Plenary session of the Eastern Economic Forum September 5, 2019

Plenary session of the Eastern Economic Forum

September 5, 2019

13:20

Russky Island, Primorye Territory

Vladimir Putin attended the plenary session of the Eastern Economic Forum.

Invitations to the forum have been sent to foreign heads of state and government, the heads of major Russian and foreign companies, as well as leading politicians and experts.

The theme of the forum is The Far East – Development Horizons.

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Excerpts from transcript of plenary session of the Eastern Economic Forum

President of Russia Vladimir Putin: President Battulga, Prime Minister Narendra Modi, Prime Minister Mahathir Bin Mohamad, Prime Minister Shinzo Abe,

Ladies and gentlemen, friends,

First of all, I would like to address our foreign guests, both leaders of the countries represented here and our foreign partners in the audience. Thank you for showing so much respect for Russia, and for your interest in developing relations between our countries.

I hope, I am certain that our work during this forum will be most productive and rewarding for everybody here. I am happy to welcome you all to the Eastern Economic Forum.

It is the fifth time that Vladivostok, the capital of Primorye Territory and now of the entire Far Eastern Federal District of Russia, has brought together heads of major Asia-Pacific states, the largest investors, business people, representatives of the public and expert communities.

This year we are hosting over 8,500 participants from 65 countries. Since the first forum, representation has increased more than twofold. We believe this is a convincing indication of the growing interest in the Russian Far East and the cooperation opportunities offered by this truly colossal region.

The power and competitive advantages of the Far East lie in its talented, hard-working and energetic people, educated and ambitious youth, in new centres of research, industrial growth, and industries of the future.

Its power is in rich natural resources, enormous logistics potential such as the Northern Sea Route and other trans-Eurasian routes. Last but not least, its power is in its proximity to rapidly-developing economies and the world’s most dynamic region, the Asia-Pacific.

It is hardly surprising that, while mapping out a long-term strategy for the development of the Russian Far East in the mid-2000s, some 15 years ago, we opted for the region’s maximal openness and its close integration in the economic, transport, educational and humanitarian space of the APR and, in a greater scheme of things, the world at large. We made it our priority to promote international and cross-border cooperation as well as investment and technological partnerships, which implies creating new opportunities, primarily for Russian citizens, their life and work.

In fact, this was a radical, historic turning point. Let me remind you that many Far Eastern territories, including the city of Vladivostok, where we are now, were mostly used for military purposes and had an off-limits status in the early 20^th century, in the middle of the 20^th century, and later during the Cold War.

This certainly had an impact on the development of these regions. Properly speaking, there was practically no development in the social and economic sense of the word.

To reiterate, the situation has changed radically over the past years and we are proud that the Russian Far East has become a symbol of openness for the whole country, a symbol of innovation and resolve in lifting all sorts of barriers to business and human contacts.

Of course, we are aware that this result would have hardly been possible were it not for the effort to enhance an atmosphere of trust and constructive cooperation in the APR as a whole. We are interested in promoting these positive trends to make the region we share safe and stable.

Our relations with India, China, the Republic of Korea, Malaysia, Mongolia, Japan and other APR countries are based on the principles of respect and honest dialogue. I am confident that these relations are showing great promise concordant with the growing role that the Asia Pacific Region is due to play in the coming decades. I think that our esteemed foreign guests present here, our friends, agree with this.

Along with openness, another key principle underlying our ambitious plans for the development of the Russian Far East is that they are long-term and consistent. We will be enhancing our efforts further, concentrating resources and managing this work administratively, step by step. Once we achieve our goals, we set ourselves new tasks, and strive to achieve more.

Over the past fifteen years, we have successfully created conditions for the Far East to enter the path of faster growth. And these are not empty words – I will now give you some examples of this.

Preparations for the 2012 APEC leaders’ meeting in Vladivostok was a good start. We invested significant resources then in modernising the local transport, business, and educational infrastructure, and in improving the capital of the region as a modern, dynamically developing city, a city for people, as one of the major academic centres of the Asia-Pacific region.

We are certainly aware that much still remains to be done, but a lot has been done, too. And then, based on what has already been done and achieved, we will launch large infrastructure, transport and industry projects as well as construction projects in the region and beyond.

At the same time, along with steps to improve the business climate everywhere in Russia, we have offered completely new and largely unique support tools for doing business in the Far East and being globally competitive.

I would like to inform our colleagues who plan to invest in the Far East – you are welcome to benefit from these opportunities, so please look at them again. These are not just promises – this is a practice that is already in place, and it works.

Thus, as many as 20 territories of priority social and economic development have been established around the region, with special conditions for launching production, special tax regimes and state support measures. As many as 369 resident companies have registered there, signed contracts worth nearly 2.5 trillion rubles and announced the creation of more than 60,000 new jobs. These businesses have already invested 344.8 billion rubles in their projects and created nearly 20,000 jobs. This has already been done.

The Vladivostok free port regime has been extended to 22 municipalities. Its goal is to facilitate integration of the Far Eastern regions into the Asia-Pacific economic space and promote the development of high-tech enterprises.

As many as 1,404 resident companies chose to take advantage of the benefits offered by the free port regime and signed contracts worth almost 700 billion rubles. They are going to create about 68,000 jobs in the area. As of today, 95.2 billion have been invested and over 10,000 jobs created. This is a fait accompli.

Overall, thanks to the proposed support measures, starting from 2015, investors have contributed 612 billion rubles to the region’s economy, launched 242 new plants, and created more than 39,000 jobs.

As a result, industrial production growth in the Far East over the past five years has amounted to almost 23 percent – almost three times greater than across Russia.

Far Eastern Federal University is developing as a centre of new competencies, youth exchanges and international cooperation, ambitious experiments in education, science and innovative industries in the new technological era. This centre traditionally hosts our meetings.

During the previous academic year, the university welcomed 20,000 students, including 3,500 foreigners from 74 countries. More than 200 foreign professors teach here.

It is planned to further develop the local research infrastructure, including the construction of a megascience facility. And we can confidently talk about the university’s future as one of the supporting centres of the common APR education space.

Friends,

At the preceding Eastern Economic Forums we focused on the significance of the Far East for Russia, as well as on plans to develop this region, tools for promoting business activity and how businesses can benefit from them. I briefly spoke about this just now.

However, we understand all too well, and this question has been raised at the working lunch that we just had with our colleagues, that goals of this kind will never be attained without people, their energy, their talent plus their commitment to achieving results.

For this reason, in my opening remarks today I will focus my attention on socioeconomic development and, more specifically, on the social development programme for the region.

I believe that this would be interesting not only for the domestic audience, but also for our prospective investors and the companies that already work here, since what this means is that we are committed to further improving the social and political environment and attracting the workforce the region needs in order to develop.

Yesterday I had a meeting with the heads of Russia’s Far Eastern regions to discuss the goals for a new stage in the development of the Far East. This stage will be about translating the region’s economic achievements over the past years into a social breakthrough in order to offer people a better quality of life.

What this means is that we have to promote change in healthcare, education, urban and rural infrastructure that will be felt by millions of people. Importantly, people must feel these changes as soon as possible rather than in some kind of a distant future or in many years.

In this context, let me note that the migration outflow from Russia’s Far East has halved compared to 2005. We need to reverse this trend once and for all: instead of leaving the Far East, people must head here bringing their energy, force and initiative.

We discussed this at the working lunch we just had, and our colleagues asked me this question. Is there an inflow, and how many people are leaving the region? This is a major question in terms of its moral and ethical, as well as economic implications, among other things.

Qualified professionals must find this region attractive and, of course, young people as well, as they are our future, as we all well know.

Moreover, Russia’s Far East is a very young region. It has an enormous demographic potential that has to be preserved and augmented. The aggregate birth rate here is higher than the national average.

Nearly 1.5 million out of the 8.2 million residents of the federal district are school, college and university students. They have won in sports competitions and international and national academic Olympiads and contests.

For example, Kazan has recently hosted a WorldSkills Competition, where Andrei Meshkov, a 9th-former from Ulan-Ude, won a gold medal at WorldSkills Russia Juniors in the sphere of information technology. I congratulate him on his victory once again. (Applause) In short, clever, creative and energetic people who can achieve the most ambitious goals live here, as I have said before.

Therefore, the first priority of the new stage in the development of the Russian Far East is to support young people. We must do our best to offer the broadest opportunities possible to them, so that they can receive education, realise their potential in life and their profession, create families and have children, and contribute to the progress of their home region, the Russian Far East.

First of all, we must dramatically increase the construction of modern housing, which must be as affordable as possible. In this context, as I have said, we discussed this issue with our colleagues, the heads of regions.

I agree that a special mortgage programme should be launched in the region, so that young people can borrow money to purchase flats or houses in the Far East at an annual rate of 2 percent.

We have recently approved a preferential mortgage rate for the region of 5 percent, which is lower than the country’s average. But our colleagues convinced me yesterday that this is not enough. I would like to warn the heads of the other regions that we cannot do this everywhere. This would lose all meaning because the idea is to attract educated professionals and skilled personnel to the Far East.

I suggest that we launch this programme this year for the duration of five years. I will tell you why. First, we will need to carefully consider the amount and sources of funding for the future, because this is a long-term matter.

We must apply it to the so-called primary market, that is, the market of new residential buildings, as well as to the construction of private homes by those who are taking part in the Far Eastern Hectare programme.

I suggest that we use funds from the national programme for the development of Russia’s Far East and the Far East Development Fund.

The healthcare system should be modern and affordable. First of all, this concerns primary care, which is closest to people, upgrading equipment and digitising outpatient clinics, hospitals and rural health centres, maternity hospitals and perinatal centres, and the development of ambulance aviation. This is especially important for the vast and boundless expanses of the Russian Far East.

This work is already underway around Russia, but here, in the Far East, we must create a truly effective system of medical care that would meet, and perhaps even surpass the best standards and practices.

I understand that this cannot be done overnight. But we need to start working today, to start with breakthrough pilot projects. Indeed, it is possible to create a medical cluster in the Far Eastern Federal District with a special regulation procedure, which would make it possible to open subdivisions and branches of foreign clinics without excessive formalities, attract the best foreign specialists, and use pharmaceuticals and methods that have already proved their effectiveness abroad.

This cluster should of course function within the Russian jurisdiction, and all the details should be carefully worked out by the Government agencies concerned, and, above all, with the Ministry of Healthcare, of course.

I have said more than once that for the Far East, we must propose special policies, advanced mechanisms and flexible tools that take into account the specifics of this vast territory, and the needs of the people who live here.

We have ventured into such experiments and economic innovations, and new ways to attract investment and, as I said at the beginning, have obtained a very positive result. The same approach should be used in the development of social and public services.

I ask all federal agencies, all our colleagues who are involved in the development of the region to be guided by just such logic, by the interests of the Far East, which essentially means the interests of Russia.

Creating a new cultural, educational and museum complex here in Vladivostok, Russia’s Far East, should be a major step toward consolidating the national educational and cultural space.

At the same time, the network of museums, libraries, theatres, cultural, extracurricular and vocational institutions is in need of significant upgrades across Russia’s Far East. We need to breathe new life into them by transforming them into interesting and up-to-date centres capable of attracting people of all ages, including children and teenagers.

We have just discussed this matter, and I think that this is the third time that I am mentioning our preliminary meeting: Prime Minister Shinzo Abe said that this region has a lot of appeal and great tourist potential.

Of course, the creation of a major national cultural and educational centre of this kind that would include branches of Russia’s leading museums, such as the Tretyakov Gallery, the Hermitage Museum, the Russian Museum, and the Mariinsky Theatre, will certainly make Vladivostok much more appealing for tourists.

Developing cultural offerings in rural areas and towns is especially important. Let me share some figures with you in this connection. Of the 1,834 communities in Russia’s Far East, 1,614 have a population of less than 5,000 people each, while towns and villages can be hundreds of kilometres apart. We need to make sure that this is taken into consideration. This was also on the agenda of yesterday’s meeting with governors.

Among other things, we need to adapt the Rural Doctor and the Rural Teacher national programmes to Russia’s Far East. This could include offering doctors, paramedics and teachers willing to relocate to small communities in the Far East greater benefits. I propose doubling these allocations for the Far East compared to the existing national rates.

It goes without saying that we need to be forward-looking. The future is in the hands of today’s youngsters and school students who love their region and want to live and work here. We need to offer them an opportunity to get quality education regardless of the income or financial situation of their families.

I believe that we need to offer more targeted and state grants at Far Eastern universities in areas where professionals are in very short supply, so that the young people have their tuition fees covered by the government, or by their potential employers. This way, students will know for sure that they will get a job, which solves employment-related problems.

Of course, young people and people of all ages must have the ability to benefit from online education, as well as telemedicine, information resources and e-services, and access to digital platforms and services that open up new horizons in terms of starting and running businesses.

I would like to remind you that more than half of all internet users on the planet live in the Asia-Pacific region. Russia’s Far East has to keep up with the global digital infrastructure and standards in this sphere, including high-speed internet penetration rates.

I ask the Government to take this into consideration when working on the Digital Economy of Russia national programme. Let me reiterate that we need to create an appropriate digital environment in terms of the challenges we currently face and the fast technological change around the world.

In this context, our second most important objective for Russia’s Far East is to make it one of the world’s top centres for high-technology, competences and new industries, a centre of the most advanced and quality jobs for high-skill professionals.

This must primarily benefit people living in the Far East, meaning the Russian nationals who live here, in this region. This is our position of principle.

The potential is there. It is here, on Russky Island, that a new innovation cluster is being created. A space industry cluster is emerging around the Vostochny Space Launch Centre. Aircraft manufacturing, natural gas processing and chemistry are all actively developing in the region. The construction of the Zvezda shipyard is underway.

Of course, we plan to focus on increasing the volume of value-added products. It is a position of principle to which I would like to draw the attention of Russian and international investors, residents of priority development areas and the Free Port of Vladivostok.

For example, we will raise export duties on round timber, but at the same time, we are ready to provide assistance to those who are willing to invest in timber processing, and create the most favourable conditions for the export of finished products, including to third countries.

The same logic – preferences and support for those who produce value-added products – will be also applied in other spheres, including marine resources and raw materials.

The conservation and rational use of our timber potential is an important topic. We plan to discuss it at the nation-wide level at a meeting of the State Council.

We understand that the creation of a powerful research and industrial centre in the region is a challenging project. At the same time, we see that it is also a very large window of opportunity. In this context, we must set high requirements regarding the effectiveness of the measures and decisions we propose.

This concerns primarily the economy of the future and assistance to the young teams that are implementing breakthrough ideas and solutions. Start-ups led by young people are the most powerful driving force of technological progress around the world.

We need more than just a legal framework to ensure not only the proliferation of start-ups but also their development into medium-sized and then into large companies. Of course, we need regulations, but we must also create effective financial instruments.

In this connection, I suggest that a special venture fund be established in the Far East. We discussed this idea yesterday; I support it. I ask the Government to formulate practical proposals regarding this, especially since the sources of funding are available.

Finally, our third strategic objective is also quite bold. It is in step with the global environmental agenda, the challenges facing not only Russia, but also the entire planet.

I am referring to developing Russia’s Far East as a global nature and tourism centre, an international testing ground for working out ways to tackle a question that matters to all of us: how to ensure harmony between economic activity and green tourism, between making nature accessible to the public and preserving unique ecosystems.

The marvellous natural beauty of Russia’s Far East already attracts hundreds of thousands of tourists. In 2016, 5.2 million people visited the region, including 750,000 foreigners. Last year total visits rose to 7 million, including about one million foreigners.

The natural beauties of Russia’s Far East include Lake Baikal, the Kronotsky Reserve in Kamchatka, Alkhanai National Park in the Trans-Baikal Territory, and other places. There are quite a few of them in this region.

There are a total of 64 natural territories that benefit from federal protection status. Let me note that I have already issued an instruction to trace and register the boundaries of all reserves, national parks and other protected areas. I ask that these efforts be accelerated, first and foremost in the Far East.

At the same time, we need to be more active in launching public-private partnerships in tourism. We need to invite responsible investors and offer them special incentives, subject to strict observation of the standards and rules of sustainable tourism.

Of course, we need advanced information services offering people convenient access to any information they may need: when and where to travel, what tourist route to pick. Foreigners should be able to apply for visas using this service.

Incidentally, it is here in Vladivostok that e-visas were first introduced, substantially streamlining the formalities that foreign tourists and businesspeople have to go through. More than 140,000 visas of this kind have been issued over the past two years.

All the development goals we are discussing as well as, most importantly, new modern standards of living call for a fundamentally new level of mobility. For the Far East, this implies above all a developed network of air transportation and affordable tickets within the region as well as to Siberia, central Russia and abroad.

By 2024, we will have modernised 40 airports in the Far East. We will employ the capacities of the Far Eastern aircraft manufacturing plants in Ulan-Ude, Komsomolsk-on-Amur and Arsenyev to expand the network of domestic flights and renew the pool of regional and local aircraft and helicopters.

I would like to add that safety and comfort are the most important things when it comes to air carriers around the world. One more priority for airlines operating in the Far East must be affordable tickets.

I believe it would be logical if the airlines that are willing to increase their operations in the Far East and to pursue a responsible and reasonable pricing policy were offered a preferential right to make flights in other, more profitable regions.

We discussed this with the Transport Minister yesterday. I do hope that he is listening to me today. In general, this system is already being applied, but we need to reinforce it. I understand that this is not a commercially effective method, but it is justified in this region. However, we must discuss ways of formalising it.

Friends,

We have very ambitious development goals in the Far East, and the attainment of these goals involves partnership and the pooling of efforts.

We are ready for such cooperation, and we are open to everyone who is interested in it. We believe in the future of our cooperation and the future of the Russian Far East.

To succeed in this region, just as across our huge country as a whole, we need a consolidated society, the contribution and the involvement of everyone who is willing to contribute their skills, their energy and their knowledge to the common goal. This is our mindset, and this means that all our plans and the most daring of our dreams will definitely become reality.

I would like to wish all forum guests and participants every success and all the very best.

Thank you.

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Plenary session moderator Sergei Brilyov: Mr President, I would like to specify one thing. In one sentence of your speech, you mentioned such gems of development as the Vostochny Space Launch Centre, the plant in Komsomolsk-on-Amur (although it is formally old, it now manufactures the most sophisticated aircraft), the Zvezda shipyard and priority development areas (PDAs). Do you expect foreign investment in such facilities as Zvezda, the space centre and the aircraft plant as well?

Vladimir Putin: Of course.

There has already been such investment in the aircraft plant. We know our Sukhoi Su-30, Su-34++, Su-35 fighters and now Su-57 fifth-generation fighters, and the entire world also knows them. We jointly manufacture Sukhoi Superjet airliners with Italian and French partners. We are working there, and we are open to such cooperation. Although we have nothing to hide, there is still one thing.

Sergei Brilyov: This is exactly what I mean.

Vladimir Putin: We securely conceal what we are still supposed to keep under wraps. At the same time, there is every opportunity for modern and cost-effective co-production arrangements.

The space launch centre is not a military space launch centre. We are now deciding who should build its next stages. To be honest, this space launch centre should primarily handle civilian launches. Therefore we don’t merely believe that we can work there together with foreign partners, but we are interested in this, and we will certainly involve them in this cooperation.

Russia and India implement joint space exploration projects, we work actively on these programmes with the People’s Republic of China; in principle, we maintain good cooperation with the European Space Agency, and we hope that this process will continue to develop, and we also cooperate with the United States. The many spacecraft that we launch in the interests of our foreign partners, including the United States. There are plans to launch many of them from the Vostochny Space Launch Centre. Therefore I don’t see any single direction that might be off limits to our foreign partners. On the contrary, we are interested in attracting them; this also concerns the Zvezda facility that you mentioned.

Prime Minister Modi and I visited Zvezda only yesterday. The facility will build modern large-capacity ships for operations on the continental shelf, in the Arctic zone and for carrying liquefied natural gas, petroleum products and other consignments. The Prime Minister and I had a discussion yesterday, and we will search for opportunities for joint work. Quite possibly, individual vessels will be partially built in Russia. Such international co-production arrangements are flourishing all over the world. Russia will build parts of vessels, and Indian shipyards will complete them.

Our famous leading company Rosneft that owns a major refinery in India has recently bought a controlling stake in it. And its area of responsibility includes a major Indian port. Therefore we have many interdependent areas of cooperation. There are no closed subjects; on the contrary, we are interested in attracting our partners.

<…>

Vladimir Putin (replying to a question about the Kuril Islands): When I was in Japan several years ago, I spoke in public about the history of these territories. There was a time when Russia had legal grounds to consider the islands its property, and it turned them over to Japan voluntarily, by decision of the Russian emperor, as a token of friendship. Next followed the tragic events of 1905, the Russo-Japanese war and the situation in Sakhalin. And then WWII. It is a complicated story with numerous parts.

But there is also the humanitarian factor. I cannot but agree with Shinzo [Abe] that until these problems are settled we must do everything possible so that those who have connections with these territories in any way do not feel like the victims of the past geopolitical events. Based on these humanitarian considerations, we have not just made concessions for these people, responding to the wishes of the Prime Minister of Japan, but we have done so in an exclusive manner. Few people know about or understand the essence of this exclusiveness. It means that we not only give Japanese citizens an opportunity to visit the islands, but we have also lifted visa requirements for such visits. This solution has a political component, because the Japanese authorities refuse to issue visas to visit these islands. We are aware of this sensitive problem and have decided to make this concession.

Of course, it looks strange to us that Japan denies visas not to certain individuals but to everyone who lives in Crimea. Where is Japan and where is Crimea?

We accept with understanding the phrase that one should believe in Japan, and we do believe in it. This is truly a very kind and positive request. But we have masses of questions regarding the peace treaty, and, unfortunately, they concern more than just our bilateral relations. There are also military, defence and security matters when we have to respect the positions of other countries as well as Japan’s obligations to other countries, including the United States. That country has not only kind words but also a saying that dates back to the 1920s or 1930s: You can get much further with a kind word and a gun than you can with a kind word alone. We understand this, we know about this, and we must take this into account.

It is just that when replying to your question I want to say that this looks like a simple problem, but it is a problem we inherited from the past. However, we – Shinzo and me – really want to settle it. No matter how difficult it may be, we will proceed from the 1956 Declaration, as Mr Prime Minister has said, toward a comprehensive settlement of all our problems, and we will be working towards a peace treaty.

<…>

Sergei Brilyov: I cannot help pointing out that Ukrainian investors are here with us today. Mr Medvedchuk is an investor. Mr President, when will the exchange [between Russia and Ukraine] happen?

Vladimir Putin: I think Mr Medvedchuk will torment me with it now. I know he is particularly concerned about several people that are in prison in the Russian Federation. We in fact had to make very difficult decisions regarding specific people, these specific people. But, on humanitarian grounds, we have made it to the final stage in the ongoing negotiations, including with the official authorities. So I think the results will be announced in the near future.

Sergei Brilyov: The prospects of exchanges and further negotiations with Ukraine are a kind of compass, if I may say so, in relations with those countries, say, the G7 countries. Mr President, what will happen next, after the exchange? What will happen next on the Ukrainian track, between Russia and Ukraine?

Vladimir Putin:I think that from a historical perspective – I believe this will happen inevitably – bilateral relations will return to normal, because we are two parts of the same Slavic people. I have spoken about this many times. As for the near future, this will largely depend on the current Ukrainian leadership.

Sergei Brilyov: Can we expect anything by the end of this week, or would it be better not to mention any dates?

Vladimir Putin: I have already said that we are finalising our negotiations on exchanges. I think that we are talking about a large and high-profile exchange. And it could be a good step forward towards normalisation.

<…>

Sergei Brilyov: If they invite you, will you go, Mr President?

Vladimir Putin: Where to?

Sergei Brilyov: To the G8. The next meeting is in the [United] States, as far as I know. Mr Trump will be in the midst of a re-election campaign though.

Vladimir Putin: At one point, the G8 meeting was to have been held in Russia.

Sergei Brilyov: In Sochi, yes.

Vladimir Putin: We are open. If our partners want to visit, we will be happy to see them. (Applause.) It was not us who postponed it; it was our partners. If they want to restore the G8, let them do it. But I think everyone understands today, and President Macron recently said publicly that the Western hegemony is ending. I cannot imagine any effective international organisation without India or China. (Applause.)

Any format can be of benefit, because it always involves a positive exchange of opinion, even when conversations are tense; as I understand it, this is what happened at the G7 this time, but it was still useful. So we do not reject any format of cooperation.

Sergei Brilyov: Mr President, there were contacts with Mr Trump recently, and now we again hear this idea about the G8. Where shall we start? There is a backlog of all sorts of things that has built up in our relations over the past years.

I looked through the statistics. Last year, 40 Russian citizens, just private individuals, were arrested at the request of the United States in third countries. During the last year alone! January 2019: citizen Makarenko. I do not know what the charges are against him. But the very fact… I have just seen: Korshunov [detained] in Naples, he could be from the United Engine Corporation.

Is it easy to ignore this? In general, how can we resume dialogue against this background?

Vladimir Putin: These is a very bad practice that complicates our interstate relations. I am not joking or being ironic. Often, we do not see any grounds for unfriendly actions of this sort. Moreover, I have every reason to think that occasionally this is linked to rivalry. There are probably some criminal aspects, but it is our law enforcement agencies that should cooperate on this. We should sign relevant interstate instruments and agreements on how to act in such cases. Incidentally, some of these instruments are already in existence.

Sergei Brilyov: I think we have a 1999 agreement on legal assistance, don’t we?

Vladimir Putin: There are some instruments, but, in fact, they do not work. They could be reactivated.

But, in part, this is linked to rivalry, for example, in the aircraft building sphere. I have already said that we were about to launch a very good aircraft, a very good, competitive medium-haul airliner, the MS-21. It is clearly a rival to the Boeing 737. But they upped and entered its wing items on the sanctions list. This is totally unrelated to defence. Totally!

We will manufacture these in Russia. It is just that cooperation would be more to the point and we were ready to buy the relevant American materials, just as they buy a lot of our titanium and use our titanium to manufacture their Boeings. We will do this anyway. It will take time: we thought it would be about two years, but probably a shorter timeframe will be required – eighteen months. This aircraft is already flying. And we will develop these materials. And in some respects this is perhaps a good thing because we will have materials of our own and will depend on no one in this regard.

Now let us talk about the concrete person you have mentioned, who manufactures engines and has a job with the Engine Corporation. How should we react to the charges and hints to the effect that he was stealing certain secrets? We have heard the same accusations brought against the People’s Republic of China. We do not know what is going on there. I think that it is also fiction – mainly – but in this particular case we know it for sure.

This United Engine Corporation has developed a new Russian engine. The process took a long time; this is our first hi-tech product in the last 28 years. It was developed by our Engine Corporation and specific plants with very good competences, qualified personnel, and world-class scientific potential. Of course, we have signed a consultancy contract with an Italian firm. This is an absolutely natural international practice. This is an open commercial engagement with European partners.

Today, our American friends are claiming that certain Americans allegedly joined this firm and stole something. If they did so, we do not need anything from what they have stolen, because we have done all that with our own hands and our heads, the heads of our specialists. Consultations and joint work on modern hi-tech products are an absolutely natural, open and public activity.

This is why I think that in this case we are definitely up against attempts at unfair competition. This is not improving our relations. (Applause.)

Sergei Brilyov: On August 27, many international news agencies, including France Presse, reported the upcoming deliveries of US air defence systems to Japan.

This can change the missile scene in Asia, given the demise of the INF Treaty and the specifications of the launchers deployed in Romania and Poland, about which even ordinary people know. I would like to remind those who may have forgotten this that, although the Gorbachev-Reagan treaty only concerned Europe, the Soviet Union also destroyed such weapons in Asia.

Mr President, I have two questions for you. If anyone would like to offer their comments, we would be grateful. The first question concerns your vision of a possible missile control or reduction mechanism for Asia, and whether we will need it, especially in light of the deployment of US missiles. Second, how will this influence our talks with Japan?

Vladimir Putin: Our position regarding the US withdrawal from the INF Treaty is well known. There is no need to repeat it again. We do not appreciate that decision; moreover, we believe that it is a counterproductive step that is undermining the international system of arms control and security.

We have stated publicly after the Americans tested their missile (we will produce such missiles as well) that we will not deploy our missiles in the regions that do not have such US ground-launched missiles.

We are not happy with the Pentagon chief’s statement regarding US plans to deploy these missiles in Japan and South Korea. We are worried and alarmed. Actually, this is why I discussed this subject with the Prime Minister many times before the Americans manufactured such missiles. If they are deployed in Japan or South Korean, we know that this will be done under the pretext of neutralising the threats coming from North Korea. However, this will also create considerable problems for us, because these missiles will be most likely able to cover a large part of Russia’s territory, in particular in the Russian Far East.

I would like to remind you that we have two large naval bases of surface ships here in Vladivostok, as well as a base of strategic nuclear submarines on Kamchatka. This is a very serious business. And we certainly cannot turn a blind eye to it. This will also be a part of our talks with Japan and South Korea. We do not know yet how our Japanese and South Korean partners will react. We did not discuss this matter with Mr Prime Minister today.

By the way, we pointed out more than once that the MK 41 launchers can be used not only to launch air defence anti-missiles but also to fire strike missiles. The Americans kept saying that this is not so. And then they have launched the new missile from the MK 41 VLS. In other words, these launchers are part of strike missile systems, and we were right, just like in many other cases too. This means that they were trying to deceive us. We have no illusions regarding this, but we will have to respond appropriately to this.

<…>

Sergei Brilyov: Mr President, some young people have been taking to the streets in the past few Saturdays, for example. Are they your young people?

Vladimir Putin: I believe that all of us, and especially young people, should spend their energy on constructive processes.

When people express their views, also during protests, and I have already noted this, I believe that they have the right to do so. And this sometimes yields positive results because people shake up the authorities and lead them in the right direction, so that they address people’s problems more effectively. But they should act positively, and they should be guided by the interests of the country and the people, rather than their own narrow mercenary and group interests, and act in line with the established regulations and laws. I have always adhered to this viewpoint, and I continue to voice it, and situations and developments in the world and in neighbouring countries show that this approach is correct.

As for “for you” or “against you,” I am convinced that these are people, and, of course, there are many different kinds of people among them, but mostly positive-minded people who want the country to develop and to contribute to its development. The only thing is that they need to find their place in life. And the authorities have to do everything possible for them to find their place in life and to be able to apply their knowledge and talents for the country’s constructive development.

Young people are always impulsive and active, and this is good. I repeat: all this should comply with current legislation. But I am confident that many of those people who are engaged in political activities will be in high demand in the future, in terms of their careers and politics, too.

Sergei Brilyov: Mr President, I remember the experience of my generation. I am 47 years old, and I was a high-school student in the late 1980s. In the early 1990s, my friends and I started attending rallies. I recall vividly a major rally against Article 6 of the Soviet Constitution in Moscow. All of us who were students at the time also took part. That article implied that the Communist Party of the Soviet Union was the nucleus of the country’s political system.

We had precisely these considerations in mind while taking part in the rally. When we reached Zubovsky Boulevard, where the rally took place, we saw hundreds of thousands of people or almost a million people there. All of a sudden, someone yelled from the rostrum: “The Politburo must resign! Those in favour, raise your hands.” It seemed impolite not to raise one’s hand, and everyone started doing it, although the rally had a different purpose initially.

In some cases, it is very easy to mislead young people. Perhaps it would be better to treat them more gently in some situations?

Vladimir Putin: We should treat everyone in one and the same manner, in line with the law.

Sergei Brilyov: As for security matters, we have still a few things to discuss, and the same applies to political matters. Taking a look into the audience just a few moments ago I noticed Mr Medvedchuk once again, which reminded me of President Zelensky’s statement that the For Life party benefits from foreign funding. Mr President, are you aware of this statement? What do you think about it?

Vladimir Putin:  No, I have not seen this statement. But if it was actually made, it means that the current authorities in Kiev are risking to run into the same trap as the preceding Ukrainian leadership, as was the case for the previous president, I mean former president, Mr Poroshenko. So if the current authorities go after the opposition, no good will come out of it. As far as I understand, this is the parliamentary opposition that has the trust of a considerable number of voters who expressed their support during a democratic election. For this reason, it would be strange to see any tightening of screws. They are not invading squares or demanding the impossible. They work within the framework of the Ukrainian Constitution and applicable laws. In my opinion any attempts to prevent them from enjoying their constitutional rights would be a grave mistake.

<…>

Sergei Brilyov: Mr President, what about the presence of Russia’s military and navy in this region [the Strait of Hormuz]? It was quite substantial back in the Soviet days.

Vladimir Putin: We could easily do this, considering the progress in the development of Russia’s Armed Forces and Navy. The question is whether initiatives of this kind are effective, facilitate settlement and improve the security in the region, including in the Strait of Hormuz.

A few years ago Russia came forward with an initiative to establish an international mechanism with involvement of almost all the interested countries of the region, as well as those who are interested in the normal operation of these routes, which would include Russia, Asian countries and the United States. In the future, we could even establish a specialised international organisation for dealing with matters of this kind. We are currently discussing this proposal with our colleagues, including with our Chinese partners, as well as others. Let us wait and see where it takes us. Russia is undoubtedly interested in promoting detente and preventing any further escalation so that all the parties involved contribute to calming down this situation and resolving the problems, including those related to the Iranian nuclear programme, in keeping with the existing international instruments approved by the corresponding resolutions of the United Nations.

Sergei Brilyov: Here is my last question about security. Interestingly, a notable change has taken place where NATO has now three nuclear powers – the United States, Great Britain and France – whereas the Shanghai Cooperation Organisation has already four, Russia, China, India and Pakistan. Of course, much depends on Russia-US agreements, including in the sphere of strategic stability. What do you think, Mr President? In your 2017 Address to the Federal Assembly, new types of high-tech weapons, in particular, supersonic, were presented.

Vladimir Putin: Hypersonic.

Sergei Brilyov: Can they be part of a bigger deal with the Americans?

Vladimir Putin:  Yes, we operate on the premise that the existing tools, in fact, only one of them – START-3 which was concluded between Russia and the United States – is still in force… The United States has put forward a new idea where it wants to involve China in this joint work, but the Chinese responded quite reasonably that the Chinese nuclear potential is much lower than that of Russia or the United States, and they are not sure what exactly they should reduce if they already have fewer carriers and warheads. Their reasoning makes sense.

But let's not forget that the United States has not even joined the nuclear test ban treaty.

Sergei Brilyov: It has not ratified it.

Vladimir Putin: Not ratified means hasn’t joined.

There is talk about deploying weapons in space. These are very serious challenges that humanity may face. Imagine, there will be some kind of a weapon, maybe nuclear, hovering at all times on a geostationary orbit over the head of each of us, meaning each of them as well. The flight time will be very short, and the defence equipment will be very complex. Indeed, this can drastically change the security situation around the world.

So far, our American partners have remained silent with regard to our proposals to maintain contacts in the sphere of disarmament and containing the arms race. In fact, there is nothing new here. Most recently, we met with our US partners in Osaka, and also raised the question about how we can include our latest weapons, including hypersonic strike missile systems, in a general agreement. I mean no other country, including the United States, has such weapons.

I told Donald: “If you want, we can sell it to you and thus balance out everything in one go.” Truth be told, they are saying they will soon start making it themselves. Perhaps, they will. But why spend money when we have already spent it and can get something from them without jeopardising our security, but with an eye towards creating a situation of balance?

We can discuss how and what we can count keeping in mind the number of carriers and warheads. This is a special question. In any case, Russia is ready for this dialogue and this discussion. But so far we have not received a clear answer from the Americans.

<…>

Sergei Brilyov: Mr President, just look how we see eye to eye here when it comes to environmental protection. Maybe, this is the most promising subject in Northeastern Asia or Asia in general.

Vladimir Putin: Ecology is very closely linked with energy. This is what we are all talking about here. Russia is not the least affected by global warming. I have already spoken about this at the G20 summit. In my opinion according to our data and what international experts are saying, global warming here is taking place 2.5 times faster than in the world as a whole. This poses certain problems for us, primarily in the north where buildings are built on permafrost. Regarding this, what should we do and how should we do it? This is the question.

We support all international efforts in this field. We backed the Paris agreements and assumed fairly serious commitments – to reduce emissions by 70–75 percent from the base year, 1990. Incidentally, the EU countries have taken more modest obligations since that year. They promise to reduce emissions by 60 percent.

Electric cars have now been discussed. For the first time in recent history international organisations saw an acute decline in their sales. There are certain reasons for this. But in this country environmental problems are not linked with global warming alone. They are also due to the use of gas fuel, a large number of cars in big cities require this and the use of different types of fuel, including coal, in the utilities sector. All these matters are reflected in the programme that we have drafted to improve the environmental situation in the country. This is one of the problems.

At the same time I would like to note that on a global scale the structure of the Russian energy industry is one of the “greenest” in the world. The hydropower and nuclear energy account for over one third of our power industry; gas amounts to more than 50 percent of it and gas is known to be the most environmentally friendly fuel of all hydrocarbons. And we are still a country that is rich in hydrocarbons. This is our competitive advantage and we should use it to the utmost.

But, of course, we should not sidetrack from the main trend, we should not ignore what is going to happen tomorrow. On the contrary, we must be up to date and deal with modern alternative energy sources, including the hydrogen economy. We are doing this.

Over a period of the past few years we put 800 megawatts of renewable energy sources into service. We are working on this. By 2024 we plan on making 4.2–4.7 gigawatts of alternative energy sources available. We have just signed an agreement with Fortum, our Finnish partners, concerning an excellent wind farm. We are also dealing with solar power. By and large we believe that this trend is absolutely correct and we will do everything we can to implement our plans regarding environmental protection.