0
0
Russia Calling! Investment Forum
Vladimir Putin took part in the plenary session of the Russia Calling! Investment Forum, via videoconference.
The Kremlin, Moscow
30 November 2021
President of Russia Vladimir Putin: Ladies and gentlemen,
First, I would like to welcome all of you to the Russia Calling! Investment Forum. By tradition, it has gathered domestic and foreign investors and experts to discuss current issues on the business agenda, key trends that determine the development and investment potential of individual business areas, markets and even whole countries.
Of course, the coronavirus pandemic has been in the focus of the world’s attention for almost two years. There is nothing we can do about this. Its impact on investment, business and cooperation ties is great. It is affecting the entire global economy.
I would like to note that the economy is gradually recovering nonetheless. However, the rates of this recovery are in question and everyone knows why – it is yet another wave of the disease caused by a new coronavirus strain. This compels governments all over the world to resort to restrictions again.
In the next few weeks, we will find out how serious the consequences triggered by the new strain are. But it is explicitly clear that we must be ready for any change in the virus. First, it is necessary to continuously monitor the efficiency of tests and vaccines and use clear-cut algorithms for reducing the spread of infection. The healthcare system must be on high alert; it must have enough reserves of medications, oxygen and beds and use the most effective treatment protocols.
I would like to ask the Government – I address my colleagues in the Government of the Russian Federation – to prepare within a week an updated plan of action to counter the risks of the spread of the new coronavirus strain.
At the same time, considering the global cross-border nature of the disease, we can give an effective response to the pandemic only if we work together – I have said this many times, and not only I. Appeals to pool efforts in fighting this infection are voiced in the United Nations all the time. It is only possible to counter it effectively by coordinating the efforts of the entire international community. I am referring to mutual recognition of vaccines and vaccination certificates, access to vaccines in all regions of the planet and joint work on new anti-coronavirus medications.
I am sure it is hardly possible to counter this idea. The understanding of shared responsibility, especially by the leaders of the world’s most advanced countries, will become a foundation for more vigorous joint actions.
As for the economic agenda proper, a distinctive feature of the current situation is the high inflationary pressure; the world is entering a new wave of the pandemic with this. As experts, as direct participants in global economic affairs, you are well aware that the rise in prices is due to a whole range of reasons that added up.
In particular, consumer demand for services such as tourism, transport and public catering recently has subsided and shifted towards goods, and everyone is well aware of that. At the same time, the closed borders and the COVID-19 restrictions have disrupted many supply chains; there is a shortage of certain goods, and this is pushing prices up.
There is another significant factor that accelerated inflation, perhaps even played a key role – the extremely soft budgetary policy in most developed countries, the growing budget deficits, a trend that persists this year, which means that global inflationary risks are still out there. Indeed, a substantial infusion of funds into the economy have helped them support people and business in difficult times, and we also do this in Russia, but at the same time, injecting money on a global scale, so to speak, provoked a surge in prices on global markets, including commodities markets.
We are witnessing a major crisis breaking out in the global energy market. The first thing it did was send up prices of nitrogen fertilisers, something agricultural producers around the world need as one of the key resources for maintaining soil fertility and stable yields. It is obvious that this situation creates risks for further growth in food prices. Wheat prices have risen sharply on global markets over the past month. According to experts, this trend may continue.
Unfortunately, Russia and Russians are also feeling this global inflationary pressure. The growth of consumer prices in our country has accelerated, largely under the influence of external factors. This is a serious and sensitive problem for the people, especially for low-income families, and addressing it requires the utmost attention.
It is important not only to deal with the consequences of inflation, but also to act proactively and to remove the factors that are driving prices up. We are already providing targeted support to manufacturers of the goods that are most susceptible to abrupt price fluctuations, primarily, food. And here again I want the Government and our colleagues in the regions to keep in mind the fact that an increase in output and an increase in availability of food on the domestic market are the key performance criteria in this area.
We have also expanded financial aid to citizens with low incomes. This year, we made one-time payments to pensioners and families with schoolchildren, and we are launching new measures to support families with children. Next year, we will re-adjust the subsistence level and the minimum wage, as well as social benefits. These decisions have already been taken.
Of course, this is not an exhaustive list of measures to support the people. Based on our financial capabilities, we will work through other solutions in this regard.
At the same time, it is important to maintain a responsible approach in the macroeconomic sphere. Notably, Russia was the first among major economies to normalise its budgetary policy amid the pandemic. Starting next year, we will strictly follow the budgetary rule when forming and executing the federal budget.
Also, all the measures to support the people that we are implementing remain within the budgetary parameters and are carried out at the expense of extra budget revenue and redistribution of its expenditure. Thus, they have no inflationary implications.
With regard to monetary policy, the Bank of Russia continues to stay the course of curbing inflation and timely and proper regulation of the banking sector.
Thanks to responsible and well-calculated actions by the state and businesses, the Russian economy has already exceeded the pre-crisis level. In January-September, the GDP increased by 4.6 percent. It is expected to grow by 4.2 percent as of the year end.
The unemployment rate dropped to 4.3 percent in September which is just what it was before the pandemic broke out. Today, we can safely assume that the labour market in Russia has fully recovered which, notably, we cannot yet say about many leading economies around the world.
Our strategic goal is to support and consolidate positive trends in the Russian economy, to ensure its sustainable and lasting growth or, as experts say, to boost the potential rates of economic growth.
Considering the lessons of the epidemic, current global challenges, and Russia’s natural competitive advantages, we are determining points of growth for capital investment. Importantly, we want this investment to produce a comprehensive effect for the branches of the national economy and the country’s regions, primarily, for increasing the incomes and the living standards of our people.
At this point, I would like to draw your attention to several key areas.
First, our long-term priority is the growth of the share of infrastructure investment in the GDP. We have launched a powerful instrument for the development of territories – 15-year-long infrastructure budget loans at 3 percent interest. These are very good terms for our economy. In the next two years, the additional amount of work on the projects carried out with the help of this instrument is expected to exceed half a trillion rubles. We will spend these funds on building roads, networks and communications systems – everything that provides comfortable living conditions and allows us to create jobs, open new production lines and launch advanced projects. These efforts are not merely effective from an economic point of view, but have a positive impact on the environment and create new opportunities for the self-fulfillment of people in all regions of the country.
I have already said that the programme of infrastructure budget loans will last at least until 2026. We will determine its precise scale a bit later with due account for the experience gained and the readiness of new projects, as well as the technological and production capabilities of our construction industry, which are certainly rapidly building up. We will draft simple and understandable procedures here in order to build quickly, reliably, with high quality, in a modern way and without losses and encumbrances.
I would like to note one more important decision. There are plans to allocate 2.5 trillion rubles from the National Wealth Fund (NWF) through 2024. These funds will be invested on a refundable basis in major investment projects, primarily, in infrastructure, and will certainly let us attract additional private investment. At any rate, we are hoping it will.
Second, we support investment aimed at making positive social and environmental changes in our country, which meets the sustainable development goals that Russia plans to achieve. Experts have already drafted a legal framework for launching green projects that will allow us to reduce harmful emissions substantially. Starting July 1, everything will be ready in Russia for launching climate initiatives of businesses, including foreign companies. They are very important for our economy to reach carbon neutrality by 2060. We have already announced this, in Glasgow, in particular.
The new programme to improve the economy’s energy efficiency is going to play an important role. The Government should complete its preparation by October 1, 2022.
We will vigorously develop the infrastructure for investments in sustainable development, and stimulate the inflow of private capital in this area. I ask the Government, as well as the Bank of Russia and the business community, to work out a range of appropriate financial instruments, including tax incentives, subsidies, and government guarantees for enterprises and investors. At the same time, I would like to note that several current projects are already enjoying this kind of support, but again, it is important to make this work systematic.
Third. Digital transformation, the introduction of new technologies in all spheres should give a boost to the development of the national economy, should increase labour productivity and people’s incomes. Even today, Russia is one of the global leaders in the use of digital services and the development of artificial intelligence technologies. We are also well aware that it is important to ensure a balanced development of digital ecosystems, and to define the role of financial institutions there. Let me remind you that such ecosystems are centered on an individual and their so-called digital profile. And, as I emphasised at a recent international conference on artificial intelligence, it is essential to determine a correct model for processing large amounts of information, to ensure the absolute protection and security of personal data, and in general, in a broader sense, the protection of people’s rights and freedoms.
Fourth. The banking sector and the stock market play an important role in the recovery of the Russian economy and in putting it on a long-term growth trajectory. Thanks to their strong financial position, Russian banks are now increasing lending to the real sector. Our host, the organiser of this event, can certainly confirm this. You probably have already spoken about this a lot.
It is important to further increase the availability of lending resources to sustainable, growing firms and companies that need funds to boost production and create new well-paid jobs. At the same time, banks should carefully assess potential borrowers’ credit quality, regardless of their form of ownership.
I will add that, relying on fundamental macroeconomic factors, Russian stock indices have exceeded their pre-pandemic levels, and Russian bond and equity offering is growing. We will make our platforms more attractive, for foreign investors, among others.
Notably, the securities market has become more accessible for small and medium-sized businesses. This year, the volume of bond placements by these companies amounted to 7.6 billion rubles. We will take further action to develop this capital mobilisation tool and provide overall support to small businesses by offering innovative solutions. Thus, small and medium-sized businesses now get a refund on bank commissions when selling goods and services to individual customers. This procedure is convenient for businesses and beneficial for the consumers, and will remain in place until the end of this year. I believe it should be extended for at least another six months.
There is one more important issue. The Russian stock market is actively attracting funds from individual investors. Over nine months, their investments grew by more than a quarter, which adds stability to the securities market and makes it more attractive. This resource should not only become a major source of financing for investment projects, but also work reliably for individual investors and generate a steady flow of income for the people who are willing to invest long-term in the Russian economy.
In this regard, I want the Government to draft additional proposals to this end, including deductions from tax on capital gains from long-term investment in Russian securities. We are doing this for bank deposits to protect private deposits, and this tool is, of course, much sought after. I also propose thinking about the co-financing of such savings by the state. At the same time, I would like to point out that market fluctuations and retracements are part of the stock market. Once again, I would like to stress that it is necessary to protect the interests of citizens and guarantee the safety of their savings. In fact, we are talking about a mechanism that is similar, as I mentioned earlier, to the bank deposit insurance system. Please work through this solution. I know that, overall, the Government sees this as a good idea, is thinking about it, and already has come up with some solutions.
Colleagues, I would like to end my opening remarks here.
I will be happy to listen to what you have to say, your thoughts, comments or suggestions on what you think about working in Russia, what difficulties or problems you have, what you would like us to know, and what advice you have for us. We always heed your recommendations.
Thank you very much.
News Source Russian President official Website, All items published as IBG NEWS listed with the esteemed office. All images videos copyright with the Official Website and their respective rights holders.
[…] articleRussia Calling! Investment Forum Next articlePM Modi greets BSF personnel on their Raising […]