Vladimir Putin’s Q&A Session At The Eastern Economic Forum

By Chris Devonshire-Ellis

Following is an extensive Q&A session entered into by the moderator, Ilya Doronov and President Putin. Doronov is a Russian journalist, television presenter and radio host – interestingly not known for giving his subjects an easy time.

I have divided the Q&A into different sections for ease of reading and subject relevance. These include Developing the Russian Far East, Sanctions, Russian Re-Investment, State-backed Investment, the Economic policy, the Ruble/USD rate, Russian taxes, the proposed India-Middle-East-Europe Corridor, Russia’s auto industry, energy prices, state audit, patriotism, foreign researchers, state privatisation policy, the Russian space programme, Elon Musk, Russian population demographics and migrants, the Russian and US Presidential elections, and Donald Trump.

Doronov’s questions are identified with the initials ID and Vladimir Putin’s responses as VP. Additional clarifications by me are marked CDE.

ID: Mr President, it is very good that you mentioned the priority importance of the Far East, because many people could think that our priority is in the other part of the world, in the West, and that all our efforts are focused on it.

VP: We have many priorities, but the Far East is one of the top priorities.

ID: It is the third time you have said it, and we will know now that this is really so. You mentioned the M-12 motorway. I am from Vladimir, which is located 180 kilometres from Moscow, but it took us six or seven hours by car to cover it, for example, during the May holidays. It was a real headache. We will use the new motorway now and see if it is better. I have several related questions.

Developing The Russian Far East

In your address, you said – I have taken down your words – “a historical, global task” regarding the Far East. This made me think about an analogy, that the plans you have made public can be compared to what Stolypin did for the development of Siberia, or to the Soviet industrialisation plan.

Here is my question: Do you think that these global domestic plans would have been made and implemented if no sanctions had been adopted [against Russia], first in 2014 and later in 2022, if the borders had not been closed, and if we had not been deprived of depositing capital [abroad]?

Here are the statistics to prove the point I have made in my question. They concern the special administrative district on Russky Island, where the number of residents has increased by 43,000 to 60,000 which is snowballing growth that took place after the adoption of the sanctions.

VP: Firstly, we launched that project 10 years ago. You asked me about it, and I replied that we started doing this long before the events that took place in the past few years, in 2014, and we did it because we saw the global economic development trends. We saw the rise of new centres of influence and economic development. I believe I do not need to name these countries, which everyone knows about. We saw what was changing and how, and we can see today that these trends have not slowed down but are gathering momentum.

But what happened after 2014, after the Western countries supported a coup in Ukraine and started the war in Donbass: many processes began to accelerate. In this regard, we can only feel sorry that we did not implement the plans on infrastructure development, including the railway network to the Far East in good time.

Because, honestly, the Government miscalculated to a certain extent and believed that there would not be that much cargo shipment volume; even over the past few years it has been much bigger than one could imagine. But it is okay, we are making it work, there are plans that were developed earlier and consequently it will be easier for us to implement them even within a short time frame.

Just now we, together with the moderators and our colleagues, discussed the development plans for the Eastern Operating Domain. There is money, investors are interested because there is a market, and they are ready to invest their own money because they can see the profits from such a big cargo turnover. A good return on investment is guaranteed. That is why this work began a long time ago, and the events in the global economy over the past years have given a boost to our work in the Far East.

ID: Still, the phrase “do not make the same mistake twice” was said twice today. Did not it dawn on everyone, or what?

VP: You know, if you are interested and probably many businesspeople are interested, there is a trend: earlier, many of our businesspeople created some platforms for themselves and then saw that their legally earned money got confiscated. You know, this is not my money, but the money of our companies and entrepreneurs, and it is simply beyond the pale. People who have been doing this do not understand that there will be negative consequences for them, it seems that they still do not understand that.

Sanctions Rebound

Take, for instance, restrictions on dollar settlements. What will it lead to? It has resulted in a situation where all countries are now considering creating their own tools, new settlement systems and are contemplating whether they should keep their savings in the US or somewhere in Europe, and if it is viable to invest in these countries’ securities.

I can assure you, I know this is happening. Of course, everyone will give it some thought. Our gold and forex reserves have been frozen but we have already earned twice as much. It is not about these US$300 billion, but the shattered confidence in those who are doing it. They are undermining trust in them. The same is happening in trade and restrictions on trade.

So, it is their own fault that they will inevitably face negative consequences, it is already happening. This is not what we wanted, but it is an objective process related to the increasing number of rapidly developing economic centres.

Reinvesting In Russia

ID: And those who come here, who return to Russia…

VP: I will now talk about stepping on a rake. Nevertheless, we can see that logistics chains and goods deliveries have now virtually been restored, and everything has been normalised. We can see that this is also linked with the national currency exchange rate, including the restrained return of foreign currency revenues, to put it mildly, and a desire to deposit something abroad once again … We can see this, and we understand everything. We need to reach some agreement with the business community, and they should understand and proceed from the premise that it is more reliable to operate here. Consequently, they should not step on the same rake. I am confident that those whom I am addressing understand me.

ID: Actually, my next question has to do with relations between the state and the business community, including those who are returning here, who are coming to Russky Island. I interviewed Andrei Belousov ahead of the St Petersburg International Economic Forum, and I asked him how the state and the business community should interact. He said that they should collaborate as partners, with the state being a senior partner, while the business community is a junior partner.

VP: He is talking like a former State Planning Committee official. We should be equal partners.

ID: Nevertheless, you have already said that they should be equal partners. In principle, do you get the impression that the state’s presence in the economy and in business is becoming excessive?

VP: We are hearing this, and they are talking about this all the time. Yes, we have major companies, especially in the energy sector; however, private companies are developing rapidly, and we support them, including here in the Far East.

State Backed Infrastructure Investment

Look, we provide state-backed infrastructure investment for all investment in the Far East. In the past three years or so, we have invested an estimated US$15 billion in business support infrastructure. Additionally, we have invested US$8.5 billion since early 2023 alone. We will be investing an additional US$33 billion in the next three years. This also concerns many other areas. We are incentivising the work of our companies and creating privileges for them, especially here, in the Far Eastern region. Let us stay here, on this territory.

I mentioned the priority development areas earlier. They enjoy many benefits related to paying social security contributions, profit tax, or property tax. If you take the Kuril Islands, they have twice as many benefits as the priority development areas. So, cooperation between the state and business brings good results. We will continue to do this.

Do you know what else is critically important? I think it is important that a very good dialogue has developed between the Government and the business community over the past decade, or maybe even a couple of decades. The Government almost never makes any economic decisions without holding prior consultations with business associations. We always strive to take into account the opinions of our business partners, as well as the trade unions.

CDE: It is worth mentioning here that in terms of China, and especially during the two decades from the early 2000’s to 2020, the simple mantra for VC and PE funds was ‘follow the Government policy’ because that would be where the opportunities would be. It was a policy that paid off – which should be of note to Russian investors.

ID: You mentioned priority development areas and tax preferences. It all sounds good. But I have talked to experts in this field, and they say that more is needed. For example, infrastructure – gas, electricity, and all the rest – needs to be built in these areas. This is not enough.

VP: Agreed. By the way, the number US$25 billion – this is how much we spent on infrastructure in recent years. We spent US$8.5 billion in the first six months of this year, and another US$33 billion has been set aside. That is how we are doing it, and we will keep doing it. We realise that investing in infrastructure should be our way of supporting businesses. So, we are doing this and will keep doing it in the future.

Russia’s Economic Position

ID: I have a question about the ruble exchange rate. A year ago, when we were on this stage, the dollar was about 60 rubles. This summer, it went up to 100, or even higher. I checked before the session and it is 93 rubles to the dollar now. Volatility is extremely high and, as of late 2022, the Russian currency was the most volatile currency in the world.

How can you make any projections in a situation where you have no idea what is going to happen to the national currency?

VP: Yes, this is, of course, a question that needs a thorough researcher such as the Central Bank or the Government, that is, the financial authorities. Overall, I do not think there are any issues or difficulties that cannot be overcome.

This is connected with many factors, including with whether our major exporters must or must not repatriate part of their foreign currency proceeds. It is connected with the fact that during the first phase, which you mentioned, when the dollar was 60 rubles, the logistics chains had yet to be established for imports. Now, imports are coming to our market in greater volumes, which means that foreign currency is in greater demand. There are other factors, but they are manageable. We see and understand them, and the Central Bank sees them as well.

Of course, the Central Bank had to raise the key interest rate to 12 percent. Among other things, it had to do it because inflation had increased a little bit. Where does it stand now? Is it 5.4 percent, or 5.2 percent? I do not remember the exact number, but it is somewhere around 5.2 percent in annual terms. So, the Central Bank could not fail to respond to these developments. I think that its decision was correct, and timely too. This will mean there are fewer opportunities to take out loans, it will constrain the economy and inhibit its development to a certain extent. However, this factor has a major bearing on mitigating inflationary risks. Everything must come at the right moment.

That is to say that we remain in control of the situation, and I will not go into too much detail because this is quite a delicate topic. But overall, we have all it takes to mitigate these risks.

ID: Still, as far as I can see, the state does intend to play its regulating role. Will there be any restrictions? I am asking this question because last time the ruble started losing its value, Aide to the President Maxim Oreshkin had to write a column and the ruble went up the very same day. There was also [VTB Bank Chairman] Andrei Kostin who said yesterday in an interview with RBC that there were loopholes for taking money out of the country.

VP: What are they doing? They are just trying to scare people by proposing that they cooperate on peaceful terms and undertake specific actions or else, they say, we will impose restrictions and force you to repatriate your revenue, etc. However, no one will make any sudden moves in this regard.

ID: Let’s talk about the Central Bank and the 12 percent interest rate. There will be another meeting on Friday, and it may well be that the rate will go up even higher, making loans even more expensive. How do you expand manufacturing and take out new loans against this backdrop? Funding is becoming increasingly expensive.

VP: I have already said that the key interest rate does affect funding costs, of course, and the rates private banks charge, which in turn constrains lending and stifles economic growth. Overall, we see that lending has been quite active. This is my first point.

Second, we see that consumer lending has been growing even faster. In this sector, we also have the tools to mitigate these risks. I will not elaborate on this too much either, so go ahead and talk to [Governor of the Bank of Russia] Nabiullina, she will tell you.

Of course, we need to influence things, but if we miss a situation that will lead to uncontrollable inflation growth, it will be ultimately even worse for the economy – because it is nearly impossible to make business plans amidst high inflation. There are no good or very good decisions here; there are only difficult decisions, and they need to be adopted promptly. So far, both the Central Bank and the Government have done so, and rather effectively.

With growing loan costs, we have created a whole array of tools for major industries and the largest projects that serve the interests of the entire national economy. We have a set of support measures for obtaining loans, with certain preferential terms and an array of tools to support companies that make significant investments, and this is implemented jointly with the government. I have already mentioned industrial platforms and so on. Businesses are aware of them; they will continue on.

The thing is, if the costs of loans grow, the Government will probably have to consider increasing funds for these tools. This would mean additional expenses, and there is the other side of the coin, namely the budget’s sustainability and balance, and so on. But all this can be worked out.

ID: As to mortgages, you mentioned the programme for expanding preferential mortgages here in the Far East. The Central Bank executives probably winced as they have repeatedly expressed their opinion that preferential mortgages are bloated in Russia, and they see risks. Do you see risks here?

VP: Yes, there are certain risks, but we see and address them. As for the Far East, we have only 12.5 million people living beyond the Urals; this is not a burden for the entire country and its economy.

ID: And the last question in this section before we give the floor to the Vice-President. This is a question that concerns business: will taxes be raised or is this not necessary?

VP: The government sees no need for that so far.

ID: This answer matters to the entire business community.

The India-Middle East-Europe Corridor

ID: Since we talked about logistics: Belt and Road, the Chinese initiative, marks its 10th anniversary this year. We have the Greater Eurasian Partnership project. But after the G20 summit it was announced that – I will specify the countries – the US, the European Union, Saudi Arabia, the United Arab Emirates, Israel, Jordan and India have concluded work on a historic, as it was put, agreement on a new India – Middle East – Europe economic corridor

CDE: IMEC, see here

Russia is not included, nor is China. Do you think this initiative will affect the implementation of our own and Chinese projects and what does it mean for us in general?

VP: I think it is for our good; it will help us develop logistics. First, this project has been discussed for a long time, maybe for the past several years. Truth be told, the Americans joined it at the last minute. But I do not really see why they would want to be part of it, except maybe in terms of some business interest.

In the meantime, the additional traffic of goods along this corridor will be in fact an addition to our North – South project. We do not see anything here that could harm us in any way.

The North – South corridor goes to the Persian Gulf and then to India. If there is another route, I believe it includes Israel, we will be able to reach the Mediterranean through the Black Sea and use this corridor. The colleagues who presented this project need to consider it carefully. This is only a memorandum of intent so far.

But we should see the economics of this project because cargo is supposed to reach the sea by railroad, and then it will be loaded aboard sea vessels, and then travel to either the UAE or Saudi Arabia; it will be once again reloaded onto the railroad. And this double transshipment and its impact on the economics should be calculated.

The head of our leading company Russian Railways, Mr Oleg Belozyorov, agrees with me so it seems I hit the nail on the head and it is really about the economics of it, which should be thoroughly calculated.

In terms of time, if we go from Northern Europe, from St Petersburg to Mumbai, it will take the same amount of time as via the North – South route. I reiterate, the economics should be considered. I think that our route might be more efficient. Also, interest in using the Suez Canal will not go anywhere. I do not think it would somehow have a negative impact on the Suez Canal. I do not believe that will happen.

And, finally, the last thing. Cargo shipment volumes are growing every year, and I think that the more of these new routes the better.

Russian Auto Industry

ID: We are in Vladivostok, where many people have right-hand drive cars. I will explain the essence of my question, and the audience will most likely split into two equal or unequal parts. One will be thinking about what they are going to do, and the other will smile because this does not concern them.

First of all, you are lucky to have an Aurus, a Niva and a Volga. Many other Russian officials are not so lucky, considering what you said about driving Russian-made cars.

The first such attempt was made in the 1990s, and it fell through. Who can guarantee that we will succeed this time? And which cars should they drive?

VP: You know, we did not have domestically made cars then, but we do now. It is true that they look more modest than Mercedes or Audi cars, which we bought in vast amounts in the 1990s, but this is not an issue. I think that we should emulate many of our partners, for example, India. They are focused on the manufacture and use of Indian-made vehicles. I think that Prime Minister Modi is doing the right thing in promoting the Make in India programme. He is right.

We have [Russian-made] automobiles, and we must use them; this is absolutely fine. This will not lead to any infringements of our WTO obligations, absolutely not. It will concern state purchases. We must create a certain chain regarding what cars different classes of officials can drive, so that they will use domestically-made cars.

You probably know about the proposals to continue buying these cars. It would be easy to do, because the logistics are streamlined.

ID: Do you mean the purchase of foreign cars?

VP: Yes, I do. But I have also said that I have my doubts about continuing this practice, to put it mildly.

The Government and the Presidential Property Management Directorate have coordinated a system showing what class of cars officials can drive. Let them use Russian-made cars.

ID: When will we see the first official do this?

VP: They will start doing this now. The acquisitions will begin shortly. It concerns practical matters. The acquisitions will begin shortly. Franky, I do not know when exactly, but it will begin soon.

ID: I would like to ask about Chinese cars. The import of Chinese cars has increased by 543 percent this year. According to forecasts, nearly half a million Chinese cars will be imported this year. Is there a danger that they will dominate our market and we will become dependent on the Chinese car industry?

VP: No, we are working on this project together. Take the Great Wall cars, which started to be assembled near Moscow.

ID: Haval is assembled in Tula.

VP: Yes, in Tula. The governor has presented one to me. It is a good car. We are developing our automobile industry. Thankfully, we are doing this increasingly more on our own basis, and we are increasing localisation. And soon Moskvich cars will be produced as well. The Moscow mayor told me recently how that project is progressing. And our Lada cars will be improved. We must do this on our own basis.

Of course, when we were assembling cars almost 100 percent from foreign parts, how was it our own production? We will increase localisation levels. Yes, it takes time, but it is the right thing to do from the point of view of developing the automobile industry in our country on our own foundation. We are not going to close down completely, or engage in DIY business. Did we make Aurus? We did.

CDE: The Aurus is a fully Russian made luxury car. See here.

ID: But how much is it?

VP: Yes. The price is high because they do not produce enough. Once it goes into serial production, the price will be cut in half. Yes, it takes time, but it will be our own development. It is about acquiring and restoring competencies, it is about taxes and jobs. I do not need to tell you that. Everyone knows what goes into it. But at the same time, we will cooperate with those who want to work with us. But Russian officials must drive domestic cars.

Energy Prices

ID: Fuel prices are also car-related. Diesel is already over 61 rubles, and petrol is also becoming more expensive. I see that many people have a question in their eyes: what is going on? And I see this in all sorts of kitchen-table chats, where people are now discussing fuel prices. Why is this happening? Are we going to fix this?

VP: Yes, of course, the Government is working on it. I think our petroleum product producers are right. The Government should have reacted to that in a timely manner. Appropriate decisions were made, but not long ago, in order to maintain parity between external market prices and domestic market prices. Then, these mechanisms were cancelled. The Government did not react in a timely manner to changes on the global market due to rising oil prices.

However, this is a regulated position, and I just talked to Mr Sechin (Russian Oligarch and Government official) yesterday, and he has a position of his own. But in general, producers and the Government have agreed among themselves on their actions in the near future. It is very important for us to provide agricultural producers with diesel fuel.

ID: Yes, the Ministry of Agriculture has already sounded the alarm.

VP: Yes. There was a physical shortage of diesel fuel. But now it is physically available, and the issue is about regulating prices. There used to be multiple mechanisms. In 2009, when I was head of the Government, a decision was made – a whole thick folio – regarding our interaction with the fuel and energy companies, and everything was laid out in detail.

By the way, this resolution remains in force, but it is not being applied. Other tools are used here, the so-called damper. I have already told you that it is about striking a balance between external and internal prices. But it was halved and lost its prior effectiveness. The tools are known, and the agreements are in place. I hope this will make a difference in the actual state of affairs.

Russian Audits

ID: I have a question about the Accounts Chamber – it has been without a head since November last year. What is the reason? Alexei Kudrin was so good that they cannot find a replacement? If so, why did they let him go to Yandex in the first place?

VP: First of all, if he wanted to go on to work in business, we cannot force him to stay. Even though he was indeed the best fit for the job; he had been a good Minister of Finance, too. The Accounts Chamber is working and it is quite effective. It has carried out about 1,000 audits. I am not sure about the figure, but I think they revealed 1.6 trillion rubles (about US$17 billion) worth of violations.

The Accounts Chamber has an acting chairman, but this does not affect the quality of its work. I think this personnel issue will be resolved when the time comes, when the Parliament and the Government select suitable candidates. It is not something that hinders the agency’s work.

Patriotism

ID: I mentioned Yandex for a reason. Recently, Arkady Volozh created his own official website, where he says – I will quote it verbatim – that he is “a Kazakhstan-born, Israeli tech entrepreneur” who “co-founded NASDAQ-listed Yandex N.V., one of the largest internet companies in Europe.” I will remind you that Volozh was born in 1964, when Kazakhstan was part of the Soviet Union, but there is no mention of the Soviet Union on his biography page.

We have other businesspeople who publicly express their opinion, including their view on the special military operation. Where would you say is the line that should not be crossed? A line that even those who have contributed as much value to the nation as Yandex, should not cross?

VP: Look, it is not for me to draw this line. It should be in the minds and should remain on the conscience of those people who make certain statements. I would like to emphasise that in most cases people make such statements because they want to preserve their business, to preserve their assets, especially if they have moved and decided to bind their lives to another country.

He lives in Israel, and I can imagine that, to live a good and prosperous life there and have good relations with authorities, he has to make certain statements. He had been silent for a long time before he decided to make a statement. God grant him health and may he live well there. Frankly speaking, we are not particularly bothered by what he said.

But in general, if a person grew up on this soil, got an education and became successful, he should have some respect for the country that gave him everything. I am not referring to Volozh – he is a gifted person who created a really good company and handpicked a team – I am not referring to him, but in general.

Yes, one can imagine that a person does not agree with what the current authorities are doing. Do they have the right to express their views? By all means. But there are quite a few fine points here.

We can side with our geopolitical adversaries and play along with them, thus damaging our country’s interests, or we can act otherwise. There are many nuances here. People decide for themselves who they are. Do they have a sense of national identity? Or do they prefer to mimic and feel like someone else, not a Russian person born in the Soviet Union? A person makes their own choices.

Rest assured that ordinary citizens of Russia, our people, understand everything perfectly well and there is no way to mislead anyone. If someone has chosen a new destiny, let them try to make themselves known there, to prove themselves and to achieve results. Because whoever they may be, whatever results they have achieved, they have achieved them here, and it is not guaranteed that they will achieve the same in some other place. This is their choice.

Foreign Researchers

ID: One more question to follow up on the topic of new destinies: an article by an independent expert from Glasgow was published in the Russian journal Voprosy Ekonomiki in July. The article is titled “Non-Payments in the Russian Economy of the 1990s: An Unforeseen Institution.” You know who wrote it? Anatoly Chubais did. He is presented in this article as an independent British researcher. I have a question: do you trust British researchers at all?

CDE: Anatoly Chubais is the Former Chief of the Presidential Administration of Russia and an economist, who was responsible for privatization in Russia as an influential member of Boris Yeltsin’s administration in the early 1990s. He left Russia after the beginning of the Ukraine conflict.

VP: You know, I trust researchers regardless of nationality. If they are serious people, serious researchers, I do not just trust them, but I admire their work, their lives, and the results of their work, because a real scientist is immersed in the subject he or she is working on. These people put their whole life into the cause to which they have devoted it, even at the expense of their own lives. Examples in our country and abroad abound.

If they are fooling around, they are certainly not scientists, but rather quasi-scientists who entertain the public. It is not a bad thing either, let them fool around. Although a better choice would be to go to the circus and take in a show.

The fact that Mr Chubais is hiding out in Israel and involved in the UK – I am not sure why he is doing that and why he ran off. It may also have to do with the fact that there are complex processes going on in the nanotechnology industry which he headed for many years. There is a big hole there, a huge financial hole. There are no criminal cases or prosecutions involved. Maybe it is connected with that, and he fears that in the end it will lead to a criminal case and that is why he went underground in Israel.

But he is no fool. I have not read this article. But, by all appearances in Russia, he failed in his job as head of a large company that was created to develop nanotechnology. At least from an economic and financial point of view he failed.

State Privatisation

ID: The question is about privatisation and, oddly enough, deprivatisation. New privatisation in Russia is a widely discussed idea, but deprivatisation – the process whereby the state takes over assets – is a much greater concern to businesses today. There are several precedents.

Businesspeople say they are not sure if some rules have changed and they are uncertain about the future now. The issue is critical. How would you comment on this?

VP: No, there is no deprivatisation planned, there will be no deprivatisation, I can tell you that for sure.

The prosecutor’s office is investigating certain cases, certain companies, but that’s different – law enforcement agencies are authorised to investigate what is happening in the economy in specific cases, but this has nothing to do with any policy on deprivatisation. This will not happen, and Igor Krasnov (the Russian Prosecutor General) agrees.

ID: So, businesses can be sure that no one is going to make their life a nightmare, as you said several times?

VP: No one is going to make anyone’s life a nightmare, but everyone must comply with the laws of the Russian Federation. And if they do not, then they should be prepared for the Prosecutor’s Office, the Investigative Committee and the Accounts Chamber investigating what is happening, including in the economic sphere, and urge everyone to comply with Russian law. But no one is going to be prosecuted simply for doing business.

Moreover, I would like to emphasise once again, especially in today’s conditions: in general, Russian companies behave in a highly responsible manner – they try to keep their teams, establish new logistics chains and be active. Of course, in many cases, business needs a new class, a young class of entrepreneurs – that is also true. But no one is saying that we need any deprivatisation or redistribution. No, this is not going to happen.

ID: The Head of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin was also interviewed today. I will quote: “There are questions regarding the new owners of nationalised assets. If an asset becomes state property, where does it go?” This is a major concern for business.

VP: If something becomes state property, it goes through the procedures prescribed by law. If the asset is taken into state agency management, these agencies manage it in accordance with the law, and the law insists on public tenders.

The Russian Space Programme

ID: Today, as it happens, is the date, I will ask you to applaud as well, since on September 12, 1959, the Soviet Union launched the Luna-2 interplanetary station. It was the first vehicle in history to reach the surface of the Moon. Let’s say thank you to those who built that station. And as we know, Luna-25 failed at that.

So, the question is: is it not time for us to think about introducing private initiative in space exploration as well? Elon Musk is successfully launching space vehicles. Are you not upset by the fact that we have begun to lose our leading position in space exploration?

VP: No. You see, space exploration is a complex and responsible endeavour that is tied to high technology. We do not just have practical experience here, we have excellent competencies.

As for landing on a site where no one has ever landed before, yes, it is a difficult job, of course, and it will be analysed accordingly, and the work will continue. It is a pity, of course, that the moon landing did not take place, but that does not mean that we are going to end the programme. We will keep working on it. Have there not been any incidents of that kind in other countries, even more serious ones with grave consequences? Of course, this is always about dealing with uncertainty. So, there is nothing unusual here, although we would like to see everything succeed next time.

But we will continue this work and reinforce certain areas of it.

As for private business, Elon Musk is certainly an outstanding person, it must be recognised, I think this is recognised all over the world. He is an energetic and talented businessman, and he is making a lot of things happen, including with the support of the American state. For our part, we also plan to develop this area. Roscosmos has pursued projects that have been supported by the Government to the effect that we will attract private investors to this area of activity, and we are already attracting them quite successfully.

ID: There is news that you are going to visit Vostochny [Cosmodrome]. What should we expect from this visit?

VP: I have a programme for my visit, and you will find out everything when I get there.

CDE: He visited to hold meetings with North Korean leader Kim Jong-Un. See here.

Population Demographics

ID: The problem of demography concerns both Russia and the Far East. You have just said that 12 million people live beyond the Urals. There are official statistics: according to Rosstat, over the past year Russia’s population decreased by 555,000 people.

Why do you think, despite all the measures taken by the state, we are failing to reverse the demographic situation?

VP: In general, I think populations are falling everywhere: if there is such a downward trend, it is very difficult to overcome. This is due to the huge number of inputs that are difficult for non-specialists to understand.

This is due to the standard of living and many priorities that families and women of childbearing and reproductive age have. Because an education is needed, then it is necessary to start a career, so the first child comes at the age of 30, there is no time for a second one now, and so on. There are a lot of factors here.

As for Russia, I have already spoken about it many times, experts know this: we had two huge declines, which have given us a relatively small number of people who can reproduce new progeny: in the years 1943–1944, when there was a sharp drop in the birth rate, and in the early 1990s, unfortunately.

The early 1990s is also when Anatoly Chubais and his team were active. You know, we can laugh but they did a lot to take steps towards a sharp transition to a market economy in Russia. It is hard to say who could have done better and how. It is always easier to criticise.

Anyway, they adopted harsh measures, which resulted, among other things, in the social system collapsing almost completely, in mass impoverishment and the birth rate dropping sharply: like during the Great Patriotic War, in 1943–1944.

So, these two big declines go on in waves, from time to time, and so we face again this demographic pitfall after a few years – after 10 or 15 years I think: people reach childbearing age, but fewer and fewer by definition, and now we are in such a phase.

However, a lot has been done for this. There was a moment when our birth rate increased and reached positive numbers.

What we should pay attention to is life expectancy, which is growing in Russia. In 2021, the average life expectancy was 71 years old, and now it is more than 73, even 73.6 I believe. Also, it is necessary, of course, to reduce the mortality rate and raise the birth rate. There is another way: a migration influx. And so, we need to work on every factor.

You have mentioned that we are carrying out a whole range of measures to support families with children, motherhood and childhood; I will not go into them now, because it is whole big collection. We have introduced maternity capital; we are increasing its size; we have introduced maternity capital for the first child, and so on. We need to step up these measures and work in the healthcare sector to support motherhood and childhood. We will do all this.

Only just recently we recorded natural population growth. Unfortunately, we were unable to maintain this trend. We need to work hard in all areas, including, by the way, the information sphere, increasing the prestige of motherhood and fatherhood with the support of the public and the media, to do this.

We must inspire people to have a good healthy family, promote traditional values, including religious values too. This is a whole host of actions. We will work on it, but this must surely be done by the entire society.

ID: I have a grandmother, who is 96 years old, she was the tenth child in the family. Today you practically never see such families.

VP: Why? They exist. We try to support large families, where there are ten or more children.

Migrants

ID: A question that goes beyond the topic of demography. Demographers at the Higher School of Economics have calculated that in order to maintain Russia’s population at 146 million people, 390,000 migrants must enter every year for 80 years. In the negative scenario, 1.1 million migrants per year will be required.

Isn’t there a danger in this? Won’t we become like some parts of the US or Belgium? For example, something has been happening in Antwerp with migrants where police can not enter the area.

VP: Yes, of course, we must keep this in mind and under no circumstances allow that to happen in Russia. This is a very sensitive moment in the life of the Russian state. The economy, of course, requires the use of migrant workers in certain sectors, most of all in the construction sector. I think that is where 33 percent of all migrants work.

In general, we do not have that many migrants working in the labour market: just 3.7 percent of the total number of workers. This is a very sensitive issue, related to the economy, the social sphere, and the moral condition of society.

By the way, it is easier for us than it is for the European countries or the States, because we have an influx of workers from the former Soviet republics. It is easier for us to work with them; the leaders of those countries understand the situation and are ready to cooperate.

We are offering pre-immigration training programmes with many countries. What are they meant for? They help people who plan to work in Russia to learn the Russian language and the laws of the Russian Federation. We need these people to understand that if they move to another country, they must respect our traditions and culture, and so on. There is a lot of work to be done. We need to continue working with them.

By the way, this is also important for our citizens, the citizens of the Russian Federation so that immigrants do not act as an irritating factor for them. This is our priority. We certainly must think about the interests of Russian citizens first.

So if we accept immigrants, we certainly need to choose those who will help improve Russia’s economic development.

There is another alternative, and it is simple and complicated at the same time. The simple part is that we may not need such a large immigrant workforce if we introduce new technology that eliminates a lot of labour.

This leads us to resolving another problem – the development of technology, the upgrade of facilities and equipment and so on. This is the difficult part, because this cannot be done overnight. It requires substantial investment, confident actions and hard work. There are many ways to approach this difficult problem – we just need to work on it. And we will do it.

Russian and US Presidential Elections

ID: Now I will ask a question that becomes more relevant and pressing every day. I will begin with the regional elections that just ended. Several regions in the Far Eastern Federal District voted on National Election Day – in fact, Russians could vote in the course of three days this year.

Three years ago, when you were asked if you were going to seek re-election, you said you had not decided. Now we are six months away from the presidential campaign. Are you still undecided about running?

VP: The law says the parliament is to appoint the next election at the end of the year. When the decision is made, the election will be announced, the date will be appointed, then we will talk.

ID: Ok, we can ask you then. Then I have a question about the presidential election in the United States. What are your expectations regarding this? They are taking place next year, and some strange things are happening there; we understand that Trump could be taken into custody at any time.

VP: Why should we be concerned about that? I believe there will be no fundamental change in US foreign policy towards Russia, regardless of who becomes President.

It is true that we hear Mr Trump say he can resolve many serious problems, including the Ukraine crisis, in a few days. Well, that is something to be happy about. It would be good. But, in the grand scheme of things, despite the accusations of him having special ties with Russia, which is complete nonsense and absurdity, Trump imposed the greatest number of sanctions on Russia during his presidency. So, I find it difficult to say what to expect from a new President, whoever it may be. It is unlikely, though, that any crucial change will take place, because the current authorities have conditioned American society to be anti-Russia in nature and spirit; that is how things are. They did this, and it will now be very difficult for them to turn that ship around. That is the first point.

Second, they view Russia as an existential and constant adversary or even an enemy and implant this idea into the heads of ordinary Americans. This is not good because it fosters hostility. Despite this, there are many people in America who want to build good and friendly business relationships with us and, moreover, share many of our positions, primarily from the perspective of preserving traditional values. We have many friends and like-minded people there. But, of course, they are being suppressed.

So, we have no way of knowing who will be elected, but whoever it is, it is unlikely that the anti-Russia policy of the United States will change.

As for the persecution of Trump, well, in today’s conditions, in my view, that’s a good thing.

ID: Why is that?

VP: Because it reveals the rotten American political system, which should not be able to claim it can teach others about democracy.

Everything that is happening to Trump is the political persecution of a political rival. That is what it is. And it is happening in the eyes of the US public and the whole world. They have exposed their domestic problems. In this sense, if they are trying to fight us, it is good because it shows, as they used to say in Soviet times, the beastly appearance of American imperialism, its beastly snarling grimace.

CDE: Significant audience appreciation at this remark, followed by the end of the session.

Vladimir Putin’s Speech at the Far Eastern Economic Forum, which preceded this Q&A can be viewed here.

Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. He can be contacted via asia@dezshira.com

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