy, the state-owned sector will only grow as a result of the pandemic.

You spoke about ways to support the economy. We know that a fairly large amount of money is earmarked for that. Will you please tell us if that money will go to the state sector and then the private investors in this room can relax, or will it go to private investors? Do you place your stake on state companies or private ones?

Vladimir Putin: It is common sense that I place my stake on, and the specific conditions the world and the Russian economy are facing.

The share of the state is growing all over the world, in all countries, during a time of crisis. It happens everywhere, just look and see. As soon as the situation stabilises, the number of private businesses grows, both the number of companies and their turnover. There is nothing new for Russia here.

We have large companies with state participation, such as Gazprom, Rosneft and others. But they are only partially owned by the state, they are not state-owned companies in the direct meaning of the word. However, we are perfectly aware and understand that we must move further in the direction of privatisation. And it is what we are doing.

Consider this: I mentioned some of our companies, Rosneft, for instance. Sitting opposite me is Sberbank chief. Foreign shareholders there make up almost a half – 47 or 48 percent. You see, it is wrong to claim that Russia radically differs in this respect from other countries

What did I speak about in my remarks? That we will support small and medium-sized businesses, including at the expense of our large companies that are partially owned by the state. We task them with purchasing goods, for example, from small and medium-sized businesses – which are not state-owned companies – in the amount of a quarter of their total purchases. This is direct support for small and medium-sized businesses, for the private sector.

Speaking about privatisation processes, they are ongoing in our country. We just try to do it carefully and take the market situation into account: what can be sold, at what price and whether we should sell under the current condition at all.

Nevertheless, our cardinal goal is to develop market relations in the country, to support private business and attract private investors.

(Next, Emir of the State of Qatar Sheikh Tamim bin Hamad Al Thani and Federal Chancellor of the Republic of Austria Sebastian Kurz addressed the plenary meeting participants via a video link. President of Argentina Alberto Fernandez and President of Brazil Jair Bolsonaro also sent their video messages of greetings to the attendees.)

Stanislav Natanzon: Mr President, as I watch the video presentations and addresses, I keep thinking: why did we all get together here? Has the pandemic ended or what?

Vladimir Putin: We have gathered here in the way that was recommended to us by specialists, by sanitary doctors. They believe gathering in this format is fine.

Unfortunately, we were unable to welcome the top officials who are attending our event online. The problem is not with the top officials but with the fact that they are accompanied by large delegations. Doctors told us that this would be hard to monitor and this is why we should exercise caution.

I would like to draw your attention to the fact that some of our colleagues sitting here in the room are wearing masks and gloves.

Stanislav Natanzon: But half of the world are staying at home.

Vladimir Putin: Half of the world are staying at home. Our situation is better than in many other countries. However, the pandemic is not over yet and we must watch out.

It is summer, people are mixing, there are a lot of contacts. Regrettably, many people keep thinking the way they used to, that they will not be affected, and they ignore the recommendations doctors are urging us to follow.

Nevertheless, the current situation in Russia and St Petersburg allows us to hold such events without any particular risk of spreading the infection. We are doing what corresponds to the current situation in Russia.

Stanislav Natanzon: All right.

Before I begin asking about the economy, investment and money, allow me to inquire about an important matter – football. I am referring to you, of course, Your Highness.

The pandemic. Everyone is seeing what happened, for instance, with the Olympics, which have been rescheduled. Spectators are now completely uncertain about how the games will be held, and, of course, a question arises.

In 2018, Vladimir Putin handed over a symbolic FIFA World Cup ball to Qatar. We remember that FIFA acknowledged that the World Cup in Russia was one of the best in many years, if not the best in terms of organisation. Will you please tell us if Qatar is going to beat that benchmark, how preparations are proceeding for the FIFA World Cup and whether it will be held next year because of the pandemic? How has the pandemic affected the preparations?

Emir of the State of Qatar Sheikh Tamim bin Hamad Al Thani (retranslated): You said President Putin handed over a symbolic football to us in 2018. In reality, what Russia did, largely thanks to President Putin’s efforts, and what our Qatari people working in the international football organisation did – they did everything possible for us to hold the World Cup at a high level.

We are now getting ready for this remarkable event and we believe that any procrastination in the preparations would be unacceptable. We think that everything must be held on schedule. The 2021 FIFA Arab Cup in November will be a very important rehearsal.

The pandemic has struck the entire world and not just Qatar. Overall, everything is proceeding to schedule. There are some delays on several facilities but it does not cause any concerns and Qatar is ready from the point of view of transportation efforts and infrastructure. There is no doubt that Qatar will host this championship. As I have said, Russia showed excellent results in preparing for that championship in 2018. The whole world witnessed that. Russia set a very high standard. We will certainly use Russia’s experience. We hope that Russia will help us organise the championship in Qatar also at a high level. This high standard will be an incentive for us and I think our championship will be held at a high level.

Stanislav Natanzon: Let us get back to the economic agenda. This is even more fitting since you, Mr President, have just announced that the first line of Nord Stream 2 appears to have been completed.

Mr Chancellor, we would like to hear your opinion. We have seen the US attitude to this project in the past years: sanctions and restrictions were imposed that delayed the launch of Nord Stream 2. Do you think there are more risks, that the project will not be competed, or it will definitely be finished?

Is there a chance that even after the construction is completed, your companies that are part of the project will not get gas from this pipeline?

Federal Chancellor of the Republic of Austria Sebastian Kurz (retranslated): It is true, Austrian companies are taking part in this. We, as well as Germany and some other European countries, see it in a positive way. Of course, other countries, such as Greece, are also interested. But we are convinced that the routes have been laid the way they should have been. Of course, we hope that we will be receiving gas both in Austria and other parts of Europe. We will definitely need gas supplies for a long time.

Indeed, Nord Stream 2 now provides us with safe modern gas pipeline routes. And this project must definitely be completed under the provisions you have mentioned.

According to our estimates, we are very optimistic about it. We hope it will be implemented, and so does Germany as well as other European countries. We also hope that it will ensure Europe’s energy security and will be good for Russia because we do buy a lot in the Russian market.

Stanislav Natanzon: Mr President, do you think there is still a possibility that Nord Stream 2 will be stopped by US sanctions after all, or that using it will be impossible due to US sanctions?

Vladimir Putin: I would like to say, as I have said repeatedly, I want to stress that this is a purely economic, commercial project.

If someone thinks or considers its goal is to bypass certain transit countries, that is not true. Because the route along the bottom of the Baltic Sea from Russia to the Federal Republic of Germany is shorter in terms of kilometres – I want to be heard once again – shorter than via European countries – Ukraine, Slovakia, Austria and so on. This route is shorter and cheaper. This is number one.

Secondly, there are no political risks regarding transit countries and there is no need to pay for the transit. It is economically more viable. It means that the end consumer in Germany – both the utilities companies, households and the economy – will be getting it cheaper than via transit through several European countries. It is just economically more practical.

We said it a hundred times; still some sort of malign propaganda keeps being stuffed into people’s heads with the idea that there is politics at play here and a wish to bypass some countries. Why do you think our partners are fighting for this project the way they are, to please us? They are fighting for their national interests, that is what they are fighting for.

I think it must be completed, especially as the new US administration keeps saying that it wants to build good relations with their major partners in Europe. How can one build good relations with their partners and at the same time not care about their interests? This is pure nonsense.

Next. Our gas source is the cleanest in the world. Let me tell you why. Because the US gas industry extracts approximately 77 percent, over 70 percent of gas by fracking whereas Gazprom uses fracking to extract only 11 percent. But the gas that will be transported via Nord Stream 2 is pumped straight from under the surface. There is no fracking at all. Meanwhile, fracking is a catastrophic way to extract gas from the environmental point of view. Dozens and hundreds of tonnes of chemicals are pumped underground when fracking. This causes direct damage to the environment. We all keep talking about the environment – and here you are, this is the most glaring example of what is being done and how.

Sanctions are generally harmful for the world economy; they reduce the world economy instead of helping to expand it. But in this case, it is just a way of achieving unfair competition.

If we talk about such a source of energy as natural gas for the world economy, let us keep in mind that it is the best, most wanted product for the fairly long period of transition to green energy. Of all hydrocarbons it will remain in the market the longest since it is the most environmentally friendly carrier.

I think such projects are being implemented to meet the interests not only of Russia but also of its partners in Europe, I am sure of that, and they must be implemented.

I have already said that the pipe-laying for the first line has been completed. I hope that the second line with a capacity of 27.5 billion cubic metres will be completed within a month and a half or two, most likely two months.

Stanislav Natanzon: And when will the deliveries begin?

Vladimir Putin: Now, I repeat, we need several days to… Here is Mr Miller sitting opposite me, he tells me about it every day. Two pipes have been laid, the laying operations are over. Now these pipes must be lifted from both sides – the one that came from the German shore and the one from the Russian shore, then welded, and that is it. It will probably take ten days. Gazprom is ready for deliveries, but everything will depend on the German regulator.

I do not know if the German government delegation has come back from Washington or not; they had talks on how to build their relations with their US partners. Their gas is more expensive, do you see? To say nothing of the way it is extracted, which, let us be frank, is barbaric. On top of that it is 25 percent more expensive. Either buy a cheaper product of a higher quality from us, or buy a product which is extracted in a complicated way from the environmental point of view, let us put it this way.

Germany’s Greens advocate buying American LNG. But if they are really green, they should know that over 70 percent of the gas is extracted by fracking, and what it means for the environment. Let us look at this systematically and honestly, and draw conclusions. And the conclusions are that the gas here is more environmentally safe, cleaner, cheaper and more reliable. This is why our partners opted for this project.

(Applause.)

Stas Natanzon: But the thing is, the pipeline currently in operation nurtures entire regions of Europe. Just recently Ukrainian President Zelensky stated this…

Vladimir Putin: Do you think we must feed everyone? What, are we obliged to feed everyone?

Stas Natanzon: The Ukrainian President said that they will have no money for their army when Russian gas stops transiting across Ukraine.

Could you tell us whether the Ukrainian gas pipeline system will be needed when Nord Stream 2 is completed?

Vladimir Putin: I asked my press secretary, Mr Peskov, to say a few words about this but as I have the opportunity to say that myself, I will. Look, first, we still have a gas transit contract with Ukraine. We will be pumping up to 40 billion cubic metres over the next five years. In better years the volumes were, I think, nearly 200. In 2018, we delivered to Europe over 200 billion cubic metres of gas. If we had normal relations, we would have delivered a major part of this through Ukraine.

But Ukraine comes up with problems in this area, problems that have emerged not so much in politics but rather in the economic sphere because of their having a monopoly on gas transit creates the illusion, on the one hand, that they can raise transit prices sky high and on the other that they can try to make the gas price, which they buy directly through their contracts with Russia, as low as possible.

Monopolies are bad, that’s exactly the point. It is not even about politics, all this began earlier. A while back we signed a memorandum with Ukraine. Mr Chancellor, the former Chancellor of Germany Gerhard Schroeder is present here. I, your humble servant, Mr Schroeder as Chancellor and Mr Kuchma, the then President of Ukraine, signed a memorandum on moving towards establishing, on the basis of the Ukrainian GTS, a consortium of Russia, Ukraine and European partners – not just with the Federal Republic of Germany but also with other partners. All that would remain Ukraine’s property and the consortium would repair, maintain, develop it and so on.

Then another president came to power, Mr Yushchenko, and all that was scrapped. Then delivery scandals began and by 2008 deliveries stopped altogether because Ukraine blocked the transit. These are the risks, do you understand? The point is not that Ukraine has no money to maintain its army. At present they get $1.5 billion from us. They could receive three, four or five (billion). You wrecked everything with your own hands.

But, let me repeat, we have a five-year contract for 40 billion [cubic meters per year]. However, we proceed from the assumption that deliveries to Europe will be growing. The delivery volume may increase by 50 billion cubic metres in the coming ten years. There has been record-high consumption and record-high purchases in the first quarter of this year. Last year we delivered around 180 billion while this year we can go beyond 200 billion cubic metres because demand is on the rise, the economy direly needs gas as it is developing and recovering from the pandemic. But in the coming ten years delivery volumes to Europe may increase by another 50 billion. There you have it, there is an opportunity to use the Ukrainian gas pipeline network in the future, even after our transit contract expires.

Everything is possible, we are ready for this and we want it to happen, but goodwill from our Ukrainian partners is required. They should be spending money not on sustaining their army and utilising it to resolve their problems in Donbass by force, but on boosting their economy, working with people, see what I mean?

We proceed from the fact that we have complicated relations with Ukraine’s leadership, yet we take into consideration how people are getting on there. If only we had normal relations. Currently the gas price for the population is around $62–$63 per a thousand cubic metres. And what do you think the price in Ukraine is? Yesterday at the gas hub (that Ukraine pays) price stood at $330 dollars per thousand cubic metres. Add transporting, and Ukrainians get their gas for about $350. Belarus pays about three times less for our gas than the hub price, I will not give the numbers now whereas Ukrainins pay more than that, you see?

We need to establish normal economic relations. We want this and are ready for it. We hope that one day their decision-making will be guided by first and foremost common sense.

Stas Natanzon: Let’s look more broadly at the gas market, not just as it concerns deliveries via Nord Stream or other routes.

Look, we are having a plenary discussion here: there is Austria which uses the euro, and there is Russia and Qatar, which have natural gas. Will you please explain why Russia and Qatar sell their gas to the euro zone for dollars? Why do you need an intermediary?

Let us begin with Mr Chancellor, Mr Chancellor, why do you buy Russian gas and other goods for dollars even though you have euros?

Sebastian Kurz (as translated): I think I can give a very simple answer to this question. We have an international system, which explains why prices are calculated in US dollars. Our currency matters for us. It is a system that has proved itself over time.

If we look at the Austrian economy, it has been developing very well in the past decade. Of course, we need energy security and we have secured this by leveraging a number of factors and in this respect we have made progress.

Regarding renewable energy sources, we realistically want to achieve 100 percent renewable energy by 2030. The demand for oil and natural gas still remains, so we have many good connections with many countries, with which we cooperate and have ensured secure interaction. This is the reason why we have a very positive view of the Nord Stream 2 project. We are not looking to save on transit costs. We just want to make sure it is a secure energy source.

Concerning Ukraine … We certainly want the situation in Ukraine to be settled one way or another. I think that international cooperation must develop, and the more it develops the more stability we are likely to have and the better it will be for economic development, not only in Europe but also across the world.

Stas Natanzon: You say the current system has developed this way, but it came to be way back in the previous century. We are almost a quarter into the 21^st century, we are now living in 2021.

You say this payment system in US dollars is reliable. But how reliable can it be when a third external player can cut off payments at any moment? How is this reliable?

Sebastian Kurz (as translated): The point is that market prices throughout the world are indicated in US dollars, this is why it is has become acceptable. We can also pay in euros for our energy demands. But in our opinion, it should not be an issue of geopolitics for us, but rather purely an economic issue. If prices are calculated – generally speaking, it does not matter in which currency.

We should probably think about sustainable development, we should think about how we can preserve our resources and about how we can transport energy taking all this into account. That’s why we focus on the big players, it probably matters to them in which currency goods are priced. Meanwhile, we are a small country, and for us, the issue of security matters more than the issue of price.

Stanislav Natanzon: Mr President, in your opinion, does the currency matter?

Vladimir Putin: Stability, predictability and reliability matter. The currency does not.

Stanislav Natanzon: Is the third wheel necessary?

Vladimir Putin: But if the currency producer, in this case the United States, does not value its national currency as an international reserve currency – and, by all appearances, the United States does not value the dollar too much since it is used as an instrument in competition and political strife – that, certainly, damages the dollar as a world reserve currency. If we look at what is happening (this is not our own data but the data from the World Bank and other international institutions), the dollar-based gold and foreign currency reserves of many countries, including allies of the United States, are diminishing, as is the scope of dollar transactions.

For now, our operators prefer to work with dollars. As an exchange commodity, oil is tied to the dollar more than gas, which is not an exchange commodity. This is why, generally speaking, we are ready to consider transactions in national currencies as well. We are already doing it with many of our country partners. We are ready to consider euro payments. Euro is completely acceptable for gas transactions. Of course, it is possible and, perhaps, it should be done. However, if oil producers no longer operate in dollars, it will seriously hit the dollar as a world reserve currency.

We do not want to use these instruments for political tinkering of any kind, and we are not going to do that. But the logic of the global economic system’s development, the global currency system, indicates that we need multiple reserve currencies to guarantee the security and stability of the global economy and the financial system. We are thinking about that carefully.

Stanislav Natanzon: Your Excellency, I would like to hear your opinion. Qatar is the largest producer of gas, LNG, and a supplier for Europe, among other regions. What does the future of the global gas market look like from Qatar’s perspective? Can you see any risks in the prospect of Europe shifting towards carbon neutrality?

Please tell us what you think.

Tamim bin Hamad Al Thani (retranslated): Yes, indeed, as you said, Qatar is a major gas supplier. We plan to increase our share to 40 percent by 2026.

Our LNG is high-quality and, naturally, we use this advantage to our benefit. We cooperate with many international companies, including Russian companies; we take advantage of this efficient cooperation and cutting-edge technologies, with due regard for security and environmental issues and other crucial aspects. As I said, we expect to reach 40 percent by 2026.

As concerns gas exporting countries, I hope that our next meeting will take place during the forum of gas producers in Qatar. We will discuss areas of our further cooperation and options for coordinating our actions. Obviously, we bear great responsibility for the future of this important energy industry. It should be noted that efficient gas use is one of the key dimensions of our vision of this future.

Thank you.

Stanislav Natanzon: The sanctions – we have heard this word several times today. Sanctions are being imposed on Russia, and Russia responds by imposing sanctions on other countries. A list of countries that are unfriendly to Russia was recently published. So far, there are two countries on this list, namely, the United States and the Czech Republic. We may discuss later why this happened. But since this is an economic forum, Mr President, I would like to ask you how to attract investment from unfriendly countries?

Vladimir Putin: By working with the people and companies in those countries who do not consider us their enemies.

A delegation of US businesspeople is traditionally present at the St Petersburg International Economic Forum. A year or two ago, it was the largest one.

Stanislav Natanzon: This year, too.

Vladimir Putin: There you go.

Stanislav Natanzon: Over 200, I think …

Vladimir Putin:… 200 participants.

This is the best indicator that US business is interested in working in Russia. Despite all the political restrictions, it strives to keep its positions on the Russian market. It is interesting and promising. Some companies, our foreign partners, maintain their capitalisation precisely because they are working in Russia and have rather large assets here. Of course, this applies to energy in particular.

Therefore, we rely on the people who have enough common sense to build a positive relationship.

Stanislav Natanzon: Mr Chancellor, why do you think relations between Russia and Europe have deteriorated so rapidly lately?

Sebastian Kurz (retranslated): Frankly, this is also a very negative factor for me. This upsets me. When I took office, I really hoped that the conflict in Ukraine would be resolved and we would return to positive cooperation.

In recent years, we have spoken with foreign ministers and many other people. Nothing is changing for the better, unfortunately, this is not in the interests of stabilisation. We are really witnessing a decline in relations.

The reasons may differ. Austria’s goal is to do its fair share to stop this spiral of escalation so that the situation calms down – that's what we want.

There are steps that we believe run counter to international law. They led to what is happening now, to the current situation in Ukraine. Of course, we would like to find ways for optimal cooperation and development, and a way out of this unpleasant and bad situation at the diplomatic level, for example, in the Minsk format. Many countries are interested in relieving these tensions and restoring normal dialogue. The Economic Forum seeks to promote cooperation and unity, not to fight against each other. This is the right thing to do.

All important players are aware that peace is a common cause, there cannot be peace that is against someone. We in Austria support the sanctions imposed by the European Union, because we believe there have been steps that contradict international law. But we hope there will be an opportunity to resolve this crisis through diplomacy and to build a dialogue. I think it would be in the interests of all states and everyone in Russia, Ukraine, and the European Union.

Stanislav Natanzon: Mr President, Russia responds to attempted external restrictions by stimulating its domestic development. You spoke about this at length today. Last year, as we understand, was not an easy one for the entire world. Regrettably, the pandemic has killed and continues to kill many people.

The world, in effect, has split into two large camps: countries that have the money and technologies to save lives and treat people, and those lacking all that, with real tragedies happening over there. I am referring not only to regions that are located far from Europe, such as Latin America or Africa… We have Eastern European neighbours that found themselves in a very difficult situation, for example, Ukraine.

Russia, despite what many might have thought only ten years ago, is in the first category: Russia has money and technologies. Russia was the first to invent and register a vaccine, and it is conducting a large-scale widely accessible vaccination campaign, and so on. Our country has money to stimulate and support the economy. But at the same time, when the last year, a very trying one, came to an end, it turned out that Russia’s reserves had grown, while the federal budget – the Finance Minister, Anton Siluanov, is in this room, and I think he will confirm this, for he said as much – was left with one trillion rubles in unspent funds.

I think the investors in this room may ask: Why would private investors believe they should invest in Russia, if the Russian authorities themselves salt away their money and underfund their own economy?

Vladimir Putin: I do not quite understand this logic. The thing is, we did not spend the entire funds we had planned to utilise, as some experts say. There is nothing unusual here because this happens quite often. This is a case of money being set aside for specific purposes, but later this money is either not allocated or not utilised, because the operators that planned certain project-related spending may prove unprepared to accept the money and start on their projects. This is a common economic practice. Frankly speaking, there is nothing unusual about this.

However, it is true that we have the necessary resources. We will have a surplus budget this year. We have a trade balance with a decent surplus. Mr Siluanov might correct me, but I think there is around $146 billion there. Our gold and foreign exchange reserves are at over $600 billion now and growing, and the National Welfare Fund has around $159 billion. Those are the approximate figures, I may be mistaken in the details, but this is not important. These reserves are growing and this is what matters.

We decided that if the liquid portion of the National Welfare Fund exceeds 7 percent of GDP, we will spend money primarily on large infrastructure projects. But they must be properly prepared, and we must do the maths. We should not, like a rural seeder, mindlessly scatter seeds left and right like in the famous painting. Therefore, everything should be calculated and rationally spent, with maximum effect. Actually, this explains everything, rather than greed and unwillingness to spend.

Stanislav Natanzon: Then, perhaps, I will frame my question in a more straightforward manner, although I am not sure the interpreters will find it easier to translate: Is Russia going to open up the money box?

Vladimir Putin: This is what we are doing. We have already allocated significant funds from the NWF. I am sure the Finance Minister spoke, and our other colleagues from the Government must have mentioned it.

I cannot give you an exact figure now, I might be off a little, but hundreds of billions of rubles have been released for the infrastructure projects and other large projects. True, we are trying to invest them in projects that will make profit. Maybe not today, not in a year, but these projects will pay back in the long term. From an economic point of view, this is the right approach in the interests of the state.

We are already doing this and will continue to do so. These projects concern rail transport and the construction of roads, ring roads, and so on. We are already doing this. By all means, we are making these funds available for developing industrial production and building large industrial projects and facilities. Mr Mikhelson, I believe, received it. Did Novatek receive money? You see. It was for liquefying gas in cooperation with our partners from China and France. Russia supports this type of projects and releases these funds, including from the National Welfare Fund.

Stanislav Natanzon: Many businesspeople think high interest rates are one of Russia’s big problems.

Famous blogger Oleg Deripaska wrote in his Telegram channel – I do not know whether you read him or not…

Vladimir Putin: No, I do not read him.

Stanislav Natanzon: …but he keeps writing in his Telegram channel about the Central Bank: he complains that the Central Bank stints money for business, that interest rates are too high and it is impossible to develop.

Can you comment on blogger Oleg Deripaska?

Vladimir Putin: I can.

Naturally, those who take money want to do this cheaper. Those who give money, especially the Central Bank, must watch macroeconomic indicators.

Macroeconomic indicators and, generally speaking, what problems do we have in Russia today? I spoke with some of my colleagues about this yesterday and even today in the morning. At present we have two most urgent problems: the labour market – we must restore it to at least 4.7 percent to match the pre-pandemic level, and now it is 5.2 percent. The second problem is inflation, which stands at 5.8 percent. I think experts will agree it would be good if inflation fell to around 5 percent, may be a bit lower in 2021.

Therefore, the Central Bank kept its rate at a low level for our economy for a long time. It is compelled to respond to what is happening in the economy in general, getting the maximum from liquidity as well. Mr Deripaska knows this. He is an experienced and successful businessperson. Of course, he wants to get it cheaper and cheaper. The truth lies in the balance of these interests.

Stanislav Natanzon: And they say our authorities do not see bloggers’ comments.

One more problem which business discusses a lot, considering it is one of the biggest, is pressure from security agencies. Sometimes this problem becomes international, if we recall, for instance, the Michael Calvey case and some others. This case is not over yet, by the way. Human rights activists, including your business ombudsman report that a record number of entrepreneurs are currently in Moscow’s pre-trial detention facilities.

This is not only in Moscow. Once I made a programme about such entrepreneurs. One of them was from the Republic of Komi, and his name is Georgy Popov. He has been waiting for a verdict in a detention facility for four years, but there is no verdict yet.

Once you said, I quote: “All of us seem to think that if things are put right with a firm and tough hand, everyone’s life will become better, more comfortable and more secure. In reality, this comfort will expire in a jiffy because this tough hand will start strangling us in no time.” Has it started?

Vladimir Putin: Did I say that?

Stanislav Natanzon: Yes, you said it in 1996.

Vladimir Putin: I do not feel that.

Stanislav Natanzon: There is no stranglehold, is there?

Vladimir Putin: No.

But issues related to law enforcement are really essential and we must, in fact, focus on this. You know my attitude; law enforcement agencies should safeguard the interests of the state and society, and of this country’s citizens. Entrepreneurs are also citizens and they are engaged in very important business: they maintain economic activity, create jobs, and the level of people’s incomes and real pay are largely dependent on them. This is why I say this time and again: We must follow closely what is going on. It is for this reason that the ombudsman’s office has been created with the task of monitoring the observance of the rights of entrepreneurs.

I think you will agree with me that the value of an entrepreneur in itself does not give anyone the right to breach the law that is now in effect. This is why, of course, we should improve our legal system. Lately, we have made many different decisions, including those of a regulatory nature. We have enhanced the role of the Prosecutor General’s Office in this work, in supervising the activities of the operational and investigative agencies. I hope this will play a part after all.

As far as the so-called prison population is concerned, let me draw your attention to the fact that it has dwindled almost by half in Russia in recent years. Therefore, generally the legal system is being improved.

Stanislav Natanzon: But irrespective of business, do you think a person who has committed no violent crime should linger in jail for four years before being sentenced?

Vladimir Putin: You know, this is a specific case that needs to be investigated; I cannot just simply comment on it. Since you have raised this issue, I will focus on it. Of course, the faster these processes proceed, the sooner the investigation and court action come to an end, the better.

Stanislav Natanzon: About the Russian investment climate.

Your Highness, I would like to ask you a question. Qatar invests a lot in Russia, in the most diverse sectors of its economy, primarily in the energy sector, but not only there. Could you please tell us which Russian economic sectors Qatar sees as promising, and why? And, speaking of mutual projects, what attracts Russian investors in Qatar?

Sheikh Tamim bin Hamad Al Thani: Qatar ranks among major investors in Russia, with about $12 billion. We invest in the most diverse sectors, including in infrastructure and in the energy sector. Some Russian companies operate in Qatar.

We have confidence in the Russian economy, in these tremendous investment volumes and their capabilities. We maintain permanent contacts with the relevant agencies in Russia while searching for opportunities to facilitate Russian corporate investment in Qatar.

As I have already said in my remarks, we will double our investment in Russia. This amounts to the most diverse investment in Russia.

This question is also very important in connection with the upcoming 2022 FIFA World Cup.

We also devote substantial attention to tourism. Qatari tourists would like to visit many places in Russia. I believe that Russian tourists would also be happy to come to Qatar. Once life gets back to normal after COVID, I believe that we will invest heavily in both countries’ tourism industry.

Thank you.

Stanislav Natanzon: Naturally, the medical sector now receives large-scale investment.

Mr Chancellor, I have read the results of opinion polls. In March, the Research Affairs Institute polled respondents in Austria. In all, 69 percent of your country’s residents would support purchases of Russia’s Sputnik V vaccine. We know that you have even initiated talks with the Russian Direct Investment Fund to arrange such purchases.

In your opening remarks, you said that it should not matter where the vaccine comes from, be it Russia, the United States or China. In reality, we see a somewhat different picture. We can see that, as far as the European Union is concerned, it does matter where the vaccine comes from.

Would you tell us whether Europe is politicising the vaccine issue?

Sebastian Kurz: For us, this is not a political subject, but as I mentioned in my remarks: when it comes to the vaccine, geopolitical implications should not be considered. I am very pleased that in many countries, companies have succeeded in developing these vaccines. Indeed, Sputnik V appeared on the market very early, like Moderna and some of the other products from Germany, other vaccines.

We can use different vaccines, you are right. We had a very good discussion with our Russian partners in Austria and talked about purchasing Sputnik, but unfortunately, from a legal standpoint, vaccines can only be used when they are admitted to the European market through specific institutions. This has been the case for a while with other vaccines, and it continues.

As for Sputnik, I hope this testing will be completed as well. If we had been given permission to do it earlier, then of course, we could have purchased Sputnik and used it, which would have expedited the vaccination process in Austria. But we have not received this approval yet. To protect our people, we are using vaccines that have been approved for use in the EU.

Unfortunately, so far we have vaccinated only about half of the people over 60, which is above average compared to other European countries. Of course, we have seen a decline in the death toll and in the incidence rate. In Austria, contagion is down. Compared to other European countries, we are in good shape.

We hope that this will help us, and that we will be able to open up our society soon and, thanks to this, we will be able to expand the economy and tourism, as just mentioned, because it is a very important industry for Austria, we will be able to engage in tourism again and invite visitors from all over the world.

We hope that many Russians will come to our country again to spend their vacations with us. We hope that we will be able to restore all this soon. It is very good when people from different countries get together and communicate with each other, and it is very important for the economy.

Stanislav Natanzon: Mr Chancellor, in the European Union 90 percent of the vaccines are purchased from one producer.

Russia has four vaccines, so there is no monopoly as distinct from the EU where there is a monopoly of one producer. Importantly, to the best of our knowledge, agreements with this producer relieve it of liability for its vaccine. Moreover, the long-term effect of the mRNA vaccine technology is also unknown.

The EU is artificially creating a vaccine monopoly with one dominant player. Do you see the risks of this for the EU?

Sebastian Kurz: I must say I am well familiar with this situation. I have been dealing with all problems related to the pandemic for one year already. Of course, the vaccine is a very important issue both in the EU and in Europe.

As you know, we are using many vaccines in Austria. We are using other vaccines as well, Moderna and others. We will approve the use of other vaccines. We must talk more about this.

Inside the EU, we are trying to expedite the approval of other vaccines because we need to protect our population. Of course, we are monitoring these processes in the EU.

You rightly said that Sputnik has not yet been endorsed. We regret this. We would be willing to buy Sputnik for Austria and use it but, as I have already said, in Austria we can only use the vaccines that were approved for use in the EU.

I am convinced that soon Sputnik will be approved for use. I was told it is already being used in over 60 countries. I hope this will happen in the EU as well. I believe any effective and safe vaccine will be used.

I think we are following the right road in international cooperation and will not allow a monopoly. It does not exist. But, as you rightly said, Sputnik is not yet allowed. Since it is already being used in many countries around the world, I hope it will get approval in Europe as well.

Stanislav Natanzon: Mr President, when you read headlines or statements from European politicians, not Sebastian Kurtz, but others who say that the vaccine is a Russian weapon, the vaccine is a Russian pressure tool, what do you think?

Vladimir Putin: I think it is competition for money on the part of those who make similar products in other countries and want to enter the European market. They do this with their usual brilliance. They are good at it.

It is not just about reading headlines. I will not mention names, well, I was talking with one EU leader, and he said to me, you want to split our countries apart and strike separate deals. Why don't you apply to the relevant European agency? I say, we already did. He says, no you didn’t. I say, yes we did. He says, no. I say, maybe I am wrong, and immediately, I call Golikova and ask her if we have applied. She says, of course we did, last year. And only in March, the relevant European agency announced it was starting the review procedure. As you see, they are still reviewing it.

Stanislav Natanzon: It is difficult to review.

Vladimir Putin: What does that mean? It is about certain interests, and those engaged in the same industry ensure their interests by securing the market for companies they have been working with for many years. It is a layered system of mutual interests, but I will not go into details now.

What you just said about politics is just a tool for ensuring commercial interests, that's all. Apart from this, there is nothing else there.

Different European countries behave differently, and not necessarily for political reasons, but because some of them have the appropriate national agencies, labs that evaluate pharmaceuticals, while others don’t, and they have to wait for the European regulator’s decision. Those who have labs, they make their own decision like Hungary, for example. Hungary has certified and is rolling out Sputnik V.

I know a political agenda is always present, to some extent, but in this case, I would say we are mostly dealing with economic, commercial interests that are hurting the interests of the citizens of European countries.

Stanislav Natanzon: Russia was the first to invent and register the coronavirus vaccine. Of course, it is telling that it is called “Sputnik” just like the first Soviet satellite, we all understand this analogy. The first man in space, again, comes from the same land.

Back then, when space was being conquered, the entire country was fascinated by cosmonautics, and now, during the era of vaccination, for some reason, Russians are not really in a hurry to get vaccinated. Why?

Vladimir Putin: You see, there are many reasons. Not everyone gets the flu jab in our country. That is the general attitude of the public.

I already said in my speech that we are ready to give a jab to everyone who is willing to get vaccinated, we will not force anyone. It is possible and necessary to encourage people to do so, perhaps it is even better if we do so. In many countries, those who get vaccinated get a free beer, or they come up with other incentives.

One can act in more civilised ways, I suppose. The most important thing here is to make sure that people understand the need, the advantages and the safety of vaccination. Apparently, we are not doing enough. We must work on ourselves first of all, I mean the bodies of authority and governance.

Stanislav Natanzon: Getting brewers involved could be a great idea, though …

Vladimir Putin: Maybe. Get a jab then get some beer and sausage – this can be done. (Laughter)

Stanislav Natanzon: Now, Mr President, on to something that the entire world is interested in today – your meeting with Joe Biden.

Please share with us what are you going to discuss with the US President?

Vladimir Putin: We will discuss bilateral issues. I believe we must try to find ways to settle our relations. Today, they are at an extremely low level, and we are all well aware of it.

We will discuss strategic stability, the settlement of international conflicts in the hot spots that cause our greatest concern, disarmament processes, fighting terrorism, and, I hope, fighting against the pandemic and the issue of the environment. This is a tentative agenda.

Stanislav Natanzon: When you had a meeting with the previous US President, Donald Trump, in 2018, just before the end of the World Cup, there were huge expectations that, perhaps, things would somehow improve. But after that meeting, it appears, even more sanctions were imposed than before. Should we expect the same now?

Vladimir Putin: You should ask Biden about that, I do not know. We are not imposing any sanctions. We respond only when we believe it is advisable to do so, so as not to harm ourselves, not to shoot ourselves in the foot.

Why our US partners are doing what they have been doing so far remains largely a mystery. I believe, I am even confident that this is primarily happening under the influence of their internal political processes. To a certain extent, Russia-US relations have become hostage to the domestic political processes in the United States.

I hope it will come to an end sooner or later. I mean that fundamental interests in security, strategic stability and the reduction of weapons that represent danger for the entire world are still more important than the current domestic political situation in the United States.

Stanislav Natanzon: Mr Chancellor, we all know that an EU-US summit will take place one day before Vladimir Putin’s meeting with Joe Biden. The US President will attend this summit. In fact, he will leave for the meeting with Vladimir Putin from it.

There is a lot of talk and leaks in the press that this summit is all but designed to lay a mine under the Russia-US meeting, that it may adopt a strongly anti-Russia declaration or attack Russia with tough statements. Can you say what we should expect from the EU-US summit?

Sebastian Kurz: I do not think it will look like this. I do not believe the EU-Joe Biden meeting will concern Russia. This topic will not be at the forefront.

Our goal is to pursue and enhance our multilateral cooperation with the United States in many areas. This amounts to general international efforts.

First, these will be the issues of climate and its protection. We are sure the United States will recognise the Paris Agreement, contribute to countering climate change and reduce carbon-dioxide emissions. This is what we are expecting.

The climate does not care where emissions come from. Obviously, such a small country as Austria is willing to contribute. But if we do our part and the United States does not, it will look too dramatic. We think the US is meeting the EU for this purpose as well. They have already announced it. We hope the US will contribute to countering climate change. These are items on the agenda for our conversation. The meeting will take place on June 15.

I can say more about the meeting between the Russian and US presidents. We are a small, neutral country, and we have traditionally good relations with the West and the East. This is why we are positive in this respect. We see that relations between the superpowers are not always good. We are very glad that such a meeting will take place and that the talks will lay a good foundation. We are looking forward to the results of this meeting.

As for Joe Biden’s meeting in the EU, we are sure, Mr Moderator, that everything will be the way I described it.

Stanislav Natanzon: To be honest, we have forgotten during the past few years that Russia can be omitted from the agenda of such meetings. Quite to the contrary, we have grown used to Russia being among the top issues. Let’s wait and see how it will be.

Mr President, differences between Russia and the US include Russia’s alleged interference in the US elections. Recently, the United States frequently accused Russia of this interference. Meanwhile, Russia accuses the US if interfering in elections in Russia through NGOs, and not just in Russia.

In fact, this is not only a Russian-US problem. Take a look at a recent story, when the US Ambassador in Moldova met and held discussions with the head of the Moldova Central Election Commission and Prosecutor General on the eve of the election.

Hence my question. Since technologies, including election technologies, are becoming global, maybe the time has come to determine at a global level what should be regarded as interference and who ambassadors can meet with, and to coordinate unified rules? Is this possible?

Vladimir Putin: Theoretically, yes, but improbable at the practical level.

What is actually the problem? You mentioned differences, but we don’t have any differences with the United States. Our only disagreement is that the United States wants to restrain our development and has said this openly. Everything else stems from this position, including economic restrictions and attempts to influence internal political developments in our country based on forces they regard as their supporters. End of story.

Of course, we are monitoring the developments there. But we never interfere, we never meddle.

Much is being said now about the elections and political processes in Russia and several other countries. Elections have been held in the United States as well, and nearly half of the US voters believe that the elections were unfair. You can see this from the polls conducted in the United States by American pollsters. We did not invent this, you see? Why should we invent anything? We are not to blame for these results. We did not say this. It is the result of the polls held by American companies.

Some people were disappointed. You are well aware of what happened at the beginning of the year, when protesters stormed the Congress. Is this good or bad? There is nothing good in this. But they were not just looters or rioters. They had political demands, right? Right. As many as 450 people have been detained; criminal action has been initiated against them. Seventy people were detained immediately, and 31 of them remain under arrest to this day. On what grounds? Has anyone told us anything about this? No. But this is part of politics. Harsh charges have been levelled at many of these people, all the way to a conspiracy to seize power. Why?

Now let us not talk about Russia. Belarus, too, has many internal problems. We would like to take a neutral position; in fact, it is all up to the Belarusian people, it is their business. But the same things there are viewed from a different angle, while what is happening in the States is assessed differently. Double standards. Those should be eliminated.

Or, they say Russian law enforcement officers act too harshly during some street rallies. Now, what about shooting protesters with rubber bullets in European countries, knocking out people's eyes, killing people on the streets, using water cannons, or tear gas – is this normal?

I was speaking with a colleague of mine, one of our partners – also without names – about Belarus. I ask him, “How about your country? Is this allowed?” And he says, “We are a democratic country.”

This is ridiculous, you know. So a rubber bullet knocks out a person’s eye, and you just tell the victim – it is okay, this is a democratic rubber bullet, it is all right. But this does not make people feel any better, does it?

We need common standards, approaches and assessments that are uniformly understood. Can this be achieved? I would say it is highly unlikely, I mean because these things are being used as political pressure tools. But we need to strive for this. You know, we have all sorts of jokes about things that are impossible to be done but you should “strive” for them. So, just strive for this if there is nothing else you can do.

Stanislav Natanzon: Mr President, you embarked on a dangerous path in the first part of your remarks – you seemed to be defending those who broke into buildings on Capitol Hill. Social media can interpret this as support for the rioters and block your accounts. Maybe not your accounts, but kremlin.ru, I mean.

Vladimir Putin: Firstly, I said right away I did not think what they did was good; you might not have been paying attention.

Secondly, I offered no assessments of the event. I was talking about what followed.

And thirdly, I do not care if they block me on some platform. I have more important things to care about – the Russian people’s confidence in me in this capacity.

Stanislav Natanzon: Mr Chancellor, can you explain this? There were large protests in Belarus. They were cruelly suppressed and we covered this. There were large protests in the US. They were cruelly suppressed and we covered those. But the EU denounced the crackdown on the protests in Belarus and introduced fairly tough sanctions against it. The EU did not recognise the victory of Belarusian President Lukashenko. At the same time, the EU did not denounce similar actions in the US and did recognise the US President.

Can you explain the difference?

Sebastian Kurz: I see many differences. To be honest, I think we cannot compare these events.

On the one hand, we had very good contacts and cooperation with Belarus, but I still think the election was not fair or honest.

We were particularly indignant at the forced landing of the Ryanair plane and the arrest of the journalist. We, Austria and the EU, do not want to close our eyes to this and we have deliberately responded with sanctions.

We hope the situation in Belarus will change. Nobody is interested in rocking or destabilising the situation. However, we must ensure democratisation. This is important. Changes must take place for the better.

Certainly, this is an issue on which our opinions may not coincide, but we are very worried about the events in Belarus. We considered it necessary to take steps on behalf of the EU, that is, introduce these sanctions. We would feel better if the situation changed, and we would like it to change. We have economic interests in Belarus and this is why we are very interested in an improvement in the situation there. We would like to see Belarus follow the best development path and promote its civil society. We do not want journalists to be prosecuted; it is important to recognise the right to a different opinion and avoid such a tough response.

I must mention the issue of double standards. There are other examples as well. We do not think similar events can be considered normal in one country and denounced in another. This is a very important point. I insist that the situation at the Capitol cannot be compared [to what happened in Belarus]. Of course, these were dramatic events for both countries. This was a blow to US democracy. Law enforcement units had to be used to ensure security. It was not politically motivated.

Stanislav Natanzon: Mr Chancellor, I would like to clarify one point. You said the EU is against the detention of Roman Protasevich in Belarus. But do you know that Protasevich, whom you simply called a journalist, fought in the Azov battalion? It was the US Congress, not Russia, that demanded blacklisting them as a terrorist group. Their symbol is a variation of the swastika. So, this man fought with a swastika on his shoulder. What do you think about this?

Sebastian Kurz: He is not a terrorist; he is a blogger and a journalist. Even if someone does not like his opinion, he has the right to express it. I can repeat that forcing a plane to land, arresting people and knocking confessions out of them, this is not considered normal.

If we take an unbiased look at the situation, we are a neutral country and have traditionally good relations with Belarus. We have many contacts. We believe there is a line and it is necessary to distinguish one thing from another. This line must not be crossed. Otherwise, we will react with the EU measures we are taking. We consider it unacceptable to cross this line. It would be great to prevent such situations altogether in the future. We must do without this. These standards must be observed everywhere.

Stanislav Natanzon: Mr President, you spent the past weekend with the President of Belarus.

First, I would like to ask if you believe the story with Hamas, that the plane was forced to land in Belarus because of an alleged email from Hamas? What is the Belarusian authorities’ official explanation?

Vladimir Putin: You see, I don’t want to make any judgement on what happened in the United States or on what happened with that flight. Frankly, I don’t know.

Stanislav Natanzon: Were Russian security services involved in this operation?

Vladimir Putin: No, of course not.

I have seen a statement from NATO leadership to the effect that Russia must have been involved. Well, I can only say to this that NATO is in danger if their leaders make such statements, because it means they are simply not aware of how processes like this work.

This is done very differently, not at all how some people think it is done. No international cooperation is possible in such things, you see? In Moscow, we detained people who were planning a coup and Lukashenko’s assassination, but we did this at the request of the Belarusian KGB.

As the President of Belarus told me, they did not plan any operation like this. They only received information that this person was on that flight after his picture had been posted online. I don’t want to get involved in this matter, you know? This does not concern us at all.

Let me repeat, I don’t want to offer any evaluation of the political processes underway in Belarus. The truth is, as usual, somewhere in the middle.

Thus, it’s better not to interfere, it is better to give people time to grapple with their problems. Anyway, no matter what others say about a regime suppressing people, social change will only take place in keeping with the objective circumstances that are related to the development of a given society. It is no good interfering, never.

As for planes, I would like to remind you that a world leader’s plane was forced to land.

Stanislav Natanzon: The plane of Evo Morales.

Vladimir Putin: Yes, you are right, it was Evo Morales.

He was invited to disembark, and a head of state’s plane was searched. Nobody wants to talk about this, as if it never happened. But it did happen, and it has actually happened more than once, and not only with a presidential plane.

But with this, it took on an incredible form and was given a lot of attention. The reason is obvious. It is not only that developments in Belarus attract much attention, but also that many of our neighbours would like to influence them. Not that it is prohibited to notice things, but it is better not to interfere in others’ internal affairs. This is what I wanted to say.

Stanislav Natanzon: As for Evo Morales, I talked with him about that story. He and his team regard this as a national humiliation. But they are trying to downplay the story, so nobody thinks about it because there is nothing they could do about it.

Getting back to the Ryanair aircraft, Roman Protasevich was on the national wanted list, which is why he was detained.

Vladimir Putin: Stanislav, sorry for interrupting you.

We have a huge audience here. St Petersburg is hosting an international economic forum, and you are pestering us with these questions, me and the Chancellor. Who is Roman Protasevich? I neither know nor care about him, let him do what he wants, fight Lukashenko’s regime…

Stanislav Natanzon: I am not talking about him, actually.

There are people on Russia’s wanted list. Would Russia force a plane, for example, a flight from London to Thailand, to land if there was a wanted person on board? The London-Thailand flight goes across Russia.

Vladimir Putin: I will not say.

Stanislav Natanzon: All right.

Let us talk about the economy then, back to the economy. How deep will the economic – and not just economic – integration be between Russia and Belarus?

Vladimir Putin: We have a fairly high level of mutual trade, almost $30 billion. It is quite a large figure for Belarus, with a population of 10 million. This already says a lot. We have broad cooperation, industrial cooperation first of all. I believe this is very important. We will expand it further, and we will go about this as it is done anywhere else in the world – we will look for options and ways of working together that would meet the interests of both countries. We have every reason to believe we will be able to achieve this in industry, agriculture and energy. In this sense, we are no different from the rest of the world – the buyer wants a cheaper bargain, and the seller does not want to undersell.

We are going to find optimal solutions as part of the Union State as well as in the EAEU. We have certain plans for the coming years, including some in the energy sector that should be implemented by 2024.

We are keeping with this plan. Yes, we argue. Yes, we sometimes disagree or are dissatisfied with each other, but overall, the work is being done in a positive manner and with good results.

Stanislav Natanzon: Another important economic issue is the tax system in Russia. You have said more than once that a stable tax system is a signal to business; it is very important for businesses because they can make long-term forecasts.

Meanwhile, we remember that Russia upped the VAT in 2020, and personal income tax this year. Now there is talk about the Government intending to observe large companies for a while to see how they pay dividends and, perhaps, to impose an additional tax on them if they are too greedy, a “tax on greed.”

Just days before the forum, reports said the Government might charge an additional 100 billion rubles from metallurgy companies, because the Government believes the metals sector has conned the state – this is not my quote –out of 100 billion rubles.

Vladimir Putin: To begin with, our tax system is generally stable. Indeed, the government must respond to what’s happening around the world and in our economy and do it carefully on a case-by-case basis so the entire fabric of economic relations in the country is not damaged.

You mentioned tax increases [in some cases]. Earlier today, I also talked about tax cuts, for example, I said that small and medium companies in retail and restaurants would not pay VAT. This is what I said earlier. There have been both tax cuts and tax increases but, overall, the situation can be described as balanced. What we need to keep in mind is that we keep the fiscal load affordable and stable. By and large, the government has managed to achieve this.

As for metals manufacturers, I am asking my colleagues – I know them by name as we have been acquainted for many years – to not be offended by Mr Belousov. He might have sounded somewhat sharp in the heat of the debate. Why is that? The fact of the matter is that the situation in the market has changed, and the industry began taking in excess profits. It’s quite obvious. Then, of course, this industry wants high profitability not only from exports but domestically as well. It’s understandable; why should they lose money if they can earn it?

On the other hand, this can lead to some imbalances in the economy. Why? For example, a company wants to buy vehicles and they sign contracts and are ready to pay, but the vehicle manufacturer says, “You need to pay 68 percent more.” The buyer asks, “Why?” The reply is: “Because the cost of steel has gone up.” Then the entire chain falls apart. The same goes for the defence and construction sectors, etc. This is not just in steel, it affects many industries, including, say, the energy sector and the oil industry. As soon as prices increase in world markets, there are also attempts to boost prices in the domestic market. No sooner had the price of wheat [in the world market] gone up than it started to climb in the domestic market as well, pushing up the price of bread.

I talked about one of our problems today: inflation. The problem can also be ascribed to, among other things, inflation. We should keep this in mind. There are well-known tools that can help smooth out these problems, including customs and tariff policy and other related measures. We take this approach, for example, with the oil industry, where the managers have already worked out a certain action algorithm, so that their industry is not affected too much either: when prices go down relations between the sector and the government are adjusted accordingly, and when prices go up, they are also adjusted accordingly.

The same can be done in the metals industry. We might switch to long-term contracts, for example, with defence plants or construction companies. These so-called anchor orders are also important for the steel industry. If they know certain sales are guaranteed, it means a lot, including for the development of our major metals manufacturers. This would not necessarily be fixed-price contracts, it would be enough to set out certain rules and develop a pricing plan, and that would work. It is important to do this at the right time and then the right algorithm would be developed.

Stanislav Natanzon: Ladies and gentlemen, we must quietly finish our very interesting conversation. Allow me to ask the final question.

We live in an incredible world where everything, all standard laws and rules seem to be collapsing. This is only positive for us, journalists, because we always have something to talk about. We are seeing that even powerhouse organisations like the WTO, for example, are being destroyed by sanctions. We are seeing that even the UN finds it difficult to cope with all this.

Here is my last question for all of you: how do you visualise the post-pandemic world? Please be as brief as possible. What will the world’s main configuration be, in what way might it change?

Mr Chancellor, let’s start with you.

Sebastian Kurz: I have learned one lesson from the pandemic. We, people, will always face a challenge. It would be good if we tried countering our challenges together without creating additional problems as we do sometimes, unfortunately. This is a proposal for an international effort and for peaceful cooperation.

At the beginning of the pandemic, a lot was said to the effect that after the pandemic everything would be difficult, that it would not be what it was, that people would not travel, that there would not be any major public events and many other things. However, I think the opposite is happening. I have the impression that due to the vaccine the disease rate in Austria has gone down and that the world is returning to what it was before. People want personal contact; they want to socialise with each other. It seems to me that after the pandemic our world will be about the same as it was before. We will simply return to normal.

The main thing is to do this as quickly as we can, to achieve economic success and restore our economy. I think the pandemic may become a lesson for us about the importance of being healthy, attentive and considerate towards the entire world.

Of course, this pandemic has shown us that we must work for economic recovery and focus on areas like digitisation and environmental protection. We must work hard on these things. That’s what I think.

Stanislav Natanzon: Is there anything you would like to add to that, Your Highness? Your view on the post-pandemic world.

Tamim bin Hamad Al Thani: Of course, we are still living amid the pandemic. Many major economies, many countries have suffered, but some countries have already shown visible signs of economic recovery. In Qatar, and I am proud to say it, we have been able to overcome many problems associated with harmful influences. Now we have great experience in dealing with situations like this by taking quick and effective action.

Of course, international cooperation is important, especially when it comes to producing new vaccines and distributing them throughout the world. We want to get it over with as soon as possible. Everyone around the world should have equal access to all vaccines. Legislators and other specialists must do their part in order for us to be able to fulfill this goal.

Indeed, the world could change, but I would like to share the opinion of my friend, the Federal Chancellor of Austria, that, above all, we will have great experience as a result, and we will be able to cope faster with problems like this in the future.

Thank you.

Stanislav Natanzon: Mr President, how will the world change?

Vladimir Putin: First, the pandemic has shown us all how vulnerable we are – this is my first point.

Second, we have realised the role and importance of science and high technologies, as well as joint efforts in overcoming common crises. We have come to realise that we can only achieve the results we need if we join our efforts.

The pandemic has certainly given a boost to high-tech and advanced types of production and to what determines and what will determine progress in the near future – I am referring to artificial intelligence, information technology, and so on.

But, in my opinion, the most important thing is that we realised that good health and human communication are of the highest value. We all lacked this during the pandemic and are still lacking it. We realised that good health and human communication are our highest values.

We must keep this in mind when building our life in the near and the more distant future.

Stanislav Natanzon: Ladies and gentlemen, thank you very much.

Someone said during the forum that this time the St Petersburg International Economic Forum is reminiscent of September 1, which is the first day of school, when we reunite after not seeing each other for a long time and give each other a hug.

Let's hope that we will not have to remain apart anymore, because we can do more together.

Vladimir Putin: I want to thank you all, most notably, the Emir of Qatar and the Chancellor of the Republic of Austria, for taking part in our discussions and our event today, and wish you all the best.

Thank you.