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Foreign heads of state and government, heads of major Russian and international companies and banks, leading experts and politicians from around the world were invited to the forum. Honorary SPIEF guests include French President Emmanuel Macron and Prime Minister of Japan Shinzo Abe.

The plenary session participants also include IMF Managing Director Christine Lagarde as well as Vice President of the People's Republic of China Wang Qishan.

The forum’s theme this year is Creating an Economy of Trust.

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Excerpts from transcript of St Petersburg International Economic Forum plenary session

Panel moderator, Editor-in-Chief of Bloomberg News John Micklethwait: Thank you very much. It is a great pleasure to be here.

This is, as, I think, you can all see, an extraordinary panel. I think we have roughly a third of the world’s GDP. We have maybe a quarter of its population, though with Madame Lagarde here we can perhaps claim we have a 100%.

I have searched in vain to find a panel that includes as many world leaders on one panel, even if you look at it from an Asian perspective. It is very rare to find the leaders of… such leaders from China, Japan and Russia in one room.

I think the coming together is a tribute to Mr Putin’s energy and power of persuasion. But it may also just be a sign of Donald Trump’s unique ability to bring people together. (Laughter. Applause.) Without him…although he could be… he likes surprises… and he often changes.

The format is each of the panellists will come up and deliver some brief opening remarks, and then we will have a discussion between all of us. The aim is for the first remarks to be relatively brief so we can have a full and frank discussion afterwards.

The first panellist to talk is our host, the President of the Russian Federation Vladimir Putin.

President of Russia Vladimir Putin: Mr Emmanuelle Macron, Mr Shinzo Abe, Ms Lagarde, Mr Wang Qishan,

Ladies and gentlemen, friends,

I am delighted to welcome all of you to the 22^nd St Petersburg International Economic Forum, Russia.

The St Petersburg meetings have become a good tradition. We value the forum’s atmosphere of trust and openness. We have just exchanged opinions, as they say, on the sidelines, about the forum, and Ms Lagarde just told me that she was pleasantly surprised by this friendly atmosphere.

Such a discussion and an informal dialogue are particularly important today when the international political, economic and trade system is undergoing a major strength test, and the environment for doing business and making investments, as well as everyday life, going through dynamic changes too.

The quality, sustainability, nature and speed of growth of the global economy are increasingly determined by new competences and human knowledge, advanced technology and means of communications, which were simply unimaginable a short while ago.

The one who will be able to effectively use these growth factors, to provide a breakthrough in the economy, social sphere, research and education, will significantly improve the quality of life of the people.

We identified these goals as our national priorities. In the near future, the newly formed Government should deploy them into specific action programmes, national projects and legislative initiatives, and provide for the necessary resources to achieve these goals.

In our development we are going to rely on our human, creative and labour potential. We are ready to learn and adapt the world’s best practices, and, of course, to use our own successful experience in tackling the most complicated structural tasks.

We will act primarily proceeding from our national interests. This is natural for any sovereign state.

However, it is possible to pursue one’s interests in different ways – either by ignoring others or respecting the position of one’s partners based on the understanding that the modern world is interconnected and countries are mutually dependent, and every state, especially the world’s major economies, bears an enormous responsibility for the common future.

Russia is part of the global economy. We are taking an active part in integration processes and exerting serious influence on the energy, food and other markets. This country and our companies are deeply involved in international trade, financial and production ties.

This is why we are attentively studying what strategies of economic, technological and social growth other countries are planning to carry out. Naturally, we are not indifferent to what global trends prevail in long-tern perspective.

Until recently, global development was based on two most important, determining principles. The first is the freedom of business, trade and investment, which is recorded in the general rules adopted by the participants in international relations. The second is sustainability and predictability of these rules, which is guaranteed by clear-cut legal mechanisms.

Based on these values and principles, the world economy managed to achieve impressive results and put into the orbit of development the overwhelming majority of international players, the majority of countries.

However, today we are witnessing not even erosion – and I say this with regret – but the undermining of these foundations. The system of multilateral cooperation that was built for decades is being crudely destroyed instead of undergoing natural and needed evolution. Violating rules is becoming a rule.

Open markets and fair competition are gradually replaced by all kinds of exemptions, restrictions and sanctions. Different words can be used to describe these notions but the meaning remains the same. Many countries now use these approaches as their official trade policy tools. And some countries simply had to adapt to this environment, respond and come up with tit-for-tat measures.

Let me highlight a fact that is quite telling. Until recently, a joint statement was issued following practically every leaders’ meeting of the G20 or APEC with calls to refrain from creating new protectionist barriers. Of course, these statements were non-binding, since new barriers kept creeping up, unfortunately. Today, however, we are unable to agree even on symbolic steps.

Let me give you another example: free trade agreements are losing momentum. This process started five or seven years ago. In 2010, the WTO was notified of more than 30 agreements of this kind, but last year this figure was down to just ten. There is a feeling that this downward trend can carry on.

Finally, we used to face what we can refer to as traditional protectionist measures that were also regrettable, of course, and consisted of introducing import duties, technical requirements and covert subsidies. Now, however, we are facing a new kind of protectionism. What is the purpose of all these far-fetched pretexts and references to national security interests? Their purpose is to suppress competition and extort concessions.

The spiral of sanctions and restrictions is only widening, harming more and more countries and companies, including those that never expected to face any trade restrictions or problems of this kind.

Arbitrary action and lack of control inevitably create a temptation to use restrictions more and more at a much broader scale and in any circumstances, without regard for political loyalties, solidarity or pre-existing agreements or cooperation ties dating back many years.

There are many businesspeople in the audience, and you know all too well that when one of the parties to a contract withdraws from the legal framework, the breakdown of agreements always creates substantial risks and losses. This is a fundamental truth for any business. On a global scale, when entire countries and centres of gravity act this way, this may pave the way to the most destructive consequences. This rings especially true today, when disregard for the existing norms and the loss of mutual trust may overlap with the unpredictable nature and turbulence of the ongoing radical technology transformation.

This combination of factors may trigger a system-wide crisis that the world has never faced or has not faced for a long time. It will affect all participants in the world economic relations without exception.

Global mistrust is calling into question the prospects of global growth. The logic of economic egotism does not fit in well with the current specialisation of countries and companies and the building of complicated global production chains. In effect, this may throw the global economy and trade far back into the past, into the era of subsistence farming when every household had to produce everything itself. This inevitably reduces economic efficiency, lowers labour productivity and wastes scientific and technological achievements that can change life for the better.

We are already witnessing alarming trends. The stability of business ties is undermined. Disintegration processes are gaining in strength. Forms of multilateral cooperation are devalued and the efficiency of international institutions and agreements is reduced.

Thus, the international community has so far failed to find acceptable solutions in the World Trade Organisation (WTO), which despite all difficulties and contradictions remains a key link in the global trade system and a major universal venue for resolving disputes and conducting dialogue on the issues that concern all economic actors without exception.

Needless to say, the WTO is not ideal. At the same time, there are no insoluble problems in its system. Giving it up without any replacement means destroying the established balance. In this case there will be neither complainants nor defendants in trade disputes. Force alone will decide who is right.

Naturally, the aim is not to freeze or mothball the existing order and turn into dogma the ideas that have outlived themselves and are no longer viable. Naturally, the world is changing and institutions and rules should be changing with it.

But one thing is clear: these rules must be transparent and uniform for all and should be observed by all international economic players.

It is very important for us to draft and introduce together a legitimate mechanism of changes, which will allow the international community to get rid of obsolete and sometimes inefficient and archaic norms, preserving all the best practices and creating new instruments that meet the requirements of the time.

For example, the spheres where multilateral “rules of the game” are still being formed are of particular importance for the global trade agenda. I am primarily referring to the development of new technological markets, such as e-commerce, access to information and transparency, protection of intellectual property and the rights of consumers of new, digital services.

Talks on the majority of these subjects have been launched. Much painstaking work, patience and perseverance will be needed. But let me repeat that there is no alternative to the joint development of rules in the global economy and mechanisms capable of guaranteeing their enforcement.

What we need today is a full-scale trade peace rather than trade wars or even temporary trade armistices. The theme of this year’s St Petersburg forum is Creating an Economy of Trust. I am convinced that experience shows that the role of trust as a development factor will grow.

Look at how hi-tech companies, start-ups, science, advanced innovative spheres are outgrowing existing traditional legal, corporate regulations. The work being done by partners, even if relations between them are complicated, is largely based on mutual trust. I know that this subject was repeatedly broached in discussions at this forum and on different venues.

Of course, we are not trying to idealise the situation. There has always been rivalry and clashes of interests; there still is and, of course, there will continue to be in the future. But it is important to maintain respect for each other. The guarantee of progress, the source of progress is in the ability to deal with differences and in fair competition rather than its restriction. This is the basis for each country’s confident, sustainable development and for tapping the huge scientific and technological potential that has been accumulated in the world as a whole.

Russia favours trade freedom, economic integration, and constructive partner-to-partner dialogue and calls on our partners from Europe, from America, from Asia and other regions to advance together towards the sustainable development goals and the development of a growth model that would provide the most fitting response to modern challenges.

What I mean is overcoming inequality of opportunity, solving demographic and environmental problems, preserving national cultures and identities, improving people’s wellbeing, and using the advantages of the new technological wave on a broad scale.

All countries run into such challenges one way or another. However, we are faced with all of them at once. For us to remain who we are, Russia, we must address all these challenges at the same time.

For us, state sovereignty and national identity have unconditional value. However, we need to make a major breakthrough in our development, to join the advanced countries in terms of life expectancy and quality of life, and to become a global technology leader.

Our vision of the country's future is based on four key principles.

First, we plan to build our policy around people, their well-being, interests and needs. I am convinced that the only way for our country to be strong and successful is to make sure that our people can fully realise their potential.

To do so, we will continue to modernise our economy and create modern jobs, to support wage growth, and to make our healthcare and education systems among the world’s best.

We plan to use best practices in planning our cities and villages, organising comfortable spaces for life, work, and recreation, to significantly boost housing construction and to make housing affordable primarily for middle-income households and families with children. Improving the environment is critical, and will be another of Russia's contributions to resolving global environmental issues.

Everyone should have a chance to excel in social and volunteer activities, in manufacturing, business, and public service, and have a good start for a successful life and career. Social mobility and improving human capital are the cornerstones of our country's progress.

We launched a whole series of projects to support and promote talented and goal-oriented schoolchildren and students, as well as established professionals, and also projects to expand the mentoring movement.

To make this work part of the system, an autonomous non-profit organisation, Russia – Land of Opportunity, is being created. Many in this audience are aware that a corresponding executive order has been signed. Along with existing agencies, such as the ASI, we will coordinate this work between the two organisations and work on the goals which I just mentioned.

Second, we will expand the space of freedom. This is something we talk about all the time, but these are critically important things. For this reason, I believe that it is my duty to say this once again, since it is essential for the emergence of an empowered civil society, for promoting economic, social, scientific and cultural development.

The policy of removing barriers and liberalising laws is primarily designed to meet the interests and aspirations of our citizens. We will seek to create a business climate for operating in Russia that would meet the highest standards. This includes supporting business initiatives.

One year ago, in my remarks here in St Petersburg, I stressed the need to make active use of project financing mechanisms. Today, we see that a new mechanism was put in place to create a project financing factory of sorts, which, of course, is a positive development. Agreements to fund new investment projects worth more than 700 billion rubles will be signed at this forum, while the annual amount is expected to exceed 1 trillion rubles.

The Bank of Russia, the financial and economic ministries and agencies within the Government, and Vnesheconombank worked together on this programme. We have been able to break up some of the bottlenecks related to bank oversight, guaranteeing investor interests, which enabled us to attract a substantial amount of private investment with minimal budget spending. Let me emphasise that we relied on a market-based, transparent mechanism when we took decisions to fund projects.

It will depend to a large extent on the regions, their efforts and effectiveness, whether our plans and projects to promote economic, social and infrastructure development plans succeed. I believe in the importance of continuing the policy of bringing new people into regional teams. It is at this level that the new governance culture is taking shape alongside modern approaches to attaining economic and social objectives. It is at this level that inclusive interaction between the state and the society can be promoted so that people become actively involved in local governance and are able to overcome challenges they face in their everyday lives. As you know, a number of successful governors joined the newly appointed Government of the Russian Federation.

Today, regions are competing against one another to provide the best business environment. They are competing for investors and for the best human resources. What this means is that we have been able to launch a mechanism of continual change. The National Investment Climate Ranking played a major role in achieving this result.

As always, I would like to congratulate this year’s winners: the Tyumen Region, Moscow and the Republic of Tatarstan. The top five also includes the Tula Region, and for the first time ever St Petersburg, my hometown, which is particularly pleasing for me. Let me note the positive momentum in Russia’s Far East, as well as in Buryatia, Kaliningrad, Pskov, Novgorod and Yaroslavl regions. I strongly believe that all our regions will keep up their efforts.

Third, for a technological breakthrough, and in order to be competitive in today's dynamic world, we must be receptive to innovative ideas and technologies that make a difference in people's lives and determine the future of the country and the world.

We adopted a major comprehensive digital development programme which will be among our priorities for the coming years. Above all, it is about developing and using end-to-end digital solutions in public administration, the economy, housing and utilities, and the social sphere, as well as energy, industry and transport. We are open to working with all stakeholders, making use of advantages together and responding to the risks of the digital age.

I would like to take this opportunity and invite everyone to take part in the Second Global Manufacturing and Industrialisation Summit to be held next year in the city of Yekaterinburg, in Russia’s Urals, which will focus on the use of advanced and prospective technologies in the economy, industry and other areas.

The fourth and final key principle behind our development includes our country's openness and focus on participation in global processes and integration projects. This, in particular, includes the implementation of major infrastructure projects which are an important part of our national agenda.

Developing Russia’s transport, energy and digital backbone, we plan to effectively integrate it into the global infrastructure and thus open up more opportunities for our citizens, domestic and foreign businesses in Russia, and to improve our country’s role in the global transport and information and communication system.

Colleagues, friends,

I have already mentioned how the modern world is interdependent. Working on the tasks at hand and achieving breakthroughs across all areas, we will create technologies and solutions which will not only improve the quality of life of Russian citizens, but also be used in other countries and benefit their development. Of course, as we move toward our goals, we plan to use and borrow best practices and achievements from other countries who are our partners.

A prosperous future cannot be created by working in isolation. Indeed, only cooperation and combined efforts can open up unlimited possibilities. Russia is committed to this kind of interaction. I am sure we will certainly be successful if we strengthen mutual trust and the spirit of partnership.

Thank you.

<…>

John Micklethwait: Thank you very much.

We have had five very eloquent speeches, and now is the time for questions, and I hope direct answers. The conversation has gone all the way from football to endoscopy and climate change, but now I wanted to centre on that idea of trust, and especially look at three areas where this is an issue.

We have the Iranian nuclear accord, which broke up, we have North Korea where there has been news about Donald Trump, and we have the US-China trade war. And then we will go look at Russia’s relationship with the rest of the world.

Mr Putin, as the host, will you take the first question? I hope that you will set the fashion for making a direct answer.

There was a nuclear deal signed with Iran in 2015. Donald Trump as we all know has unilaterally withdrawn from it. You have condemned this, Mr Macron has condemned this. We all know you want to keep the deal. You say you are a man of action. What actions will you take to keep the Iranian nuclear deal alive now?

Vladimir Putin: The Iran nuclear deal has been formalised by an appropriate UN Security Council Resolution. It is a multilateral international document. If we want our actions to be predictable, we must comply with common rules.

Unilateral actions lead to a dead-end and are always counterproductive. This is why everyone, all parties to this process must talk with each other openly and look for solutions. An idea occurred to us yesterday when President Macron and I discussed this problem.

The United States holds presidential elections every four years. If international legal documents are reconsidered every three or four years at the most, we will have a zero planning horizon. This would create a nervous atmosphere and mistrust. On the contrary, if we respect our agreements, this would lead to stability and initiate the search for mutually acceptable solutions.

John Micklethwait: Can I push you on a particular thing? If during the previous sanctions regimes Russia supported the sanctions against Iran, and you followed the rules, this time you disagree with what has happened. If the Americans impose sanctions on Iran selling oil, will you buy the oil, perhaps in exchange for wheat, or something like that, and allow Iran to get round the deal?

Vladimir Putin: This is a simple question, because we do not buy oil, we produce and sell it. Russia is a major oil supplier in the international market.

As for sanctions, Russia supported the sanctions against Iran that were adopted by the UN Security Council, but we never supported anything that is enforced by anyone unilaterally. I always said so and always considered such actions to be harmful and counterproductive.

Experts in Russia and the West recall the speech I made in Munich in 2005, when I spoke about the unacceptability of the exterritorial use of national legislation, or more precisely, US legislation. Many people in the United States and Europe were angry with me. But this is exactly what I warned everyone about. And now we see this in full bloom. “Dinner is served, enjoy.” (Applause.)

If we look carefully at what is happening and react in good time, there will be fewer such problems. We supported everything that was proposed by the international community to convince our Iranian partners to accept these arrangements.

It should be noted that our Iranian partners made many compromises and are honouring their obligations now. I have recently met with the IAEA Director General – he is a respected person and the head of a respected organisation that is trusted universally. He told me once again that according to IAEA data, Iran is fully honouring its commitments. Why should it be punished then? I do not understand this. This is the first part.

The second part concerns what will happen if this deal is destroyed. Would this benefit anyone? Would this benefit the international community and the region? Will the regional countries, including Israel, with which we have very good ties, feel safer? Mr Netanyahu has recently been in Moscow. Moreover, he attended the events we held to mark the victory over Nazism, and he marched on Red Square with a photograph of a WWII hero. It was a unique gesture and evidence of the good trust-based relations between us.

But will Israel be better off if Iran withdrew, is forced to withdraw from or is pushed out of this deal? In this event, Iran’s nuclear activities will be hidden from everyone, and we will not know what is happening there. What risks will this create? Look, we are still grappling with North Korea. There are many problems there, and none of them has been settled.

Do we want to create one more problem of this kind, or even a bigger problem, considering the explosiveness of the region? I do not think so. Therefore, I believe we must not get worked up. We should conduct a dialogue calmly in a considerate and professional manner, and we must find a solution.

As for sanctions, I have said that we always supported legitimate actions approved by the UN Security Council, and we never supported anything that was enforced unilaterally.

<…>

John Micklethwait: Mr Putin, I will come straight to Mme Lagarde in a second, but do you have any advice for the world in terms of how to deal with President Trump, because you were somebody who was associated with the election of President Trump. And yet you can look and see what happened, there are many here who are under sanctions. He has just withdrawn from the Iran deal; there are doubts about the North Korean deal. What do you think you have got from the relationship with him? This is the same question that I asked Mr Macron.

Vladimir Putin: Provocator. I was not related to Mr Trump’s election campaign. (Laughter.)

But of course, we cannot be satisfied with the level and nature of Russia-US relations. We are ready for this dialogue. Mr Trump suggested having a meeting specifically on the issue but we have not had a chance to have it yet, there have been too many issues to address. However, we are ready to have a substantive dialogue on a great number of issues. I think it is high time we did this. Donald has expressed concern over a potential new arms race and I fully agree with him.

The steps we are discussing now, both on the North Korean problem and Iran, they are not bringing us closer, that is for sure. And this is also a reason to discuss them.

Emmanuel said that Europe and the United States have mutual obligations. Europe depends on the US in terms of security. But there is no need to worry, we can help with security. At any rate, we will do everything we can to prevent any new threats. I think we need to take this road. This is the first thing.

Second, as concerns the United States and the US President losing by withdrawing from the Iran nuclear deal, I will talk this over with the French President. I do not think so. I do not think that President Trump lost. First of all, because he is fulfilling his election obligations. And in that, he has won in his domestic policy, to a certain extent. However, if the deal gets completely ruined after all, many will indeed lose. We must do everything we can to prevent this from happening.

Of course, this requires working with all participants, first and foremost, with the United States. Why? Because – let me take you behind the scenes of this deal – the main dialogue took place between the US and Iran. The other participants in the talks only adjusted the process slightly, including Russia. I am not going to hide this, we often did it to protect Iran’s interests. Eventually, after rather extensive bilateral talks between Iran and the US, everybody reached a compromise. This means that, despite all the difficulties, the two countries managed to agree.

Even now, the US President is not closing the door on talks. He is saying that he is not happy about many of the terms of the deal. But in general, he is not ruling out an agreement with Iran. But it can only be a two-way street. Therefore, there is no need for unnecessary pressure if we want to preserve something. Doors must be left open for negotiation and for the final outcome. I think there are still grounds for hope.

<…>

President of France Emmanuel Macron (retranslated): I just wanted to say that I am not saying the Iranian agreement was Trump's defeat; I was talking about the climate agreements. I said that he cannot threaten this agreement with Iran at the international level. I am just explaining what the consequences might be, but these are agreements between us.

As for security, I would like to assure Vladimir that I am not at all afraid, because France has an army that alone can defend the country. However, I have certain obligations with regard to other European allies. I think that the European security architecture I just spoke about is our responsibility. But in any case, we will not turn our backs, and this should not be done to the detriment of other European states. I think we can act this way, so I am not afraid and I want to fulfil my responsibility.

Vladimir Putin: It is a pity. You do not need to be afraid, of course, but the practice is already accumulating. Look, we all are focusing on Iran now. After all, European economic operators have already faced US sanctions – 9 billion for Paribas, a French bank, and Deutshe Bank – just for violating unilateral sanctions. So what? They paid. And a Japanese bank went through the same thing. It is necessary to end this, as it is unacceptable. That is what this is about.

What if this continues? What good will it do? It is destroying the existing world order. We must certainly agree with our American partners about some common rules of conduct. This is extremely important, because it is precisely what is at the heart of our discussion today – trust. Either there is trust, or there is not.

If there is no trust, nothing good will ever come about. Then really, as I said in my remarks, force will remain the only element that is left in international affairs, and this can simply lead to tragedy in the end.

Emmanuel Macron: I share your point of view. I fully share your point of view, all your economic and financial reasoning. Indeed, there is no doubt. I have also spoken about this. We really need to build a useful world order, and a stable one. Indeed, this depends on sovereignty, and on a multilateral approach to cooperation.

Sovereignty means respect for the interests of citizens and companies that depend on their government. From this point of view, we have full agreement. We need to have the appropriate means, and we must agree on this with the United States of America.

To be clear, I want to put an end to this insufficient sovereignty, which, perhaps, was the case in Europe before. The first decision I took with respect to France was precisely this. I completely agree. I think that there should be no uncertainty about security. We have a common history, so we need to find the right line of action in this regard. There is a collective security system and defence. This is very important for the European part and for the United States.

I think that the mistake that was made in the last 20 years was that we in NATO failed to fully comply with all the obligations we had taken on, and this caused certain fears, quite reasonable ones. And we did not have the trust that Russia rightfully expected. If so, as far as NATO is concerned, should we turn our backs on the US in this partnership? No. Otherwise I would have lied.

I came here to tell you the truth. Yes, indeed, as regards economic and financial sovereignty, I agree, but as for collective defence and security, indeed the European Union, France and Russia should try and build a new architecture that would allow us to move forward in an atmosphere of trust.

This is something else. I think that we should not confuse these two topics, but I completely agree with the first point.

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John Micklethwait: Before I come to Mr Abe, and Ms Lagarde, can I just ask President Putin something? President Putin, if you look around this room, you would seem to see evidence that sanctions do not work. Virtually everyone I meet here has been sanctioned in some way, and yet Russian business continues to thrive. Do sanctions still have any effect at all?

Vladimir Putin: You see, today we already mentioned sports, and my good friend, Mr Prime Minister imagined Russia and Japan playing in the World Cup final. This is not a good idea. What if we lose? It would be an unimaginable disaster.

But that is beside the point. The point is we are seeing in the world today a situation where everyone pretends to be playing football, while actually following the rules of judo. What an interesting game that is: not at all football, and not judo either, just chaos. This is where we are headed, and it causes us concern.

This is not just about the so-called sanctions or restrictions. There are people here who feel and understand what this means, and have first-hand experience in this matter. This applies to a vast majority of those present here, since the sanctions truncheon, as has been mentioned here already, is increasingly used against many, not only Russia. Is it good or bad? Can this be overcome or not?

It is clear that the Russian economy has now gained a more stable footing despite the double and triple blows that came with the drop in prices of our traditional exports – energy, metals and chemical products, exacerbated by the pressure of sanctions. We had to face all this at the same time.

However, we were able to find a way through, and have even gone further by strengthening our economy somewhat. I am very grateful to Christine [Lagarde] who said today that she sees positive developments on the macroeconomic side of Russia’s economy. But the losses are still felt by everyone, and development is held back.

In any case, these restrictions hold back the development of Russian businesses, which are unable to fully refinance their loans on international markets, and so forth. At a certain stage, this creates constraints, but once solutions are found, a breakthrough still happens, and everything goes back to normal. For this reason, this policy ultimately makes no economic, political or military sense.

As for the military aspect, I have already mentioned this. One of the reasons behind the attempts to contain Russia is to prevent the development of defence technology. We have shown recently that Russia is now ahead of many of our partners in defence technology despite the sanctions. Therefore, it is pointless, but still pernicious.

<…>

John Micklethwait: Mr Putin, the theme of this conference is “Building trust.” As you know in the rest of Europe, the newspapers over the past couple of days have looked at one particular issue to do with Russia. Yesterday, the Dutch investigation team into the destruction of Malaysia Airlines plane MH17 came forward and said it had proof that the Buk missile that hit the plane came from the 53^rd Anti-Aircraft Missile Brigade of the Russian Army based in Kirkuk. When you were asked about this yesterday, you said you did not have an explanation. I wondered now, what is the explanation? Have they made this up? Or was the missile allowed to cross into Ukraine? What happened to the chain of command on this particular issue?

Vladimir Putin: I discussed this issue yesterday, and I can repeat that, unfortunately, we were not allowed to take part in a full-fledged investigation. Therefore, we have no reason to completely trust the results of this investigation. We are not involved in it. The commission conducting this investigation does not heed the arguments we present so that they could be taken into account during the investigation.

I would like to note once again that this is a terrible tragedy. Yesterday, Emmanuel rightly said that we must always remember the families of the people who perished and the people who died as a result of this terrible disaster. Of course, it goes without saying that we will always remember this. But, for some reason, no one even recalls the fact that Ukraine had failed to fulfil its obligations stipulated by the International Civil Aviation Organisation (ICAO) and did not close the air space over the conflict zone.

There are different versions of what happened in this tragedy, but no one considers them. Therefore, it will be very hard for us to accept the findings of this commission, which is working without us, unless there is a full-fledged investigation. That is it.

Unfortunately, we have experienced some other tragic incidents linked with Ukraine. Some time ago, they downed a Russian aircraft flying from Israel over the Black Sea and did not admit their guilt. They did later, but did not pay any compensation whatsoever. Unfortunately, we have a negative history.

Regarding this specific tragic incident, we would like to take a full-fledged part in the investigation.

John Micklethwait: One last question, are you saying this was not a Russia missile? This was not a Russian army missile?

Vladimir Putin: Of course, not.

I repeat: There are several versions of what happened, including a Ukrainian army missile, an aircraft and so on. But, I repeat, there is nothing that would make us trust these findings. This will not happen, unless we fully participate in the investigation.

<…>

John Micklethwait: President Putin, what is your goal for Russia and West? Where do you want to see Russia and the West? Despite all these misunderstandings, we could have gone through many other ones, where do you actually want to take Russia? Do you want St Petersburg, this place, which is seen as the symbol of the Western capital of Russia, can you image this again being integrated into Europe in the sort of way that Mr Macron described?

Vladimir Putin: Each country has its own national priorities and its own interests. I spoke about this in my remarks today. We will certainly strive to attain our national interests. What are they, today and in the near future?

First of all, internal development. We need to ensure the growth of labour productivity in our economy, create an attractive environment for investment, because without investment, it is impossible to meet another important goal – to diversify our economy.

Ms Lagarde here told me about it yesterday and hinted again today. But we had a 4.4 percent growth in fixed investment last year, and 11.5 percent economic growth. This is a good sign –accelerated growth in investment, but this is not enough at all. Absolutely not enough!

To attract capital from friendly companies and countries, we need good relations with Europe, and with the whole world, including the United States. We understand this perfectly and are aware of this.

But if we are faced with a choice – either to remain a sovereign state or to suffer certain restrictions – then, of course, we choose the first option. Because these are too disparate substances to be thrown into the balance: either existence as an independent state, or investment thrown as a bone.

We seek only one thing: we want new rules of the game developed, or the old ones returned in the sphere of security and global economic politics with the help of international institutions that have already been established need to be further developed.

This is the groundwork we need to attain our next goal – to diversify our own economy, and make it innovative. We want to work on artificial intelligence, on robotics, and so on and so forth.

By the way, Christine has voiced concerns about robotics and job losses. This is not so terrible, actually, although such fears do exist, and so does the danger, to be honest. Still, according to experts, including international experts, only 5 percent of jobs worldwide can be entirely automated and only 10 percent of those have been automated so far. So there are good prospects for both our economy and the world economy.

Actually, we need this to achieve our main goal: to improve the lives of our people, to reduce the number of people living below the poverty line, and to raise the main indicator of welfare, life expectancy, to 78 years by 2024 and to 80 plus by 2030, as I already said.

All these tasks are absolutely solvable, but, of course, we need favourable external conditions. We will work for this in every way, not forgetting that it is in our national interest as well, yet we certainly cannot sacrifice our sovereignty and our deep, fundamental interests. I hope that this balance will be found between Russia and our partners.

John Micklethwait: Can I ask you one final question? Who will win the World Cup?

Vladimir Putin: The winners will be the organisers, those who organise this wonderful event at the proper level for the entire international community, for all lovers of this great international game. In any case, this is how we see our mission.

As for the teams, may the best one win, as they say. I would really like it to be a real celebration for everyone who loves sport: for the footballers and for our guests alike. We will make every effort to ensure that fans, experts and players all feel at home in Russia.