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The country’s economic situation and workers’ social situation were the main subjects of discussion.

Before the meeting the President looked over the production process and the latest equipment installed at the plant. 

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Excerpts from transcript of meeting with workers from companies in Khabarovsk Territory and United Russia party core group

President of Russia Dmitry Medvedev: My greetings to you all!

You have come from different companies to meet here today at one of the region’s enterprises, the Amur Cable Plant. I want to congratulate all of the plant’s staff on the 55^th anniversary of your enterprise this year.

I just visited the plant and can say that it makes a good impression. It has installed new production lines, and the production process and working culture themselves have changed. I hope that is reflected in your wages. The director, in any case, said that your wages are now close to the average in Khabarovsk Territory, and this is important of course.

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”We are now the world’s sixth biggest economy in terms of purchasing power parity. This is our chance to maintain our place among the big global economic players.“

I met recently with my colleagues from the world’s twenty biggest economies at the G20 summit. You know, I think we sometimes tend to belittle ourselves somewhat, but we should not forget that for all of the difficulties and problems we went through during the 1990s (and indeed, this last decade has also had its share of problems), we are nonetheless now the world’s sixth biggest economy in terms of purchasing power parity. This is our chance to maintain our place among the big global economic players.

The forecasts vary greatly, but objectively speaking, the overall situation here is in some ways better today than in many European countries. I say this because, despite the difficulties we have faced over the recent period, we have achieved decent GDP growth – growth will be around 4–4.5 percent this year. I remind you that the European Union and the United States are looking at GDP growth of between zero and one percent.

We have steadily reduced inflation over these last years, despite the economic crisis. This year, we will have the lowest inflation figure in the last 20 years – around 7 percent. If you compare this to the situation ten or so years ago, you can see a big difference.

If we look at the situation in the neighbouring countries, look at our close friends and brothers, the Belarusians, for example, they have inflation running at 100 percent. This is what happens when you delay needed reform. Of course we are trying to help them now, developing the common customs space with them and building an economic union together. In other words, the situation here in Russia is really not so bad.

”We are part of the global economy. Our task now is to make our economy a lot less vulnerable to price fluctuations on the raw materials markets than it is now.“

Our debt to GDP ratio is also in a decent situation. In many European countries it stands at 80–100 percent. In Japan, not far from here at all, it is more than 100 percent. In Russia, meanwhile, the ratio is just 13 percent. In this sense our macroeconomic situation is in fairly decent shape.

But it would be self-deceit to say that we are safe from problems. We were open and exposed to the problems that emerged in 2008 because we are part of the global economy, and we remain so today. Our task now is to make our economy a lot less vulnerable to price fluctuations on the raw materials markets than it is now.

What happened in 2008, after all? We were developing at a very good pace and had high growth rates and so on, but given that we rely to a large extent on oil and gas… You work at an oil company? Yes, of course this is a very important sector in our economy, and we cannot renounce raw materials now, and should not in any case, because we are a big raw materials producer. But we need to work on diversifying our economy so that companies such as the one we are at right now take the place they deserve in our GDP structure. 

Anyway, as soon as the global economy began to contract in 2008, oil and gas prices fell and our economy shrank with them. This direct dependence on global prices puts us in a very dangerous situation, and so we need to make an all-round effort to develop industry and manufacturing, carry out a new industrialisation if you will, but on a completely different basis to that our country carried out in the 1930s.

”The direct dependence on global prices puts us in a very dangerous situation, and so we need to make an all-round effort to develop industry and manufacturing, carry out a new industrialisation.“

If we succeed in this we will be better insulated from global problems, though we, like any other country, can never be fully protected. I would call myself a cautious optimist with regard to the general situation in Russia today, particularly after hearing from my colleagues at our meetings about all the difficulties they face, especially in the Eurozone.

It is very important in this context to reach agreements with one’s partners, given that the big problems at the moment on the global currency markets are in the Eurozone, Europe’s economic zone. This situation is partly due to the time it takes for countries to agree on the principles for overcoming the crisis.

The result is that economies go into decline and living standards fall. We all need to be ready and willing to reach agreements. But do not fear, we will come through and everything will be alright. 

On a final note, I want to say that the first wave of the crisis in 2008 caught many by surprise. No one was expecting such a big fall. We also were not expecting this, to be honest. We realised that the possibility was there, but we did not expect that the drop could be so dramatic. But we have climbed our way out again, and quite fast too.

I think two things are important now: wages have risen again of late and are back at pre-crisis levels, indeed at many companies they are even higher now than they were before the crisis, and this is an important development.

”We have a duty to continue research in the Arctic Ocean and the Arctic in general. Geographically, this region includes our maritime territory and coastlines, and also the vast resources located there. We will certainly defend our interests in the region, including our security interests.“

Second, we have successfully addressed the unemployment issue. Our real unemployment figures are even better now than they were before the crisis. This is not to say that the situation is perfect, for big problems still remain, problems in single-industry towns, problems in particular professions, but overall, the figures are back to the pre-crisis level. This is an important development too, all the more so as in some countries the situation has not recovered yet. I think this is the best guarantee that we will calmly and steadily get through this coming period too.

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We have a duty to continue research in the Arctic Ocean and the Arctic in general, because if we don’t, other countries will step in. This does not make them our enemies, and we do not treat them as such, but the Arctic Ocean is the sea adjacent to our country, to put things in international law terms. Geographically, this region includes our maritime territory and coastlines, and also the vast resources located there. If we do not invest there other countries will, countries from outside the region. Frankly, without naming any names, so as not to offend anyone, I was amazed to hear countries in another part of the world altogether announce that they are going to get involved in the Arctic. So they would get involved and we would not? Of course we will invest in this region and in research there, indeed, programmes are already in preparation and I have personally held a number of Security Council meetings on developing study of the Arctic Ocean. At the same time, we will certainly defend our interests in the region, including our security interests, and I can tell you that the decisions on this matter have not simply been drawn up but have already been approved.

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Colleagues, I want to thank you for today’s discussion. It was very important for me to have this chance to hear the views of people here in the Far East, listen to the representatives of the various companies here, and also people close to United Russia, party members or supporters, because we have an election campaign going on after all, and we need to listen and talk to each other in order to reflect on our future course together.

The future depends on the plans we make and how we carry them out. We have many plans. We have a vast and complex country, but at the same time, I think that people in various positions in other countries also encounter difficulties. Our country is exceptionally complex, however, even just in terms of its size alone. You here in the Far East know this very well and realise how difficult it is to actually carry out big projects. But we know too, that if we do not carry them out we will not have this country, and this is just what we do not want, for it is our desire to live together in a strong and united Russia. Let us therefore keep striving and working towards this goal.

I wish you all the best of spirits. See you again.