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Russian Popular Front’s Action Forum

November 18, 2014, Moscow

Vladimir Putin took part in the plenary session of the Russian Popular Front Action Forum.

Over 1000 people attended the Forum, which was held at one of the pavilions on the National Economic Achievements Exhibition grounds. Taking part in its work were co-chairs and heads of the Russian Popular Front executive committees, the President’s authorised representatives, members of the Government Cabinet, and representatives of the Russian Union of Industrialists and Entrepreneurs, Russia’s Chamber of Commerce and Industry, OPORA RUSSIA and Business Russia business communities. The Forum agenda covered such issues as the implementation of the presidential executive orders of May 2012 and the development of the Russian economy given the imposed sanctions.

Before the plenary session, Vladimir Putin visited the Made in Russia exhibition that showcased Russian companies whose products can be included in import substitution programmes. This includes latest developments in medicine, laboratory diagnostics, sports and automobile construction.

* * *

Excerpts from transcript of plenary session of the Russian Popular Front Action Forum

President of Russia Vladimir Putin: Good afternoon, friends,

I am happy to welcome you here, at another Russian Popular Front’s Forum. Traditionally, taking part in our meeting are the President’s authorised representatives.

Let me remind you that we agreed to maintain a constant dialogue and work together on pressing issues of our development. Last year, the Action Forum took place on the eve of the Address to the Federal Assembly, and many of the ideas and proposals made then, as you might remember, were included in the address for the nation to hear. Later, those proposals were translated into government resolutions, or at least attempts were made to do so; today we will see how successful that was, what has been achieved and what has not. I expect to have another substantive discussion today on the most acute matters that worry us all, that concern all the country’s citizens, matters that require prompt action.

I would like to begin by saying that the Popular Front has really become a good example of civic activity, just as we planned it to be. You have rallied concerned people around complicated issues that cannot be resolved without joint efforts on the part of the state and the entire society.

Thus, 18 months ago we spoke of a need to establish civic control over state and municipal purchases. This is a complicated area with serious corruption risks (we have to state this openly, and we do). The temptation is great to set oneself up nicely at the expense of the state or the public.

We have significantly amended legislation pertaining to state purchases and have streamlined procedures. However, it was civic control that became the force that made the provisions of law work and forced many bureaucrats to seriously consider their reputation and to realise how dangerous it is to go against public opinion. They have realised that wastefulness, inability to use public funds efficiently, and sometimes even overt bribery and robbery would not go unnoticed.

The Presidential Control Directorate and law enforcement agencies are currently working on the results produced following the inspections by ONF activists. Decisions have already been made regarding certain individuals who made either mistakes or committed crimes. I would like to ask you, colleagues, to continue acting in the same consistent and principled manner.

The format of the Popular Front’s themed forums also turned out useful and popular. As you might remember, a month ago in Penza, we had a detailed discussion of the state of education. I found the conversation very useful and interesting. I am aware that there have been many requests to carry on this practice, and we will do it.

Let’s also consider today the topics we should take up in detail in the future. I would suggest holding a forum in the first half of 2015 on the national healthcare. Just as education, this is an extremely important topic that concerns every citizen and every family. Naturally, we will have to get representatives of the medical community involved in this discussion.

A broad open discussion of this kind is always useful. It makes it possible to introduce changes in certain areas proceeding from the interests of the country’s citizens and their opinions rather than departmental views and needs.

The work done by ONF activists locally is also very important. They help orphanages, schools, hospitals and people who, due to health, age or other reasons, are unable to defend their rights against the arbitrariness that sometimes occurs. You bring together participants in social projects and volunteers. This also helps strengthen both the authority and the capabilities of the Popular Front.

I would like to express special gratitude to the Popular Front for the attention it gives to the needs of the residents of Crimea and Sevastopol and for helping refugees from Ukraine. Our people have already demonstrated true kindness, compassion, patriotism and unity.

Today, we need to put this public energy and national enthusiasm to work for the country’s development, for raising the quality in those areas of life that are of vital importance for every citizen, and I am referring to the social sphere, primarily to healthcare, education and social support.

Our guidelines have been set in the executive orders of May 2012 and the presidential addresses, and we will definitely move ahead, working on our plans and moving towards our goals. We certainly have to take into consideration certain other factors, like the current external economic situation – in short, we obviously need to stay realistic and pragmatic and not build sand castles. If circumstances require us to do so, we have to search for appropriate solutions proceeding from the existing situation and adjust our priorities accordingly. This is justified, possible and necessary.

However, what is unacceptable is if we use such circumstances as excuses to cover up any lack of action, inefficiency or indifference to the matters at hand or to the people.

I would like to ask all of you, colleagues, who are working within the Popular Front, to stand firmly against such an approach. Bureaucrats at all levels should work rather than search for excuses for their inactivity. The Popular Front should establish public, civic control and monitoring of the implementation of all our tasks and resolutions set earlier.

Naturally, colleagues, I would like all of us to base our local activities and our work here on objective information. As I said earlier, last time we met before the Presidential Address to the Federal Assembly, and today we also meet prior to this address.

I specifically asked the organisers to arrange a meeting with you at this stage, so that I could get some additional ideas and your analysis of the developments in the country, of what is being done and how, so I could use that in my address to the Federal Assembly and then in corresponding laws, executive orders or Government resolutions.

I would like to say that if we continue working in the same vein as we have so far, we would be able to maintain the efficiency of our efforts to implement all our plans. This, in turn, will help us resolve all the challenges facing the nation.

Thank you for your attention. I would not like to wear you out with long speeches, so let’s get down to our discussion.

<…>

 Vladimir Putin: Mr Brechalov [co-chairman of the RPF central headquarters] keeps saying “your executive orders”, but really, these are our executive orders because, as I remind you, they were born out of the intensive work we all did together in early 2012, when the RPF made an analysis of the problems facing the country.

These executive orders that Mr Brechalov referred to were the product in large part of that cooperation. What we are doing now is continuing our work together on carrying out the plans we made.

First of all, I think that this work most definitely does need to continue. I have already said this. Second, we need to think again on how to get more closely involved the people who shoulder the real responsibility for reaching the targets and results we have set. It should not be just a case of me sitting before you here and us having a discussion. We could select a particular theme for discussion, for example. And not so as to give anyone a public dressing down with the whole country watching, for that is certainly the last thing we need.

It’s not the process that interests us but the result. We are not Trotskyites after all. Trotsky was into that idea of movement being paramount and the final goal having no value. But we want the final goal, to achieve our ultimate objectives. I will therefore reflect on and ask my Government colleagues to reflect too on how to make the Popular Front’s work and that of the relevant ministries and agencies more effective than it is at present. And I will make sure too that together with our colleagues working in specific areas we can analyse what has and has not been done.

If something has not been done, which happens and is normal really given that life is more complicated than what we write and plan, then we will analyse why it was not done and what we need to do for it to go ahead, or what adjustments we need to make to our earlier plans. Our work needs to be real and concrete in order to achieve the planned results. Let’s agree that from now on, this is the way we will work.

Co-chairman of the Rpf Central Headquarters Alexander Brechalov: Thank you.

Vladimir Putin: Regarding mortgage rates and so on, we will discuss this a bit later. These matters will undoubtedly come up. Mortgage rates are quite high. We have lowered them a little over the last few years, but they are still quite high. They have increased since September, though only by a tenth of a percentage point, from 12.2 to 12.3 percent, I think it was. That is just for your information.

Concerning moving people out of dilapidated housing, we are allocating huge funds for this, more than 300 billion rubles – 318 billion, I think – over the next few years. Of course, we must make sure that this money is put to effective use. This is very important work. The funds are there and we plan to resettle slightly more than 777,000 people. In some places this work is underway more actively and we are already seeing results, and in other places the achievements are still modest for now.

The current budget constraints mean that we most probably cannot increase funding for this work right now, but we can certainly make sure that each ruble we do invest in this initiative is spent more effectively and with greater return. This is certainly what we should be aiming for. This is an extremely important matter after all and I have raised it several times. Our country is fully capable of addressing this challenge and getting people out of slums, as I have already said. This is something we must do and we cannot neglect this area of work. As for some of the other issues raised, we will come back to them later.

<…>

Vladimir Putin: (on the agriculture sector’s import substitution objectives) We are all adults and understand the situation. We have essentially took advantage of our partners’ untoward behaviour, especially as regards some countries that had make successful inroads into Russia’s agricultural produce market but, I think, have ended up hurting their own interests by imposing sanctions on us.

This decision of theirs gave us the moral, and I think also the legal, right to take retaliatory measures, precisely in a sector that has shown very good growth over these last years, and a good quality of growth too. Our agriculture sector is clearly capable now of dealing with practically any of the tasks our country faces in this area. If we did not think – if I did not think – that Russia’s agriculture sector is up to the challenge, we would never have taken these counter sanctions. After all, we have no interest in creating problems for ourselves.

But to put things bluntly, we took advantage of our partners’ ill-considered moves to offer our agriculture sector and agribusiness new opportunities to work in their own market –the rather considerable Russian market. Of course, this is an opportunity we need to make good use of. 

You said that the roadmap the Government drafted does not provide the guidelines to follow here. Probably that is so. I do not want to give my assessment of the roadmap just now, but I am always ready to take a critical look at whatever steps the Government takes. Let me say though that this was an attempt to at least lay out the road ahead. If the ministry did not get everything right, then this is the moment to sit down together and make the necessary adjustments.

As you know, the programme for developing the agriculture sector through to 2020 provides for huge funds, more than a trillion rubles, a bit more than 1.19 trillion, I think. Additional funds are already being allocated this year, substantial amounts. As with moving people out of dilapidated housing, the crucial thing here is to make effective use of the money.

As for our priorities, it is the market that sets our priorities above all else.

Our colleagues look to the market and so they reacted immediately. It would be very difficult, if not practically impossible, to simply write in a state programme what our agriculture sector should produce more or less of. This would take the effort of a lot more than one single ministry. This would require all of the market players, brought together in the relevant organisations, to analyse the Russian market themselves and propose to the Agriculture Ministry and the Government various support programmes in the different areas of most interest to us in terms of competitiveness. 

It would make no sense to take measures to support banana production, for example. We could spend billions and we’d never get the hoped-for results. This would be utter nonsense. But when it comes to our traditional crops, cereals, fruit and vegetables, various areas of livestock, dairy production, of course, we can produce these basic products far more effectively than we do today. We need to seize the opportunity and get to work on this right now, today.

You say that the programme is not enough, and indeed, it probably does not cover everything it could. But let me make it clear too that we never had any plans to take this road. We agreed to the conditions we managed to settle on during our accession to the World Trade Organisation and were willing to accept that situation and live with it. But as I said, our partners decided to go against their own interests and this gave us the chance to avoid some of our obligations too, given that we had ended up in extraordinary circumstances that were beyond our control. Naturally, we need to make use of this opportunity. 

Let’s take a closer look at this programme and at the system of subsidies proposed. You said that, “if there were no subsidies we would end up with zero”. Yes, and I can tell you one hundred percent too that if other countries, Western Europe, for example, didn’t have subsidies in place, they too would end up with zero. We are not proposing an end to subsidies. Taking into account that their subsidies are quite a lot higher than ours, we need to realise that we have freed up the market for our own local products and we need to act quickly and effectively now to fill this market and establish a truly solid hold there. That is my first point. 

Second, I agree with you completely on the importance of a stable tax system, and not just for the agriculture sector. This is definitely something we must think about and I will certainly try to reflect this in the Address that I mentioned today. This is important not just for agriculture but for the entire economy. Representatives of the business community, no matter what their sector of activity, all say the same thing: give us a stable tax system. This is certainly the case.

<…>

Vladimir Putin: You raised a very important issue; they are all important here, but this is one of the serious, systemic ones, whose solution will truly determine the future of the manufacturing sector, including high-tech – either the military industrial complex, or the manufacturing that is closely linked to that sector. Right now, many military industrial complex enterprises are releasing more and more products on the market and producing more and more civilian products. That is how it should be. Because if the defence companies focus exclusively on defence, then they will fall behind in development, they will fall behind the rest of the world, and this will ultimately have a negative impact on the defence aspect of their work as well. We are aware of all this and will keep it in mind as we move forward.

This is especially true since, for example, we currently have a very large order within the framework of the state defence order through 2020, the army and the navy will be re-equipped and then, of course, the re-equipment will continue, but at a steady pace, and not in the high volumes we have today. Even now, we do not want to work with such high volumes in this direction. But in the previous decade, or two to three decades, very little was done in this direction. Our main missile strike systems, ground forces, aviation and several other armaments are already outdated and require replacement. We are simply obligated to now work in this intense mode.

Moreover, in order to produce advanced weapon models and equip the army and navy, we have allocated money not only for purchasing arms, but have also allotted another three trillion rubles to re-equipping the military industrial complex itself, and this money is already being used. But just as in other sectors (I want to point this out to the corresponding departments, and you should certainly know this too), it is important for these funds to be used, and used effectively. This is a lot of money.

Now, about profitability. Of course, 7% is not enough. I don’t know whether we will be able to reach 20% to 25%, but 16%-17% is entirely realistic and in essence, it is enough for the sector overall and for individual enterprises to feel stable, to feel confident and to have the potential to develop, including, first and foremost, the potential for technological development.

Regarding an issue that is highly important but very complex and difficult to resolve: pricing. Naturally, it would be good if we had a single document on pricing. I won’t know how to thank you if you present even just a draft of such a document, because the Economic Development Ministry is still incapable of giving us even a draft of this document.

In some cases, it almost came down to a fight – not even almost, but a real fight, when I went out to a specific enterprise that manufactures very important equipment for ensuring the nation’s defence capacity, and I went out there on the assumption that agreements had been reached between the buyer and the supplier. I arrived, sat down at the table, and was told, “They haven’t reached an agreement.” I said, “I’m going to kill you. Why did I come all this way, a thousand kilometres away?” And I had to sit there and get personally involved in the final negotiations, as well as discussions on how to set up this work, because, as you know very well, it’s one thing when they make the initial models, and another when they go into serial production, it’ a different price, etc. There are many pitfalls. But for now, unfortunately, we have no such single document. It would be good if we had one.

Another issue that I would like to point out, and I want to ask you to think about this as well. First of all, I agree: the earlier you receive an order and the earlier corresponding contracts are signed, the better. At the end of the year, that is an absolutely normal timeframe. Our military industrial complex, this sector, is currently enormously indebted. Why? Not because they took out too many loans, but because in previous years, the Defence Ministry followed the well-known path, as you know, of 100% prepayment. This practice does not exist anywhere else. I would like to tell you and your colleagues (I will use this opportunity, since we are having this conversation): we need to look very carefully at how this money is being spent, and toward what goals.

Financial discipline should be guaranteed with absolute precision, and the nation, army and navy should receive the necessary equipment and arms on time and in accordance with the prices outlined in the contract, even if they are not yet based on the single document you mentioned; but ultimately, these prices are indicated in the contracts. They must be fulfilled.

You know, it has become our practice to gather with Defence Ministry leadership twice a year and last time, in the spring, I had the CEOs and chief designers from our main defence companies join in. We gather in Sochi for a week and work on these questions every day, from dusk until dawn, so to speak. And this time, next week, we will be working on this, including discussing your suggestions on pricing. It is absolutely one of the key issues in the industry.

<…>

Vladimir Putin: With regard to the issue of fluctuations in the national currency. The national currency exchange rate is, as you know, regulated to a certain degree by the Central Bank, which needs to monitor it. But it is, first and foremost, a market category, and the more the Central Bank attempts to artificially maintain or regulate it, the more the profiteers will capitalise on our gold and foreign currency reserves. In the end, that is not our goal.

The mechanism of these speculations, when we are talking about forex speculation on the national currency exchange rate, is not a criminal offence, it is an economic category. This is not speculation for which there is liability in the corresponding articles of the Criminal Code. This is an economic category. These people take advantage of an improper management situation. Meanwhile, the situation in the global markets is complicated, and our national currency exchange rate is directly tied to our economy.

Unfortunately, our economy, as we have discussed many times over the previous years, starting from the moment of the Soviet Union’s collapse – even then it was fairly unbalanced, and in recent decades, it has become even more one-dimensional. The main efforts by the participants in economic activity were focused on the most profitable sectors and on making a quick profit. What sectors are these?

First of all, in the industry it is extraction and production of raw materials. This includes oil, gas, chemicals to some degree (this came later), metals and so on. But oil and gas make up more than 70 percent of our exports, chemicals make up 5 percent, and I think metal makes up 8 percent. High-tech equipment, which our colleague spoke about, is somewhere just over 1 percent of our export potential.

Our objective is to change this structure of the economy; this is one of our main challenges. But for now, it is what it is, and it doesn’t seem possible to change this in a short period of time, and not even because we are all working well or badly, but because these are simply matters that have a lengthy cycle and because this requires large capital investments. And when situations occur like the one today, for example, on the raw materials market, which is the source of the main income in our budget, this immediately affects the exchange rate and forces it down.

In this case, the Bank of Russia provides regulation at the first stage. How does it do this? It buys surplus rubles, throws a large amount of freely convertible currency onto the market (our rate is dependent on a euro-dollar basket) and maintains the rate that way. But as soon as the Bank of Russia declares the trading corridor it will maintain, the profiteers buy up one currency, wait for the Bank of Russia’s next step, then enter the market further, further and further, thereby “pushing” the rate up.

So the Bank of Russia made the only correct decision possible. This is an absolutely objective issue confirmed not only by what we think but also the best global experts: it has transitioned to a floating rate. In other words, it assumed, and rightly so, that the market will regulate itself and profiteers can no longer act as parasites and suck gold and forex reserves out of the Bank of Russia, which we have accumulated in previous years.

But at the same time, due to the unbalanced development of our economy, we need to talk about this openly, a further drop in energy prices puts pressure on the exchange rate and the ruble will continue to lose value against the dollar and the euro. This is unavoidable. Another path is that of attempting administrative regulation, which violates the main economic laws on the function of the economy and currency.

Sorry, I had to tell you all this because I cannot respond to the issue you raised without this preamble. Your question concerns the sector whose objectives are related to a highly important area. This is the field of healthcare and demographics, particularly when we are talking about perinatal centres.

We achieved very good results in demographics thanks to experts such as yourself, thanks to people who have been working in this field for decades, who have significantly upgraded their skills. As a result, we have turned the situation around with regard to equipment and so on.

Of course, part of this equipment is imported. But a colleague here spoke earlier and said that some Russian-made products are no worse than the ones we buy from abroad, and Russia is already producing them, so they can be purchased. But some of our departments, including ones working in the area you represent, prefer to buy imported, more expensive products, which are in no way better in terms of function.

Given the situation today, we need to look at this matter from a business standpoint, and not spend extra money in areas where it is not absolutely necessary. And then, in cases where we cannot achieve import replacement, then we need to buy foreign-made goods.

I must say that in spite of the budget constraints, we are not cutting any programmes in this area. We feel that such sectors as healthcare, education and science are vitally important today. They even become the main sources and mechanisms of economic development.

So we will need to look again at what to buy where and what to develop in Russia, which is extremely important. You work in this area, so you know that, for example, we did not have Russian cuvettes at all seven years ago. Today, why do we need to buy them from abroad? Today, we produce them at home, and this is also high-tech equipment. And it is an example of equipment that is used in perinatal centres. I will not go over all such examples, as you know them better than me.

I repeat: all social programmes that were planned must be fulfilled; not a single one of them is being reduced. The question is whether we can currently increase our efforts in this direction, but we need to consider it. Perhaps we can – I am referring to the adjustments I mentioned.

Why? Because the budget revenues are not being affected. You see, the issue (to conclude with this so that we won’t need to return to this question) is that if we need to import goods, then yes, we now need more rubles in order to convert them to dollars or euro and pay for what we buy. But when we sell goods for dollars or euro, we have more rubles now. Before, we sold a product for a dollar and brought 35 rubles into the nation. It’s just one dollar, but it’s 35 rubles. Today, we sold it for the same dollar, but brought 47–49 rubles into the country, instead of 35. And that is why, if necessary, we can convert back. This is the first point.

This means that our budget revenues have not changed. Indeed, I can tell you that they have even increased based on the currency difference. And so nothing should change at all for the people living in our country, in the ruble zone, using rubles and buying our goods in our stores. In places where we need to buy imports, we need to reassess some things, and rely on the options offered by the domestic market more in some areas, which is good for many reasons. And in cases where we cannot avoid imports, we will buy abroad. We are not reducing anything, not a single one of our social plan programmes.

<…>

Question: I would like to ask the following question. We were all carefully following the situation in Brisbane, Australia and we got the feeling that this was not a partners’ meeting, but rather a tough fight that even broke some sporting rules. The Australian Prime Minister Tony Abbot went as far as violating diplomatic etiquette and threatening to “shirtfront” you.

I would like to ask you as a judo master: how did we do in this round, did we manage an ‘ippon win’? We would like to hear your views on the matter.

Vladimir Putin: Regarding our work in Brisbane, I do not know how the press here covered it, as I was away. First, as you may remember, I went to Beijing for a major event, then I made a working trip to Vladivostok focussed on the development of the Far East, and then flew to Australia. However, I did hear bits and pieces, and I know what my Australian colleague said.

I would like to tell you that actually none of this happened. Our Australian partners created a very friendly atmosphere for our work, I would even say a very warm atmosphere, conducive to a search for solutions to the challenges facing the world economy. I am being absolutely frank with you now.

Moreover, I was amazed at the warm welcome our delegation received from the people in the streets; I do not know how to explain this, but they greeted us with applause and were generally very welcoming. This came from ordinary people in the streets, and I am very grateful to them because it is always pleasant to find yourself in such an atmosphere. This is one thing.

The other deals with the hostile statements made by my colleague. This is probably some sort of political culture that involves working up tension; however, I would like to repeat that there was none of this in our contacts and work. We had a constructive discussion not only of the topics that brought us together, but of some very complicated issues as well dealing with the crash of the Malaysian Boeing, and the discussion was substantive and constructive. I assure you that everything was not only within the bounds of protocol, but also very friendly.

As for the discussion itself, as I have said, it was very professional, substantive and did not go beyond the proposed agenda. My colleague Tony Abbot moderated these discussions in a very professional manner. Despite the tight timeframe, everyone got the floor, and he did it all in a very light-hearted manner, with smiles and jokes. He could teach us a thing or two here.

As you may know, I did not attend the last lunch. Practically all the work had been done. There were two sessions that day and I spoke at both, putting forth the position of this country on the development of the international financial system and on combatting money laundering through off-shores. I believe it was all very constructive and useful. Our views were heard. Moreover, we will be implementing some of these ideas in our national legislation. I believe the work was productive.

True, I left somewhat earlier, because it is a long flight – it took us 21 hours. I believe that was the longest anyone of those present would have spent on a plane. Besides, I know the procedure: there were 20 people there, they depart in alphabetical order — this would have been another long wait, so I decided to leave early because I have plenty of work here.

<…>

Vladimir Putin: (commenting on a remark on state purchases and import replacement) In state purchasing, the choice has to be made in favour of the local producer, even if their produce costs 15 percent more than imported goods, you see? The government is ready for this, but we should arrange our work with publicly owned companies in such a way that they too take responsibility for supporting local producers, including small and medium-sized businesses.

There are certain problems here as well. Our public companies say that to be confident about the future, they need freedom of choice so they can choose the very best available on the global market.

If they don’t do so, they say, they would gradually lose their competitive edge, because their competitors on the global market use better goods and services thereby gaining in strength and overcoming our major companies with state participation. This would happen because their competitors would use the very best equipment, while our companies would not if we force them to buy only locally produced goods, which are not always the best. This is the first part of the matter.

The second is that if our local producers get rid of all competition, they would not have to maintain the quality of their produce, raise it or work to provide better value for money. Clearly, our local producer should maintain both high quality and competitive prices.

Only a couple of days ago, after my visit to China, I was discussing with my colleague the purchasing of goods in South Korea and China by one of our major holdings. The person who drew my attention to this is here in this hall. He said, “Mr President, I would like to draw your attention to the fact that we are producing this and that, while this company, CEO Mr so-and-so, has just signed contracts in China and South Korea, while we produce this too.”

I picked up the telephone, called the CEO of that company and asked what they thought they were doing. No, this is too early for applause. He is a smart leader, so he came to see me yesterday and brought huge spreadsheets, and said, “Mr President, please note: here is what we pay our local producers, and here is what we pay companies in China and Korea for the same goods of the same quality. The local producer’s price is exactly double the price in China or South Korea.”

So, I sent the spreadsheet to that colleague of mine who drew my attention to this fact, and I hope they have already worked on it. However, we said that local producers get preferential treatment, even if their goods are 15 percent more expensive, but of the same quality, state purchases should choose in favour of local producers.

This is something that could prevent local producers from turning out high quality goods. Why should they, if they can sell at higher rates anyway? Back in the times of the 2008–2009 crisis, we were deliberating whether we should give them such a benefit or not. We decided in favour, and then we had to decide on the percentage; whether it should be 15, 10 or 25 percent…It is a matter of taste.

We finally agreed on 15 percent. Nevertheless, I agree with you that state purchases and purchases by companies with public ownership should be arranged in such a way that they would be forced to pay greater attention to buying locally. This applies not only to major companies, but to small and medium-sized businesses as well. They should not hide behind their good intentions of maintaining their competitiveness by importing goods that can just as well be bought locally.

Let us look together for such criteria that would not restrain our companies too much, but would also ensure orders for our small, medium-sized and large businesses. Why should we export capital, creating jobs and paying taxes there? Let us do it here. However, this should be a well-balanced decision that would not hamper their competitiveness.

<…>

Vladimir Putin: You said that America wants to humiliate us. That’s the way you put it, wasn’t it? They do not want to humiliate us but want to make us submit and want to settle their own problems at our expense. They want to impose their influence on us. But no one in history has ever succeeded in subjugating Russia and no one ever will. 

They are however successful in imposing their influence on their allies, or their satellites, as we used to call them. We see how successful they have been in this from the way that many of their allies are attempting to defend foreign national interests on unclear grounds and with uncertain prospects to the detriment of their own national interests, and that this is to their own detriment is absolutely clear.

Sometimes this even leaves me at a loss because defending so-called European or Western values at the expense of one’s own national interests raises several problems. First of all, how do we define these interests when there are no clear criteria? All we have is general talk about democracy and suchlike. We are not talking about the right to carry out a coup d’état or the right to commit genocide. So what interests are we talking about?

Second, who and what is behind these interests? It is very clear that what we are dealing with here are the geopolitical interests of a particular country or group of countries. It is a big question even whether the interests of these countries’ elites are in keeping with those of their peoples. I have often debated these issues with my colleagues and we will yet discuss them further. In the end, just as the market sets national currencies’ exchange rates, I am sure that life will organise everything in normal fashion and we will certainly move on. No one wants to raise the level of tension in the world, believe me. No one in the USA needs this either, not the general public anyway, the ordinary people, and so everything will sort itself out in the end.

I think that more people here like America and Americans than dislike them. But the majority of our people take a negative view of the US establishment’s policies. No one can deny though that America is a great power, a powerful country, and the Americans are a talented and successful people. There is plenty that we can learn from them.

<…>

As we agreed, let’s sum everything up. We cannot discuss every issue right here and now after all and raise every problem. I think we have established a clear picture of the situation. It is clear too that we are doing this work not in vain and that we are making progress. Yes, we see that not everything turns out exactly as we hoped, but if we work hard and take a creative approach, we will succeed in our goals.

Thank you very much.

November 18, 2014, Moscow