Meeting with heads of international news agencies 2019-06-06 15:45:00 St Petersburg Vladimir Putin met with heads of the world's leading news agencies. The meeting took place on the sidelines of the 2019 St Petersburg International Economic Forum for the sixth time. The conversation with Vladimir Putin involved representatives of news agencies from Great Britain, Germany, Iran, Spain, Italy, China, the United States, France, and Japan; Russia was represented by TASS Director General Sergei Mikhailov. Traditionally the main topics of the meeting were current issues of Russian domestic and foreign policy. *** Transcript of meeting with heads of leading international news agencies President of Russia Vladimir Putin: Ladies and gentlemen, good afternoon. I am very glad to see you all. It is our tradition to meet regularly, at almost every St Petersburg forum. I would like to welcome you once again, to wish you a pleasant, successful and rewarding time in St Petersburg. This year, my meetings with forum guests start with you. And this is a good thing because we will do a little warm-up today, will have a short discussion, which will give me an opportunity, perhaps, to sense what might be of interest to our other partners who have come to the forum this year. I give the floor to Mr Mikhailov now, and then I will be happy to listen to each of you and, as far as possible, I will try to answer your questions. Go ahead, please. TASS Director General Sergei Mikhailov: Thank you. Mr President, We appreciate that you found the time in the packed schedule of the forum, as usual, for your annual meeting with the heads of the world's leading news agencies, which account for almost 90 percent of the global news landscape. Colleagues, I am very grateful to you for your continued interest in the forum, and the city of St Petersburg. I am sure that our conversation today will be as memorable and fulfilling as all the previous ones – and we are meeting for the sixth time. The St Petersburg International Economic Forum, which has had 21 years of glorious history, has kicked off once again. In the morning, we held a panel discussion, Mr President, where we talked about the role of the media in global conflicts. As I said, we are now in our sixth meeting. Every year, the participants change a little. You can see our new colleagues attending this meeting for the first time – there are four of them, and I will introduce each of them as we go along. New blood in this circle always organically merges with the experience of old-timers, making our dialogue ever more fruitful. Undoubtedly, our reporters appreciate the fact that you are meeting with them earlier in the day this time, not when it’s nearly dark, as you used to say, but before you give your speech tomorrow at the main plenary session of the forum. Special thanks for this. I cannot fail to note that today, on June 6, we celebrate the 220th birth anniversary of Alexander Pushkin. It is Russian Language Day, so the day is special for us and for the forum as well. TASS, as usual, has studied the main topics that our foreign colleagues raised in writing or in conversations before their visit to Russia. There are many different and very interesting topics, and you will hear about them, as our colleagues will ask you questions. But there is one thing that interests everyone without exception, so with your permission, I would like to ask a general question on behalf of TASS. We always started our recent meetings by agreeing that our planet is going through the most dangerous period of confrontation: countries flare up, entire regions blaze, there are sanctions, trade wars, fake news – this is the content of nearly all news feeds from all world agencies. They are talking about a new cold war. Every country is certain that it knows who is to blame for that. Why do we have to start our conversation in 2019 with the same question: why is the world not becoming any safer? Where is our civilisation going? Do you see the light at the end of the tunnel? What can the countries that are the main players in the political process do about it? This is a generalised question, Mr President. Vladimir Putin: If we look around at the murals, at the frescoes, look up – there is war everywhere. Unfortunately, this has been the case for ages. Human history is full of stories of conflict. It is true that all conflicts were followed by periods of peace. But it would be better to avoid the conflicts altogether. After the invention and creation of nuclear weapons, humanity has maintained a state of relative global peace for almost 75 years – relative, of course, with the exception of regional conflicts. Let’s recall Winston Churchill, who first hated the Soviet Union, then called Stalin a great revolutionary when they had to fight Nazism, and then, after the Americans developed nuclear weapons, he practically called for the Soviet Union to be destroyed. Remember his speech at Fulton that kick-started the Cold War? But as soon as the Soviet Union acquired nuclear weapons, Churchill initiated the coexistence of the two system concept. I do not think he was such an opportunist, but he worked with reality. He accepted reality. A clever man and a pragmatic politician. Little has changed since that time. We should just keep in mind, should understand what kind of world we live in, and what threats and dangers might await us. If we do not keep this “fiery serpent” under control, if we let it out of the bottle, God forbid, this could lead to a global catastrophe. Look, today everyone is addressing environmental issues, and they are right to do so, because there are global threats such as climate change, anthropogenic emissions, and so on. All this is correct. Even children are engaged in this, girls and boys all over the world. But they do not realize, these young people, especially teenagers and children, they are not aware of the global threat and serious challenge posed by possible global conflicts. This is something adult men and women should think about. However, I get the impression that these issues have somehow become commonplace, and have kind of been shifted to the background. This raises natural concerns. Our US partners upped and withdrew from the ABM Treaty. So, ladies and gentlemen, I want to ask you: Did any one of you go out with a poster and protest? No one, silence. As if this is the way it’s supposed to be. Incidentally, this was the first step towards a fundamental destabilisation of the global security framework, and a major step at that. Now, we are talking about our American partners terminating, also unilaterally, their INF Treaty membership. In the first case, they at least acted honestly and withdrew from the treaty unilaterally. However, in the second, apparently fully aware that they will bear responsibility for it, they try to blame Russia. Listen: you and your readers, your audience should open the INF Treaty and read it. Its articles clearly stipulate that short- and medium-range missile launchers cannot be deployed on land. The treaty says so outright. However, they went ahead and deployed them in Romania and Poland which is a direct violation. Check out what short-range and medium-range missiles are, and then compare them to UAVs. They are the same thing. Now, look at the specifications of the targets for the antimissiles. They are exactly medium- and short-range missiles. Everyone is pretending to be deaf, blind or dyslexic. We have to react to this somehow, don’t we? Clearly, so. They immediately start looking for perpetrators in Russia. Of course, the threat is serious. Renewing the START-3 Treaty is on our agenda. However, we can choose not to. Our latest systems guarantee Russia’s security for a fairly long period into the future, I mean we have made significant strides. And, I must put it bluntly, we have outrun our competitors in terms of creating hyper-weapon systems. If no one is interested in renewing the START-3 Treaty, we will not renew it. We have already said a hundred times that we are ready to do so, but no one is willing to talk about it with us. Please note that there is no formal negotiating process, and everything will expire in 2021. Mind you, there will be no more instruments to limit an arms race. Or, for example, deploying weapons in outer space. Do we understand what this means or not? Ask the experts. It means that each of us will have to live at all times, say, under a nuclear weapon. Permanently! But we are doing this, and doing it quickly. Will anyone ever think about it, talk about it, or show any concern? No, complete silence. Or, take low-yield nuclear weapons, or non-nuclear strategic missiles. What if a global-range strategic missile is launched from a submarine in the middle of the ocean? How do we know if it carries a nuclear charge or not? Do you realise how serious and dangerous this is? What if the other side responds right away? What will happen then? I am deeply convinced that this should be the subject of an open and absolutely transparent professional discussion, and the international community should be involved in this process as much as is possible in matters of this kind. In any case, people have the right to know what is happening in this sphere. To reiterate, we are ready to do this. Once again, we are confident in our security, but there is, of course, a concern about the complete dismantling of the entire mechanism of control over strategic armaments and non-proliferation. What’s the solution? It is in cooperation, period. The most recent conversation I had with President Trump, I must say, inspires certain optimism, because Donald told me that he, too, was concerned about this. He is fully cognizant of the amount of arms-related expenses incurred by the United States and other countries. This money could be used for other purposes. I completely agree with him. The US Secretary of State came here. We met in Sochi, and he spoke along the same lines. If they think so, we should take some practical steps towards making a joint effort. Again, today, talks between the countries with the most powerful nuclear potential are the most important ones. However, on a personal note, I think that all nuclear countries should be involved, including official and unofficial. Talking only with the officially recognised nuclear powers and leaving out the unofficial countries means they will continue to develop nuclear weapons. In the end, this process will grind to a halt even between the official nuclear states. So, by and large, we need to create a broad platform for discussion and decision-making. In this sense, of course, this could be the light at the end of the tunnel. Sergei Mikhailov: Thank you, Mr President. Tradition is important and we in Russia always treat women with respect. Out of a dozen people here, Bloomberg's Executive Editor Rosalind Mathieson is again with us. Your question is the first. Ms Mathieson is a prominent journalist and political scientist. She lived in Singapore for a long time and recently moved to London with her family. She became Bloomberg's Executive Editor in 2018 and is taking part in our meeting for the second time. I will tell you a secret. Rosalind is fond of Muay Thai, refuting the joke by Faina Rayevskaya that women are like rotten boards. I hope we’re not wrong and that this is true. Vladimir Putin: You are scaring me with boxing right away. Sergei Mikhailov: Just a warning. Rosalind, go ahead please. Bloomberg News Executive Editor for International Government Rosalind Mathieson: Thank you, Mr President. Muay Thai, I believe, has taught me the value and appreciation of fear and to confront and control fear, but I don’t believe I’d be brave enough to get in the ring with you. I have a question about oil – two questions, actually. Russia’s deal with OPEC is up for renewal this month. Do you favour keeping production at current levels or is your preference – for Russia and for OPEC – to increase output as we go into the second half of the year? And given the importance of oil to your economy and to Russia more broadly, I wanted to ask you about the comments this week by US President Donald Trump, who said that he had been told that Russia is pulling its people out of Venezuela. Moscow has said that this is inaccurate. Is Donald Trump just getting bad information or are you still concerned that the ultimate goal of the US is regime change in Venezuela, and perhaps the ultimate goal beyond that is to have control of Venezuela’s oil assets? Thank you. Vladimir Putin: I would like to say that I would not enter the ring with you myself. Not because you're a woman, but because everyone should paddle one's own canoe. I have never boxed. I can meet you on the tatami for some sparring, but there I'd have a solid advantage, I assure you. As for your questions, let’s begin with the final one on whether we withdrew our people from Venezuela or not and if we are afraid of a regime change. We are generally against interference in the internal political affairs of other countries. We believe it leads to grievous if not tragic consequences. And the example of such countries as Libya and Iraq is the best proof here. As you know, the road to hell is paved with good intentions. This is a well-known phrase and it’s obvious. So, it is necessary to be patient. It is possible to work with anyone, whether it is the opposition or the current authorities, but you cannot interfere in internal affairs. It is all the more improper to use sanctions and so on because usually they hurt millions of common people who have nothing to do with the authorities. The global economy suffers. Take, for example, the fact that Venezuela has cut its oil production in half over the past several years (in half!). If we look at the lives of the millions of people in Venezuela, who are they fighting: Maduro or the people? This is why we do not approve but, on the contrary, condemn such actions. And more than that, military interventions are invariably a disaster. According to my information, even the US’ allies do not support military intervention, none of them. I do not know anyone who does among Venezuela’s neighbours and even those who condemn Maduro for his domestic political processes. God forbid anyone supports this idea or does anything like that. About our people in Venezuela. We absolutely, officially sold weapons to Venezuela. We have not been doing so for quite a while now. You represent a publication and a television channel which deals with the economy. Under the contracts, we are required to service these weapons, and we must fulfil our contractual obligations. Our technicians are doing this and have always done this in recent years. Truth be told, not everything was technically clean there based on Venezuela’s priorities. There were things they wanted us to fix, and other things they did not want us to do. But we were obliged to do it under the contracts; otherwise we would face sanctions. That is all there is to it, nothing more. It is quite likely that our specialists did some work there, not only defence specialists, but our people from the manufacturing industry as well. Some of them left, some, maybe, returned. We are not creating anything specific there, no core military bases. Nor are we sending troops there, this has never happened. However, we have always fulfilled and will continue to fulfil our contractual obligations as regards military technical cooperation. This is my second point. The third point is about our relations with Venezuela and other oil producing countries. As I said, Venezuela cut production. This is due not only (you are probably aware of this) to the sanctions, but to the state of the oil and gas industry in Venezuela. Venezuela’s credit exposure to Russia is about $3.5 billion, but there is no debt. Venezuela pays regularly and in full and is servicing its loan obligations properly. Now let us move on to our relations with OPEC. We will continue maintaining these relations. We have no intention of joining OPEC, but we have developed a certain mechanism for cooperation and we will consolidate our positions to take a decision. Yes, indeed, there are some disagreements between us that stem from a different understanding of what can be called fair price. It is also natural, and there is no need either to speak about things you do not know. Look at the price per barrel of oil that is used to calculate, say, the budget of Saudi Arabia. It is much higher than what we use. Ours is $40 per barrel, and their price is higher. That is why, of course, they want to keep the price higher. We do not need to do this, given, among other things, that our economy is more diversified. Yes, we still heavily depend on oil and gas, but, of course, [our economy] is much more diversified than, say, the economy of the Persian Gulf countries. For this reason, our manufacturing sector is not interested in the oil price climbing too high. The average price of $60-$65 per barrel suits us, and we do not need to drive it higher. We have quite a decent margin, budget-wise, given that our budget calculations are based on $40 per barrel, which allows us to replenish our gold and foreign currency reserves and, in general, the government’s and the Central Bank’s reserves. So we have to consider all circumstances: the decline in oil production in Iran – by a million [barrels] – and Venezuela, as well as problems in Libya and Nigeria. We have to take all these factors into account, including the growth in consumption throughout summer. We have reached certain agreements. I will not get ahead of myself and will not tell you now what we think we should do in the second half of the year. But our colleagues in OPEC and we will take a decision based on a consolidated position. Sergei Mikhailov: Thank you, Mr President. Thank you, Rosalind. Mr President, yesterday you and President Xi opened a concert at the Bolshoi Theatre marking the 70th anniversary of diplomatic relations between Russia and China, and unveiled an exhibition prepared jointly by TASS and Xinhua for the anniversary. This year we will give our best wishes to our Chinese friends on the important date – the 70th anniversary of the establishment of the People’s Republic of China.  I want to introduce our reliable partners and old friends – TASS and Xinhua have had relations for 60 years – this is my friend, Xinhua President Cai Mingzhao. This is the second time Mr Cai has attended the meeting. You will remember that he had a big interview with you in 2016 which was widely and well quoted by the world’s media outlets. Xinhua takes part in annual St Petersburg meetings and the St Petersburg International Economic Forum. I will tell you Mr Cai’s secret – he has a dream to create an evaluation system for Chinese restaurants around the globe by awarding them stars similar to Michelin’s. Nobody doubts the reputation of China’s chefs, the more so that in my opinion the best Chinese chef in Moscow is the one at the Xinhua cafeteria. Please, Mr Cai, go ahead with your question. President of Xinhua News Agency Cai Mingzhao (retranslated): Thank you very much, Mr President. In June 2016, I interviewed you, and I still remember that time. Let me thank you again for visiting – together with President Xi – the photo exhibition dedicated to the 70th anniversary of establishing diplomatic relations. We know that this year’s main slogan at the St Petersburg forum is Creating a Sustainable Development Agenda. We know that you were involved in helping the Russian economy overcome the challenges it was facing, and it is beginning to recover. I would like to know about your specific plans and measures for the further recovery of the Russian economy, plans for stepping up economic cooperation with China. Which key areas could you single out? Vladimir Putin: As for our plans on Russia’s economic recovery, you said yourself that we have already overcome the difficulties that began several years ago for many reasons. The sanctions also played a role but there was more to it. In fact, they did not play such a substantial role. Primarily, it was due to lower prices on our traditional export commodities, such as, of course, hydrocarbons, some metals and hence, on chemical products linked with this resource. Plus, of course, there was pressure of sanctions. But we not only overcame the recession but also entered a path of sustainable growth. This was linked to the foreign economic environment but there was more to it. It was also linked with domestic economic factors and factors related to Russia’s economic policy, primarily the steady macroeconomic situation. Last year we had inflation of a little over 4 percent, this year (on an annual basis) we have a bit over 5 percent, and this was after the VAT increase. This is better than we expected. Now I will explain why this is happening and what we hope for. You know that we decided to implement national programmes in key development areas. The main goal is to diversify the economy, move it towards an innovation track, make it more innovative. There is a package of goals, measures and means of achieving these goals: improving the system of managing the economy and the country as a whole; digitalisation in economic management; introducing artificial intelligence in all areas of production and life in the country; improving the performance of medicine and biology, improving living standards, increasing life expectancy and birth rate, and so on – there is a whole package of measures. It is enough to just glance at the goals that we have set for ourselves to understand what we are counting on in the next few years. As for gathering the resources… To begin with, these approaches can be estimated. The development of the infrastructure certainly includes the construction of roads, railways and port facilities. Obviously, we primarily count on attracting both domestic and foreign investment. I am going to say something about capital flight now as such a question is sure to arise. But to secure the investment the state should contribute its own resources, mainly to infrastructure development, to improving business environment I am going to start telling you, this is all we are going to talk about. I have a lot to tell you. There are advances in every field. According to the World Bank Ease of Doing Business ranking, Russia stood in 120th place for business environment, and now it is in 31st place. So there is apparent progress. We have now made a decision on major changes to the rules concerning inspection and oversight organisations. We want to shut down, to eliminate completely all obsolete and archaic requirements and rules that impede progress. Generally speaking, we will move on in this field to improve business climate conditions. Regarding attracting capital and capital flight. Yes, indeed, last year we saw significant, though not the biggest in Russia’s contemporary history, capital flight of 66 billion, I think. Yet the trade surplus is 131 billion. It more than covers the flight. And that disinvested capital is coming back, we also see that. This is why we do not see any tragedy here, we take it as a natural process. Of course, business participants need only one thing – predictability and stability of the situation. This is obvious. We regularly meet with our partners, both Russian and European businesspeople, and I hope we are going to meet with our US colleagues soon. By the way, our trade fell from $30 to $20 billion as far back as under President Obama. And even though President Trump broke all records on introducing various restrictions against Russia, under this president US-Russia trade grew by five billion. And it is also growing with European countries. We meet regularly. I will repeat it again that I met with businesspeople from Great Britain, Germany, France and Italy recently. I will have many meetings here. Why am I telling you this? We try to listen to them and respond appropriately to changes in their working conditions here. We also expect our potential partners to continue to energetically work in this country. As for the package of measures and the range of objectives that we set before ourselves, please look at our national projects. Let me repeat it again that these projects are about infrastructure, artificial intelligence, biology and, of course, agriculture and so on – there are plenty of them – and this allows us to believe and state that things will move forward. It is hard to say now how much we will be able to deliver. When I said that the government would have to contribute to the implementation of these large-scale projects, primarily, to the upgrading of infrastructure, I meant we would have to see where the money could come from. That is why after the protracted (really protracted as we argued, I mean different ministries and experts, for a year, making these calculations) discussion of the funding sources and the government’s obligations, we arrived at a decision that the least damage would be caused if one – not the only one but one – of the measures would be increasing VAT. In so doing, we realised that at the initial stage this would be detrimental to the country’s economic growth, we understood this well. VAT increased, [economic] activity is scaling down and so on. But we expected the short-term effect to last for approximately six months, not longer, and then investment in the economy, including in infrastructure, would trigger economic growth. So far, our preliminary calculations have proved correct. <…>