Official website of the President of Russia

Transcripts   /

Vladimir Putin: Mr Prime Minister,

Ladies and Gentlemen,

I am truly happy to have this opportunity to meet with representatives of Great Britain’s business community. I am pleased to see here businessmen with whom I discussed the new stage in Russian-British cooperation three years ago. Since then many important events have happened as part of this interaction. I would like to thank everyone present for their contributions to the development of bilateral relations.

This forum is dedicated to key issues – issues of the energy dialogue. Today, Russia is one of the world’s most active participants in it. The energy sphere is the driving force of our economy. Its growth stimulates and propels the development of many branches of the Russian economy. However, before I speak about this in detail, I would like to say a few words about the state of the Russian economy in general and prospects for bilateral cooperation.

Over the past three years, we have achieved good results to boost the market economy. The country’s GDP has risen by 20% over this period. Investment in authorised capital has increased by almost a third. The volume of natural gas, oil and oil products’ supplies has grown by more than 15%.

Real steps have been made towards improving the business climate in Russia. This, above all, means measures to reduce the red tape in the economy, although a great many problems, strengthening the judicial system and protecting the rights of property owners and investors, still need to be addressed. Tax, currency and customs legislation has become more liberal. A few days ago, the State Duma, Russia’s lower chamber of Parliament, adopted the new Russian Federation Tax Code, which we had been working on for almost two years.

All these are key prerequisites for the development of business initiative and the expansion of ties between our business communities. We intend to continue this policy.

Today we have more ambitious plans, such as doubling our GDP in ten years. We are talking about a real breakthrough in Russia’s economic development. This is, of course, a difficult task, but it is feasible, when one remembers that on average over the past three years GDP grew by 6% a year, and in the first five months of this year it hit the level of 7.1%. To double GDP in ten years, we must have an annual growth rate of 7.2%.

This task is essential, all the more so as our main priority is Russia’s consistent integration in the European and global economy. And, in this, we view the United Kingdom as our most important partner.

Three years ago, we talked in Great Britain about making our economic cooperation more dynamic. I believe that we have made serious headway towards accomplishing this task.

In 2002, the volume of reciprocal trade increased by almost 15%. This is a very good figure. The growth rates of trade operations are even more impressive. A 50% increase was registered this January-February alone.

On the list of leading European countries investing in Russia, the United Kingdom climbed to third place this April, after Germany and Cyprus. As far as Cyprus is concerned, you are probably aware that we are talking about the de facto repatriation of Russian capital. And I think you will agree with me that this is a very good sign. It has to be said that last year the level of capital outflow from Russia was lower than the amount of money invested in our economy.

The level of British investment in Russia, in comparison with last year, grew by 50%. As you know, British Petroleum and Royal Dutch Shell recently announced that they were ready to invest a total of $17 billion in the Russian energy sector. I would suggest that this decision is the best confirmation of the positive changes in Russia’s investment climate. And today these companies are making further headway towards implementing those plans that they unveiled earlier. I believe they have informed you about these. The United Kingdom will become the leading investor in Russia when these intentions are realised, and not only in terms of Europe, but the world.

I should point out that our investment cooperation is not limited to the fuel and energy sector alone. There is a whole range of highly promising projects in the hi-tech sphere, including aerospace design.

For Russian companies one way of attracting capital is placing corporate stocks and bonds on the London Stock Exchange. For example, in January and February of this year, stocks on the electronic trade market reached around 6 billion pounds sterling. Not bad for a start.

We view the development of direct contacts between the business communities of both countries as a priority. One good example is the ties between the Russian Union of Industrialists and Businessmen and the Confederation of British Industry.

We attach great significance to advanced inter-regional communication. As an example, I can cite the presentation of the Central, North-Western, and Urals Federal Districts in London. It is no accident that our delegation today includes leaders of these large Russian regions: the Mayor of Moscow, the Governor of the Leningrad Region and the Governor of the Novgorod Region. Last November the multi-faceted exhibition “Russia-Great Britain: Trade and Economic Cooperation, Realities and Perspectives” was held.

All of these contacts vitally enrich our partnership and open great opportunities for business and social initiatives.

Great Britain is one of Russia’s most important European partners in the energy sphere. And I believe it very important that our relations in this area move to the level of a long-term strategic partnership in the full meaning of that word. An example of this is the plans to create TNK-BP oil company with the participation of British Petroleum.

Royal Dutch Shell is actively cooperating with Russian companies in a wide range of projects in the area of exploration and extraction of oil and natural gas.

The important aspects of interaction are the high technology in energy, energy conservation and using non-traditional types of energy. I am sure that there is a huge field for activity here, including within the framework of the Working Group for Energy and on the level of the bilateral Inter-Governmental Committee for Trade and Investments.

And here, of course, we assign a great role to the relevant departments in the governments of the Russian Federation and Great Britain. Serious attention is being given to the development of the energy infrastructure and the design of new routes for transporting energy resources. It is here that I would like to especially note the project of creating a North European natural gas pipeline. As you know, there are plans to lay this pipeline along the floor of the Baltic Sea, as well as through the territories of the Federal Republic of Germany and the Netherlands, leading to the shores of Great Britain. I am certain that the completion of this project will contribute to the stability and reliability Russian natural gas supplies to Great Britain, as well as onto the markets of continental Europe. This will create very favourable prerequisites for the effective and competitive development of the European economy as a whole.

One of the key tasks is the complete elimination of obstacles hampering the development of Russian-British business ties. Here I mean the need to perfect the financial, organisational, legal, and informational mechanisms. In other words, the entire infrastructure of our cooperation.

Russian businessmen would like to see the conditions of the British Export Credits Guarantee Department to be equal to those offered by insurance agencies in other European countries. This could be better if we keep in mind not only grandiose projects, which I have spoken about, but also other equally major tasks that we may face. I have so far been speaking about the European part of our cooperation. However, we may actively and no less effectively operate on the markets of other countries. You are aware of the dynamic growth rate of the economies of Asia-Pacific countries. We are observing a powerful development. What holds them back today is a shortage of energy resources. We have already discussed here possible joint projects in this area with some of our colleagues. These are very ambitious projects.

In addressing all of these tasks, it is necessary to reach compromises in our business dialogue. We already have a reason for our talks. It is the enormous benefits and perspectives of our bilateral relations.

Russia and Great Britain share the goal of strategic cooperation. As you say in Britain, where there’s a will, there’s a way.

I am certain that the Russian-British relation in the new century will grow and develop. First and foremost, because this completely corresponds to the interests of our countries and peoples. This is a great investment in strengthening Europe’s stability in its economic prosperity and progress.

This cooperation truly corresponds to the interests of our countries and peoples of all of Europe. I wish you every success and thank you for your attention.

Thank you.