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Excerpts from the transcript of a meeting with young entrepreneurs, engineers and researchers

President of Russia Vladimir Putin: Good afternoon, friends.

I am very happy to see you,

Today, as we see, we are at VDNKh – a large park complex where all of Russia’s best achievements in all major spheres of development have traditionally been presented for decades: achievements that have always been Russia’s pride, that have helped it stay at the leading edge of development. We can say that over the last several decades our country has come a very long way in transformation and change, and this very complex of achievements – VDNKh – shows this progress in Russia.

You are young, but perhaps many of you know that this centre of achievements from Soviet times fell into a state of disrepair and was used for a cheap marketplace, but gradually, as the situation in the country improved, so did VDNKh. And now here we are, reviving the basic idea on which this exhibition centre was founded, which provides a place for you and people like you – young, beautiful, good-looking, smart, creative, and ambitious – to demonstrate your achievements. This is happening on a new basis, but still in a variety of areas.

Our meeting is being held in advance of the St Petersburg International Economic Forum, and I have asked my office and my colleagues from the Government to organise this meeting to hear your ideas on where we are now, where we are going and what we need to do to ensure our absolute and unconditional progress, to make it beneficial for the country and everyone involved in this remarkable process.

And I promise that I will try to respond to all your proposals and ideas. It is easier for me to do this than for you. I just give instructions; you need to come up with ideas, while I just need to listen to you and give instructions. (Laughter.)

This will certainly help me and my colleagues understand how we should organise work at the St Petersburg Economic Forum.

I would like to begin by saying the following. We live in an era of change; this is obvious to everyone; everyone understands and sees this. Geopolitical, scientific and technological transformations are happening. The world is changing, and it is doing so rapidly. In order to claim some kind of leadership – I am not even talking about global leadership, I mean leadership in any area – any country, any people, any ethnic group should ensure their sovereignty. Because there is no in-between, no intermediate state: either a country is sovereign, or it is a colony, no matter what the colonies are called.

I am not going to give any examples so as not to offend anyone, but if a country or a group of countries is not able to make sovereign decisions, then it is already a colony to a certain extent. But a colony has no historical prospects, no chance for survival in this tough geopolitical struggle. There has always been such a struggle (I just want to make it clear); it is not that we are looking at what is happening around us and saying “Wow!” It has always been like that, you see, and Russia has always remained at the forefront of ongoing events.

Yes, there were eras in the history of our country when we had to retreat, but only in order to mobilise and move forward, concentrate and move forward.

Sovereignty, in the modern sense of the word – actually, it has always been like that, but it is particularly clear today – comprises several components.

First, there is military-political sovereignty, and here, no doubt, it is important to be able to make sovereign domestic and foreign policy decisions and to ensure security.

Second is economic sovereignty where the development of the basic sectors of the economy does not depend on anyone in terms of critical technology or matters that underlie the viability of society and the state.

Technical sovereignty and social sovereignty are critically important in today’s world. I am talking about the ability of society to come together to resolve national challenges, to respect history, culture, language, and all the ethnicities that share a single territory. This consolidation of society is one of the core conditions for growth. Without consolidation, things will fall apart.

There may be other components of sovereignty, I gave you the basic ones, and it is clear that all these things are interconnected. I gave you a list of four components. In fact, you could reverse the order and start from the last one and go backwards, and then list them randomly, because one cannot exist without the other. How do you achieve external security without technological capability and technological sovereignty? It is impossible.

We would never have hypersonic weapons if it were not for the capabilities of our science and industry. Never. You understand that fully only when you start dealing with these things directly. So, when we got hypersonic weapons, I asked for a list of developers to give awards to. I have already said this publicly before, but I will tell you again. They brought me a thick folder. I started flipping through it, but I saw that there were no peoples’ names, only names of enterprises, design bureaus and research institutes. Frankly, even I was surprised. I asked the person who brought it to me what it was all about. He said that without even one name on that list, the product would not have been possible. Thousands of people worked on it, see? Thousands. And then I realised the depth and the capabilities of our defence industry.

The same is true of the economy in general. A limping, sneezing and coughing economy is the end of it. What kind of consolidation of society can we then talk about? And if there is no consolidation, there will be nothing else, either.

In order to be able to effectively possess and use all of that, it is necessary to address basic tasks, such as demography, which means healthcare, environment, research, education and upbringing, which is very important.

Some time ago I had a discussion with the Patriarch about education, and he happened to say that even though education was indeed crucial, without proper upbringing we would not succeed at anything, because you can teach a person something, but the question is how they will use their knowledge. Science, education, upbringing, and health care are critically important, because without them demographic issues cannot be resolved, and so on. What about culture? If we do not rely on the basic values of the national cultures of the peoples of Russia, we will not consolidate our society. Without consolidation, everything will fall apart. And the fact that we have to sort of defend ourselves and fight for it is obvious.

We visited the exhibition dedicated to the 350^th birth anniversary of Peter the Great. Almost nothing has changed. It is a remarkable thing. You come to this realisation, this understanding.

Peter the Great waged the Great Northern War for 21 years. On the face of it, he was at war with Sweden taking something away from it… He was not taking away anything, he was returning. This is how it was. The areas around Lake Ladoga, where St Petersburg was founded. When he founded the new capital, none of the European countries recognised this territory as part of Russia; everyone recognised it as part of Sweden. However, from time immemorial, the Slavs lived there along with the Finno-Ugric peoples, and this territory was under Russia’s control. The same is true of the western direction, Narva and his first campaigns. Why would he go there? He was returning and reinforcing, that is what he was doing.

Clearly, it fell to our lot to return and reinforce as well. And if we operate on the premise that these basic values constitute the basis of our existence, we will certainly succeed in achieving our goals.

You are experts in your fields, and I want to apologise upfront if I am unable to answer some of your questions. As a matter of fact, I would like to listen to your ideas in order to keep them in mind when organising the St Petersburg Economic Forum rather than turn our meeting into a Q&A session.

I would like to close my lengthy monologue with that and turn the floor over to our moderator. Please go ahead.

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Vladimir Putin: (following up on remarks by Polina Morozova, Skoltech postgraduate student and materials chemist who works on developing new-generation K-ion batteries for uninterruptible power supply for fixed systems) The first thing I would like to point out is that you used the term “closed economy.” Our economy will not be closed. We have never had one and never will. If anyone is trying to limit us in any way, they are limiting themselves in the first place.

For the sake of argument – this has nothing to do with you, but nonetheless – they are trying to put limits on our fertiliser exports only to see prices in their countries go up more than here. They tried to limit our energy exports and, again, prices went through the roof. They are already using my name instead of inflation when we have absolutely nothing to do with it. (Laughter.)

Seriously. That is the truth. We have absolutely nothing to do with it. This is the outcome of their mistakes, long-term ones at that, which they talked about every year even before today's developments. They made these mistakes themselves, and are now – excuse me, ladies – trying to cover a certain part of theirs, trying to turn this around on Russia, claiming that Russia is to blame for everything. We have nothing to do with it. They imposed restrictions and pursued their energy policies for years and decades on end, which led to the current state of affairs. And then they started imposing sanctions and aggravated the situation in these and other areas even more.

Your field is important and promising. Storing and transmitting energy using the latest high-tech methods is the future in the economy in general, in individual industries, and in the defence industry. Are you working on batteries?

Polina Morozova: Yes.

Vladimir Putin: We know what we are talking about: silent submarines and so on. This has an extremely broad range of applications.

In addition to oil and gas, rare earth metals are also here.

Should you need any additional support, we are here to help. The Ministry of Industry and Trade has a programme to support non-resource exports. We will expand these forms of support.

As for “the closed economy” as you said, I would like to say this again that we did not have a closed economy. That is, we had it in Soviet times when we isolated ourselves by creating the so-called Iron Curtain. We created it with our own hands. But we are not going to do this again and fall into the same trap. Our economy will be open. Those who do not want it will steal from themselves. They are already stealing from themselves and creating problems. If they continue following this path, they will just make a bad situation worse.

Yes, we will be short of something because those who are doing this do have certain competitive advantages, especially in modern technology. This is clear. However, the world is big and diverse. You have just mentioned China and India. But why just China and India? What about Latin America? Yes, Africa may be still “asleep” today but it is “waking up.” About 1.5 billion people live there. And what about the whole of Southeast Asia? You should understand that it is impossible to build a fence around such country as Russia from the outside. And we are not going to build such a fence around our country.

But it is certainly necessary to help such start-ups as yours to enter world markets. We will be doing this, even more so since our trade and economic ties with these countries are making steady headway.

I think our trade with China is already US$140 billion. I believe during the past year our trade with China increased by 34 percent and with India by 87 percent. Do you understand? And do you know how much our trade with Turkey has gone up in the first half year? It increased 2.3 times. It is clear why but it has its own problems – high inflation and so on but it is developing and has advantages of its own. If we work with each other and we want to do this, there is only upside. The same is true of BRICS.

Two-thirds of the planet’s population live in the regions I mentioned. Yes, some countries are only taking their first steps in some areas but they are taking them and will continue. Economic growth rates in these countries, in Asia, were about 5 percent, in the United States 1.7 percent and in the Eurozone 1 percent in the past ten years.

We also have our own problems and we are aware of them but we will keep moving rather than hide behind some fence.

But it is necessary to help people like you and we will. I will certainly discuss this with the Government and relevant structures that are in charge of supporting exports in our country. It is necessary to expand this support and we will definitely do so.

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Yury Shilov: This question is frequently asked by young entrepreneurs: what, in your opinion, are three key qualities a leader should possess?

Vladimir Putin: Three qualities… This applies to all walks of life, science, whatever you like, even education and politics.

First, you have to be devoted to your work. I know that, perhaps, many will not like hearing it but, for example, in science, there was a well-known married couple, Marie and Pierre Curie, who sacrificed their health, life, absolutely everything, to achieve something they devoted their lives to. In education, our prominent teachers in the 1930s devoted their lives to children and achieved outstanding results. There were nuclear and rocket projects in our recent history… Sergei Korolev, Igor Kurchatov – they dedicated their lives to what they were doing and, in fact, they lived and breathed it.

This does not mean that you should confine yourselves to living in a sort of box. Clearly, you should have broad knowledge but still, to a certain extent, you should be devoted to your profession and dedicate your lives to it.

Second, flexibility is important and the ability to soundly and objectively assess the results of your work and have respect for people with whom you are trying to achieve goals to which you devoted your lives. Be critical but constructive, and you can mobilise a team.

The ability to work in a team, especially if you lead a team, is a key element of success. That is basically it.

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Vladimir Putin: (in response to the remarks by Anna Krasavina, a research fellow of the Dukhov National Automatics Research Institute in charge of developing analogue systems for long-distance fibre-optic data transfer. As a developer, she is concerned over Russian microelectronics) Our Government has been trying for several years to launch or recreate Russia’s microelectronics industry. This is a complicated issue and one of the hardest blows at Russia in this entire array of restrictions.

Actually, it has always been this way since the times of the Peter the Great. The ships he built, the methods of their construction and so on were largely secret in his time. So, Peter went to the West and acquired this knowledge by working as a carpenter. This continued throughout our history. COCOM lists in Soviet times and the like. It was like this even in the best years of our cooperation with our so-called Western partners. Restrictions were preserved. Now they have simply ratcheted them up, and this is one of the main blows. We decided we could sell oil and gas and buy everything cheap. In fact, we funded their work with our cheap energy resources. This is broadly speaking, of course, but it is essentially what happened. And so, owing to these restrictions, we are compelled, thank God, to develop our own engineering schools, including in this area.

I will also take everything you said from the transcript of our conversation today and I will talk to the Prime Minister about this, because he is personally dealing with this problem at my request.

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Vladimir Putin: (answering a question from Arkady Didkovsky, head of the talented youth department, Bauman Moscow State Technical University, on what the technological Russia should look like in ten years) I believe that if we think like Tsiolkovsky, that we will fly to the stars, then we really will. And we were the first to fly there in human history. This is why such seemingly unbelievable and crazy ideas move the world forward.

As for what we should strive for in the field of science and technology, there are things that seem to be complicated, and you can talk about them all night, until the next morning. But if you look at the tasks, what tasks do we have?

Demography is the first task. We need more people, and they must be healthy. Here we have to address an entire range of issues: development of medicine, medical equipment, pharmaceutics, modern medications that will work effectively against those diseases that are already resistant to antibiotics, and so on. And this includes end-to-end, quantum and big data technologies.

By the way, although they are constantly trying to somehow pinch and insult us, implying that we are a petrol station country, in terms of processing big data, we have overtaken many.

Yes, there are things that we can be proud of even today, of course. This is why we should try to acquire new competences in everything related to people’s lives and health: medicine, ecology, end-to-end technologies, big data processing again, quantum technologies, including creating modern engineering centres on a new basis, and then we would be leaders in all these areas.

Do we have a chance? Of course, we do. We have a tradition of education that many countries lack. We have excellent scientific schools, including on mathematics. This is the foundation of all modern technologies. There are problems and issues that must be addressed in all these spheres. But we have ways to do so, and if we continue to go along this path then we will surely succeed.

Arkady Didkovsky: So will we live better in ten years?

Vladimir Putin: Yes, in the end this should result in an higher quality of life, that is correct.

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Vladimir Putin: (in response to remarks by Yekaterina Kudashkina, holder of master’s degree in agriculture, and her proposal to build an innovative selection centre involving young agriculture scientists to create new types of Russian crops and oil-bearing crops to meet market demand) First, I would like to say that this is a very interesting, relevant and important area of activity. I cannot help but remember your colleagues who worked in Leningrad under siege. It was an extraordinary story about people who starved to death but preserved collections of seeds. Many people know about this but it is a topic in and of itself that deserves to be the subject of books and films. Our film industry has addressed this matter to some extent but it deserves to always be remembered. This is my first point.

Second, as concerns domestic seeds, it is indeed a relevant matter because, as with many other areas of activity, we have forgotten something here. But we have a solid basis to build on.

For example, as far as I understand and as you will probably confirm, when it comes to wheat, our seeds are 100 percent domestic. And it is not a coincidence at all that in the past years, Russia has become a leader in annual sales of wheat. Yes, other countries such as China with 1.5 billion people and the United States with over 300 million, they produce more but they also consume more.

Meanwhile, our export potential has proven quite serious. We had 20 million tonnes, then 30 million tonnes, in 2021–2022, we are to reach around 37 million tonnes soon and in another two or three years, it will be 50 million tonnes. So we are boosting production. Hopefully, this year – and it is very important, perhaps the most important thing – we will harvest over 130 million tonnes. It is extremely important.

But overall, two-thirds of our domestic seeds are currently in use. In the next couple of year, we must reach at least 75 percent. We should move carefully, knowing our exact capacity and in light of that, progress gradually. We will, absolutely, do this because we need to move forward with both animal and seed farming to produce different crops.

But I must note – and you have just mentioned it – that since 2014, we have significantly increased our capacities in agriculture. Agricultural production in Russia has grown 15 percent since 2014 while food production has increased 30 percent. This is very serious progress. But the area you have just mentioned remains if not a weak spot, then something we must address.

As concerns the centres you mentioned, they are already being created, and we will provide all necessary support to them. And farms can also engage in this activity, and they do. I do not want to make a mistake but I think certain concessions have been provided. For example, up to 20 percent of costs related to this activity are reimbursed. I think this percentage could be increased to at least 30 percent and eventually to 50 percent. We will, of course, expand this initiative across the country. It is something we should address.

<…>

Vladimir Putin: (commenting on remarks by Yevgeny Guzov, Director for Biotechnological Production at R-Pharm, who spoke about the impact of sanctions on the possibility of obtaining the necessary raw materials, supplies, and equipment for biotechnological production, and asked how the President viewed long-term plans for import substitution, given the existence of sanctions) First, I have said repeatedly, including, if I am not mistaken, during our conversation today, that import substitution is not a panacea. Neither do we seek to substitute one hundred percent of imports.

No matter how hard we try, we will be unable to substitute bananas, despite our achievements in plant selection, of which our colleagues have reported today. We can, of course, produce them by using LNG to maintain greenhouses in the required condition. But it cannot be produced commercially, can it?

This is why it is necessary to cooperate with all those with whom there is a chance to cooperate, and we will do that.

With regard to critically important technologies, however, we should have competences of our own. And we will certainly develop them, including in the areas you have mentioned.

But it goes without saying that state support is needed to develop them. Therefore, we will formulate these objectives and render this support. There is no other option we can think of.

As for the sphere of activities you have mentioned, I told producers and now I want to tell those engaged in R&D… Incidentally, this is partially an answer to the question about the qualities of a leader. Our inventors and scientists – this has always been the case, by the way, not only in this country but also the world over – those who produced certain medicines, being fanatically devoted to their cause, tested these medications on themselves. And there were even more impressive cases, where people deliberately infected themselves to see how medication worked on this or that disease. It is these people, fanatical devotees to their cause, who achieved qualitative breakthroughs and results and brought about a revolution in their area.

Your business is crucially important and we will do our best to support you. Perhaps we will even try to do it more effectively than we have until now. When faced with concrete problems, we will respond to them.

Yevgeny Guzov: Thank you, we will go on working.

Vladimir Putin: Thank you very much, too.

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Yevgeny Trofimenko, Umatex R&D Centre, Rosatom State Corporation: Mr President, I have been dealing with composite materials for the past six years. We have a lot of work at the moment.

Vladimir Putin: Did you make the MC-21 aircraft’s wing?

Yevgeny Trofimenko: Yes, we did.

Vladimir Putin: Please accept my congratulations, and I sincerely want to thank you.

Yevgeny Trofimenko: Thank you.

It is very important for us that our work is appreciated and that it benefits the state.

But I want to say that the MC-21 wing is already history for us. We have accomplished it. Today, we are working on even better high-quality fibres.

Vladimir Putin: History? Do not tell me that this is a vestige of the past. This is an aircraft of the future.

Yevgeny Trofimenko: It is a plane of the future, but we are now making even better materials.

We have gathered today to discuss the future, rather than current and past developments. This future is causing certain apprehensions because composite materials are a sector closely linked with petrochemistry, and this implies petrochemical synthesis, in the first place. We produce huge amounts of crude oil and natural gas, but, unfortunately, their refining levels remain insufficient. I have listened to our colleagues, and about 80 percent of the speakers use commercial amounts of chemicals or their derivatives, one way or another. We can see the following problem in this connection.

What do you think of an initiative calling for state incentives to promote deep oil and gas refining projects? For example, this can be implemented as a certain national project or, to make it even more ambitious, in the form of a major state corporation that would set and address four main tasks that I personally see. The first task is scaling and oil refining depth. Second is expanding the line of products. Third, we must resolve the chemical engineering issue. Fourth comes chemical tool engineering, a highly desirable aspect.

This issue will probably become topical now because our Western “friends” intend to ban oil and gas imports from Russia. Of course, they will kill BASF in a month after imposing this embargo, but it would simply eliminate yet another rival, so to say.

I believe that we could reroute at least part of surplus amounts to the domestic market and sell them at a discount. This would make it possible not to fill oil and gas wells with concrete, God forbid, and to provide the entire Russian economy with chemical raw materials. We would therefore resolve a strategic issue.

Vladimir Putin: This is the most important area, naturally. Economic conditions are being created where it is increasingly beneficial for us to sell oil products rather than crude oil. Obviously, this is the most promising area for the future pivots. Russia’s SIBUR is specialising in this – petrochemistry and gas chemistry. This is why, of course, it is the level of the second, third and subsequent processing stages. The effect includes the development of high technologies, scientific progress, skilled personnel and good salaries, because it costs more and this is the world market. To be sure, we will continue to work further in this area.

You have mentioned basic chemicals, but there are also fine chemicals with an entire line of support and a certain strategy into the bargain. Of course, we will do this and support companies engaged in this.

As for the refusal to use Russian energy resources [in the West] – this is unlikely during the next few years. And no one knows what could happen in several years. Therefore, no one will pour concrete in the wells, there is no need to do that. What will this lead to? Things will be the way they are now: the amount of oil in the global market declines and the prices go up. That’s all. Corporate revenues surge in money terms. Everyone sees and understands this.

But the current situation is beside the point. You are absolutely right that the important thing is development. And development results from various processing stages and deep refining.

We must form our domestic market – a market for metal products and chemical production you just mentioned. The Government is working on this and, I repeat, an entire support programme is emerging.

You have mentioned four or five areas, including equipment, and so on. You know, gradually, as the basic necessity will require, this will be revived or born anew in certain areas. I am saying this with one-hundred-percent certainty.

It is great that after solving the problem with MC-21 wing, you came and said: this is our past, and we already have future materials.

I would like to tell those who do not know much about the subject that we manufacture the MC-21 medium-haul aircraft. There are plans for it to go into serial production 12 months from now. This very good and modern plane can offer some competition to Boeing airliners. What have our friends and partners done? They have persuaded the Department of State to include carbon fibres for aircraft wing in the list of sanctions. Actually, these products have absolutely nothing to do with the defence industry.

Why did they do this? They did this to prevent the Russian aircraft from entering the market and to seize this market niche themselves. They are simply using geopolitical tools in an unscrupulous, unfair and gross competitive struggle. In fact, this is a disgrace, but they are doing this.

Although they have done this, the relevant Rosatom subdivision (our colleague is addressing this issue, and he has just discussed the matter) manufactured these materials. To the best of my knowledge, they are even better than foreign alternatives, in many respects.

Of course, to develop this area further, we need to pay attention to various aspects that you have just mentioned, including the chemical tool engineering industry and machine-tool building. Of course, we will do all this.

I repeat, we have drafted a programme under a strategy for developing the chemical industry. However, we will modify it whenever necessary and in line with practical experience regarding our short-term tasks. We will certainly do this. We will help various companies. All these companies are feeling very confident, they are working effectively and they are developing large-scale projects in the Far East. SIBUR and corresponding subdivisions of Gazprom and Rosatom are working effectively; everyone is working effectively. Yes, there are some shortages, including equipment shortages. This will not stop all these projects. Current logistics problems will not stop these projects.

Yevgeny Trofimenko: It appears that the Amur Gas Chemical Complex is a real jewel of the Russian petro-chemical industry, and this is a giant plant. We would like it to be among many other similar plants of the same size and scale that will provide us with the entire range of products, so to say. Instead of one jewel in the crown, we need a necklace with an entire array of jewels.

Vladimir Putin: You are right. We will do this gradually. It is common knowledge that walking makes the road. Consequently, we will gradually move on, and we will meet domestic market demand. Russian production facilities have not yet saturated this demand. We will start developing international markets later on, and we are already doing this in some areas. We will certainly do this. We possess competitive advantages because we have the necessary raw materials. Yes, this is the case. Many others lack it, but we have this feedstock. So, we will be working together with you.

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Gidroservis CEO Igor Sukhov: In fact, I perhaps don’t even have anything to ask you. I would like to tell you that you can count on all of us here, all young entrepreneurs, scientists and specialists. And perhaps I will even dare to say that you can rely on the entire community of young and active people not just here but across our enormous country who are ready to work and develop.

Vladimir Putin: You said I could count on you. Thank you very much, but it is only natural, because today I am the head of the Russian state. I would like to say that it is not me who should count on you. It is Russia that must count on such young and active, as I said at the beginning of our conversation, nice, ambitious, and future-oriented people.

Igor Sukhov: We are ready.

Vladimir Putin: This is a challenge, do you understand? In fact, today, when someone jumps off, leaves, or prefers to stop some activity here, they will regret it. It is not a threat. They will not regret it because we are threatening anyone – we simply do not threaten anyone. They will regret it, because Russia is a country with really great opportunities, and many regret that they have to leave. These are all manifestations of the internal state of these countries that cannot make independent decisions: we are returning to where we started. And we are a sovereign country, so we must look to the future, and we are looking to the future. But this future can only be created by people like you. And so, the country is counting on you.

Thank you very much. I wish you success.