Vladimir Putin attended
the plenary session of 5th International Arctic
Forum The Arctic: Territory of Dialogue.
April 9, 2019
16:50
St Petersburg
The theme
of the sessionis The Arctic: An Ocean
of Opportunity. President of the Republic of Finland Sauli
Niinistö, President of the Republic of Iceland Guðni Thorlacius
Jóhannesson, Prime Minister of the Kingdom of Norway Erna
Solberg and Prime Minister of the Kingdom of Sweden Stefan
Löfven are taking part in the discussion.
The discussion is focused
on the comprehensive development of Arctic territories,
including the rational use of natural resources, environmental
security, transport, protection of northern indigenous peoples’ interests and other
aspects of sustainable growth in the Arctic region.
* * *
Speech and answers
to questions at the plenary session of 5th International
Arctic Forum
President of Russia Vladimir
Putin: Mr Niinistö, Mr Jóhannesson, Ms Solberg, Mr Löfven, ladies
and gentlemen, friends,
I am happy to welcome you
to St Petersburg, the northern capital of Russia whose history
is closely connected with legendary Arctic expeditions, industrial exploration
of this unique region and preservation of its nature and unique
culture.
This is the fifth time that
International Arctic Forum The Arctic: Territory of Dialoguebecomes
a platform for an open discussion of the Arctic
agenda. We thank our foreign guests and representatives
of the Arctic Council countries for their readiness to team
up and their understanding of our shared responsibility
for the future of the Arctic and its stable
and sustainable development.
In 2021, Russia will assume
presidency of the Arctic Council. We invite all participants
of the Council and other states to cooperate
in the Arctic. The priorities of our presidency are vital
for the Arctic development: promotion of sustainable
technologies in all areas, including industry, transport and energy.
Today we are carrying out our
projects in the Arctic, including global ones, based on the latest
environmental standards. It is enough to mention the Yamal LNG
project and the development of the Bovanenkovskoye
and Kharasaveyskoye gas fields. Today, the Arctic accounts
for over 10 percent of all investment in the Russian
Federation. I am convinced that the importance
of the Arctic factor in the Russian economy will only grow
further.
This year we are going to draft
and adopt a new strategy for the development
of the Russian Arctic up to 2035. It is to combine measures
stipulated in our national projects and state programmes,
the investment plans of infrastructure companies and programmes
for developing Arctic regions and cities.
All Arctic regions should be brought
to the level of at least the national average
in key socioeconomic indicators and living standards. I would
like to emphasise that this task should not only be clearly defined
in the new strategy of Arctic development but should also serve
as a guide for the work of all federal departments
and regional authorities of Russia. It is absolutely necessary
to take into account the specific nature of the problems
facing the indigenous minorities of the North.
Special attention should be paid
to the development of transport and other support
infrastructure. We are well aware that this is a necessary foundation
for future investment and business initiatives. The construction
of theNorthern Latitudinal Railway is a key infrastructure project.
This railway will make it possible to start effective development
of the natural riches of the Polar Urals and Yamal,
and in the long-term, the north of Krasnoyarsk
Territory of the Russian Federation. And we will certainly
continue developing the global transport corridor that includes
the Northern Sea Route and which will be functioning without fail year
round.
Our goal to significantly boost
the freight traffic and bring it up to 80 million tonnes
by 2025 on the Northern Sea Route alone was outlined
in the 2018 Address to the Federal Assembly. Just 10 to 15
years ago, this figure looked absolutely out of reach, whereas today it is
a realistic, carefully calculated and concrete goal.
As of last year, the volume of traffic
on the Northern Sea Route already reached 20 million tonnes. This is
three times – I reiterate – three times more than
the Soviet record set in 1987, when the Soviet Union transported
6.5 million tonnes using this route. Now, it is 20 million tonnes.
In order for this global
transport corridor to operate at full capacity, we will develop
the communication and coastal infrastructure, including port
facilities, navigation, and meteorological aids, and ensure safe
commercial navigation.
We encourage our foreign partners
to join us in our efforts to create hub ports
at the end points of the route. I mean
the Murmansk transport hub and port infrastructure
in Petropavlovsk-Kamchatsky. In addition, we plan to upgrade
the Arctic coast harbours, including the river-sea traffic
capabilities.
We will continue to update our
icebreaker fleet and to increase the production
of ice-class vessels. Three new nuclear-powered icebreakers, namely,
the Arktika, the Sibir and the Ural, are being built here
in St Petersburg, where we are now. By 2035, Russia's Arctic fleet
will operate at least 13 heavy-duty linear icebreakers, including nine
nuclear icebreakers.
To reiterate, our goal is
to make the Northern Sea Route safe and lucrative
for shippers, and appealing both in terms
of the quality of services and price. In particular,
the icebreaker escort fee must be competitive and reasonable.
The state invests in this operation in order to minimise
the tariff burden on carriers and other businesses.
Friends, we intend to use all
of our investment support tools, including those that we have used
successfully under programmes for the development of Russia’s
Far Eastern regions, to launch new projects. These will include lower
profit tax rates, reduced severance tax coefficients for mineral
extraction, a notifying procedure for VAT refunds
and a simplified procedure for providing land plots
and invariable terms for implementing investment projects.
At the same time, with due
consideration for the Arctic’s peculiarities, investors should
and will receive more advanced and more stable preferences here.
I would now like to address
our colleagues. The Government of Russia, as well
as experts and the business community, have been instructed
to draft a federal law on a special system of preferences
for the Arctic zone’s investors. And I am asking you
to do this quickly so Russia’s State Duma can pass the law during its
fall session.
I would like to draw your
attention to one more point. As you may know, the powers
of the Ministry for the Development of Russia’s Far
East have been expanded; now, the Arctic is also within its authority
and is part of its responsibility. In this connection, it is
logical to expand the work of Far Eastern development
institutions to the Arctic as well. If necessary, we will expand
the capitalisation of the Far East Development Fund
for selective financing of Arctic projects.
Furthermore, we need a powerful
research, HR and technological foundation for the region’s
comprehensive development and for accomplishing unique
and unconventional tasks in the high latitudes. We have begun
establishing science and education centres in various Russian
regions; they integrate the capabilities of universities, research
institutes, the business community and the real economy. One
of our Arctic regions will certainly receive such a centre that will
ensure the development of fundamental research and will help
address the applied and practical tasks of developing
the Arctic.
We believe that the future
belongs to active academic and university exchanges, international
research teams and alliances of high-tech companies. We invite all
our colleagues to take part in joint projects in shipbuilding,
navigation safety, environmental protection, minerals production
and bioresources harvesting.
The Arctic offers us immense challenges.
And we can only respond effectively if we do it together. One such
challenge, as I have told you, is to maintain balance between
economic development and preservation of the Arctic environment,
conservation of its unique and fragile ecosystems, and,
of course, clean-up of the environmental damage accumulated
through the economic activity in the past decades, which was
extensive from time to time. We have been conducting a major clean-up
of Arctic areas for a number of years. Starting
in 2012, we have removed and utilised over 80,000 metric tonnes
of waste.
In the coming years we will
liquidate six major environmental damage sites in Arkhangelsk
and Murmansk regions, in the Nenets Autonomous Area, Karelia
and Yakutia as part of the Clean Country federal project.
We are also to clean up over 200 square kilometres in the Kola
Bay area.
We will also develop a system
of specially protected natural territories and reserves. Above all,
I mean the Russian Arctic national park. It is important to take
additional measures to develop civilised ecotourism and build
the required infrastructure there.
To conclude, I would like
to thank all the participants and guests of our forum.
I am certain that our constructive dialogue will help strengthen
neighbourly relations and trust in the Arctic region, which
means the peaceful and sustainable development
of the Arctic.
Thank you.
<…>
John Fraher: So now I am
delighted to open up the panel discussion, where we will touch
on many of the issues that we’ve talked about in the opening
speeches.
I would like to start with
energy in the Arctic. And President Putin, you talked a lot
about Russia expanding its energy infrastructure in the Arctic.
Indeed, exploiting the Arctic reserves has been one of your grandest
ambitions as president. And yet when you look at the global
energy market and trends in the global energy market, we see
that the world is moving towards renewable energy. The world is awash
with US shale, and, as Rosneft has discovered, sanctions are making it
much harder for Russia to do big offshore projects. I think it
has been five years now since Rosneft struck oil in the Arctic.
So my question to you is,
is there a risk that Russia has missed its chance here? That somehow this
Arctic dream that you’ve had will end in disappointment?
Vladimir Putin: I would
like to ask the moderator to give me two minutes for some
comments on the speeches of my colleagues. Do you mind?
Thank you very much.
First of all, we have
discrepancies with Sauli [Niinistö] on data relating to warming
in the Arctic. According to our data, the Arctic is warming
four times faster than the rest of the world, and Russia is
warming 2.5 times faster than the rest of the world. These may be
different calculations, but both of these are really disturbing trends.
As for soot, I know
this is a serious question, Sauli and I also discussed it. We
also have different calculations concerning these emissions in different
countries, including in Russia, the differences are dozens
of times. But I gave him an example, told him that
in the ancient sediments of ice, we can observe large inclusions
of soot. It was in the Middle Ages, perhaps even earlier, when
there were no industrial emissions. The fact is that a volcano may
produce more emissions than humanity, whose emissions are associated with road
transport. Nevertheless, this question is very important, and our experts
are also working on it.
But what is extremely important,
in my opinion, and here I fully agree with Sauli, is that
if ships switch to more environmentally friendly types of fuel,
and I mean primarily gas fuel, especially ships that navigate
in the northern seas, in the Arctic zone, this is
of course extremely important. It is absolutely obvious. And it would
be necessary to encourage shipbuilding companies and carriers
to use such types of transport and such fuel.
Now let us move on to your
question: “Does Russia, as the region’s largest economy, do enough
to ensure environmental security in the Arctic?” Sorry, but
I must also correct you. Russia is not the largest economy
in the Arctic region. According to the IMF, China ranks
first in terms of purchasing power parity and economy. It
significantly overtook the United States, 25 trillion already, if I am
not mistaken.
John Fraher: But Mr President, is
China an Arctic country? By your definition.
Vladimir Putin: I was
patient, while you were saying all this, you too please bear with me.
The United States
of America ranks second. And the United States of America,
on a par with Canada, is a country in the Arctic zone.
But unlike the United States, we signed and executed the Tokyo
Agreement, and signed the Paris Agreement and are going
to implement it. Moreover, Russia undertook to reduce emissions
by 25–30 percent from the level of 1990. This is a large
load. And as the President of Finland said, we are now
planning the ratification; of course, we will do this after
a comprehensive analysis of the consequences
of the implementation of these decisions, but nevertheless we
are moving in this direction.
Although I have already
mentioned this, the causes of the warming are still unknown. We
are not sure whether it is related to emissions or some other more
global causes. This is the question. However, we cannot go wrong by reducing
anthropogenic emissions, and Russia has undertaken such commitments.
However, Russia is not the world’s largest economy. We rank sixth
in terms of the volume of our economy and purchasing
power parity. We come sixth after China, the United States, India, Japan
and Germany. We will do our best to move up, of course.
Now, regarding “from here we will
face a Swede, here the city will be laid, in spite
of the arrogant neighbour” (A quote from Alexander
Pushkin’s poem The Bronze Horseman, which the Prime Minister
of Sweden Stefan Lofven quoted during his forum speech), I would
like to mention another poem, Poltava. It has the following lines
about the Battle of Poltava “Hurrah! The Swedes are broken…“
These lines come to mind when we watch the game between
the Russian national football team and Tre Kronor. Unfortunately
for our fans, we are unable to cite these lines too often now,
because the brilliant Swedish hockey team is playing so well
and thrills not only its own fans but ours as well
and by the way everyone is united: sports unites our countries
in a cultural sense. It would be nice, Mr Prime Minister, if
a club of yours participated in the Continental Hockey
League games. However, this is beside the point of our meeting today.
Now, regarding your question about
whether Russia will miss something, or not, in terms
of developing these resources. Of course, not.
First, the resources are truly
enormous; they are of a global scale. According to preliminary
estimates, we have about 13 billion tonnes of oil and 95 trillion
cubic metres of natural gas. They represent colossal planetary reserves.
We have already begun to develop them. Mr Mikhelson who is sitting across
from me is in charge of the Yamal LNG project. This is
an international project.
You mentioned restrictions. Yes, they
do exist and they are harmful, of course, as well
as sanctions, and everything else, but they cannot stop
the process of Arctic development. To reiterate, no matter how
the sanction tools work, the first shipment from Yamal LNG went
to the United States. Funny, but true. And, I believe, trade
continues uninterrupted as well. Because whenever our US partners
and friends can benefit from something, they make whatever it is happen.
If they find it is not lucrative, then they tend to tighten
the screws. But only if they do not find it lucrative for themselves.
They have not been paying much attention to the interests
of other countries lately. Well, so, we will implement other projects,
and we will expand this one as well.
How fast the humankind is moving
towards replacing hydrocarbons with alternative sources is a different
question. According to expert data, global energy consumption will
increase in the coming decades, and the ratio between
hydrocarbons and renewable sources, such as nuclear power
and hydropower, will remain about the same.
Today (whether it is good
or bad, but this is the case) this relationship between different
sources remains unchanged. The total volume is up. Let us not forget that
Russia is a vast country with hydropower capabilities, and we are
expanding and will continue to expand nuclear energy. Nuclear power
accounts for only 16 percent of energy generation. In France, it
is already more than 90 percent, and we have only 16. We have to get
to at least 25. Our neighbours, Finland, are going to build
as well. And so on. So, we have not missed anything.
Now, with regard to whether
the pressure of sanctions is getting in our way or not. Partly
it is, but not in a critical way. To a certain extent, this
even encourages us to actively develop our own technology.
Last year, we invested 600 billion
rubles in import replacement (that is, to produce ourselves what we
used to buy from abroad). (Addressing Maxim Oreshkin) How much was
invested in import replacement last year? The Minister
of Economic Development does not remember. About a billion rubles.
This will continue, and we will continue to build up these efforts.
Frankly, it has a positive effect. Of course, it would be better
to do without any restrictions that distort the market
and global trade and lead to a slowdown
in the global economy. But the implementation of Russia’s
plans to develop mineral resources will not get in the way
of development, in general.
John Fraher: But do you not worry?
Yes, you are right, the Yamal LNG story has been very successful
to date, and no one doubts the fact that there are lots
of deep oil and gas reserves in the Arctic, but getting them
out of the sea is extremely expensive. Yes, it’s there, but do you
think it is going to be economically viable for Russia to do
this given the head… that we have talked about: sanctions, energy
transition, etc.?
Vladimir Putin: I have told you
that we do not see the transition. What we see is the man's efforts
to develop alternative energy sources, but so far there is no critical
transition from hydrocarbons to renewable sources – critical from
the standpoint of those who produce oil, gas and coal. This is
not even about oil, gas or residual oil. Currently, thermal power stations
are using coal, not even residual oil, oil or gas. And gas,
by the way, is the most eco-friendly type of fuel
of all the hydrocarbon sources.
Coal is the most common fuel
the world is burning today, and this is what we have to think
about. And the volume of this remains the same. Some
countries are reducing it, but overall it is not changing worldwide. This is
the issue to consider. Basically, I do not see any threats here.
By the way, here in Russia we are working to develop
alternative energy sources as well; we are making an active effort
and will continue to do so. But I do not see any threat here,
there isn’t any.
Speaking of high costs, you
mentioned oil production in, say, the United States. But we know how oil
is extracted there – by hydraulic fracturing, the most
environmentally hazardous method of extracting hydrocarbons.
In certain US states, where oil is extracted using this method, people
have dark sludge instead of clean tap water – you probably know this
better than me. Efforts are probably made to rectify this, but it is
a difficult task. The profitability of oil extracted using this
method is much higher than extracting oil and gas in Russia
in the most remote regions. That is why we feel confident
in this regard.
What’s more, if oil falls below $40,
oil production profitability and extraction growth will be questioned.
Of course, technology is advancing, and the cost of such
production will drop and fall below $40 a barrel; maybe it will be
at $35–40 – but oil production costs are lower in Russia anyway,
let alone gas; I won’t even cite figures so that I don’t scare
anyone. It is much lower than in the United States or Europe,
and even in certain oil-producing countries in the Middle
East.
John Fraher: And one final
question for you on the Arctic energy. Given that it is still
quite expensive to get oil and gas out of the Arctic,
and given these problems we have talked about, are there any tax breaks
for Russian companies to make it all worthwhile? Can we expect more
of them?
Vladimir Putin: I have
already said that we are planning to create, are creating and will
keep creating an environment that is beneficial
for the companies working in the harsh Arctic conditions.
This is not just about underdeveloped infrastructure, but about the need
to invest in technology that would 100 percent ensure
the conservation of nature. It is so fragile in the Arctic
region; we all know that, every colleague of mine sitting here knows all
about it. That is the first thing.
Second, when organising work like
this, we have to think about the interests
of the indigenous peoples of the North. Their interests are
an additional burden on the companies, and the state
must take on that burden to a large extent as well.
<…>
John Fraher: President Putin, do you
want to get in on that? [John Fraher’s discussion with Norwegian
Prime Minister, President of Iceland, Swedish Prime Minister
and President of Finland].
Vladimir Putin: Yes, I do;
actually, I am eager to.
Once again we return
to sanctions, to Crimea and so forth. If I am not mistaken,
Crimea is not part of the Arctic region, but I would like
to say a few words nevertheless. We all came here to discuss
issues related to the Artic region. We would not like to see the Arctic
turn into something akin to Crimea and Crimea turn into a desert
as a result of certain measures not being taken in time
(and a crime, as is well known to lawyers, can either be
an act of commission or an act of omission),
as a result of our criminal omission. That is what all
of us must think about today. That is what all of us are discussing
today, too.
These are not just empty words,
by the way; if you take a look at the sediments
discovered in the Arctic, you will find the remains
of tropical plants, tropical animals. This means, this happened before,
some time in history. We must understand what is going on with
the planet, and act together accordingly.
I will make another historical
digression. A lot of time has passed since our reformer Peter the Great
and romantic King Charles XII of Sweden fought against each other
and divided the territories. Now there are problems that we are
discussing today that can only be resolved through concerted effort. This is
the reason we’re meeting here today. I think our meeting will be
useful.
As for the EU
and the exchange of sanction strikes, you are certainly aware
of things. Bloomberg cannot fail to know this. Based on European
Commission estimates, I think in 2015 or 2016 the European
Union lost about 50 billion euros, while Russia lost about 25–26 billion euros.
It is clear that the EU is losing more than us.
The German numbers,
in the estimate of analysts from Germany, missed gains run
as much as 56 billion, whereas ours are three times less. But we are
not happy about losing less. No, I am saying that there are common losses
and this means real damage.
Now, regarding the very
character of the sanctions.
First, for any sanction
to be legal it needs to be authorized by the UN Security
Council. But this is not happening, so they are illegal. This is the first
point.
And now the second point
that I consider the most important one. For some reason nobody
imposes sanctions for interfering in the domestic affairs
of other countries, for disrupting internal political life
or for shattering entire states. Nobody imposes sanctions against
those who reduce countries to a position where they are compelled
to take certain measures to protect their interests.
Let’s just return
to the observance of the basic rules of international
law and the UN Charter. Probably, in this case there will be no
need to think about the aftermath of bombing Yugoslavia
or other things linked to such flagrant violations
of international law and their consequences.
Let’s simply return to normal
political life and realise that the world is interdependent and that
we should work together to achieve a common result.
John Fraher: Mr President, you are
known everywhere as a realist, as a pragmatist; you might
not feel like sanctions are fair, but a lot of European powers still
feel strongly that they need to stay in place. What is your feeling
on how long these sanctions are going to last? Are they going
to last ten more years? Is this Russia’s future as far
as the eye can see?
Vladimir Putin: Russia’s future
does not depend on sanctions. Russia’s future only depends on how
effectively we will be able to transform our political system, how
democratic it will be, how well it will bring to the surface
the healthiest forces in society and the creative energy
of our citizens. On how effectively we will be able to harness
it, how well we will be able to utilise the internal resources
of the Russian economy.
I said that we invested over 600
billion last year (637, I think) in import replacement. And it
has been effective. We have great science and education. We must keep it
all in proper shape and move forward. And I am confident
that we can do so, including when implementing the national projects.
Sanctions (if we want them
to work) are a tool which must be in the sole possession
of the United Nations Security Council. All other matters should be
resolved through dialogue rather than imposing one’s own agenda on other
countries. That is all there is to it.
Today, sanctions are being used not
as a tool of geopolitical struggle but simply
as an element of competition. Take Nord Stream 2,
for example. Our US friends are fighting it. But it is definitely
profitable for our European partners. “No, do not build it!” It is hard
to work with the European Union as there are many countries
there and nearly everything is decided by consensus.
We have already worked with Turkey
to build TurkStream along the Black Sea bed. TurkStream will launch
later this year. Yet we still cannot come to terms with
the Europeans. Our US partners opposed, in exactly the same way,
the “pipes for gas” project in the 1960s that we pursued
with the Federal Republic of Germany. It was exactly the same.
It was the same with Nord Stream
1. What would global energy look like now if there were no Nord Stream 1?
I can give you the answer. Prices would be even higher than they are
now, simple as that. Do you want to buy mineral resources
at higher prices? No.
I do not know what else should
be done to pressure the European countries. Only to make up
the difference between our natural gas and US LNG from their national
budgets because it is impossible under market conditions to make customers
buy 30 percent more expensive goods. It is impossible, they will just refuse
to buy. Households will not simply pay up.
So what must be done to break
even? To cover the difference with funds from the budget. But
this is the height of cynicism. I think if things keep going
like this, it will happen. But it is not our choice, it is our European
partners’ choice.
How about demands to increase
defence spending? What do you think this is connected with? Do you think it is
connected with the overall deterioration of the international
situation? No, it is just a pretext. The main motive is to fill
up the US military-industrial complex with additional European money. This
is where the main answers lie.
And for this not
to happen, let us go back to abiding by the elementary
norms of international law. We have spoken about that many times.
<…>
John Fraher: President Putin, with
apologies to the rest of the panel, there are a few
international topics that I’d just like to focus
on for a moment. I know that the last time that we met
in Moscow, a year and a half ago, you scolded me
for monopolising too much of your time at the expense
of your guests, but I promise I will get back
to the Arctic, I will not monopolise you too much. But
the first thing I would like to talk to you about is
actually relevant to the conversation we’ve had here. You talked
earlier about energy prices, and Russia is keeping the world guessing
in terms of what it is going to do about production cuts. We
have an OPEC meeting coming up in June. Can I first ask you, do
you agree with your Energy Minister that oil prices, as they stand now,
are broadly acceptable for Russia?
Vladimir Putin: I think
the Russian Ministry of Energy should agree with my opinion.
I would prioritise our work appropriately. And I must tell you
that common practice in the Russian Government is to always keep
in touch, always discuss these issues collectively, keeping in mind
the interests of the Russian economy and its various
sectors.
We do not advocate
the uncontrolled growth of prices, because even though we aim
to diversify the Russian economy, even now, it is not entirely
dependent on oil and gas, but also on industrial production. But
domestic industrial production is also affected by exorbitant price
increases.
Therefore, we are balanced
on the development of the global energy market. We are
quite satisfied with today's prices, and we see production volumes
in the United States growing. Yes, the United States consumes
significantly more than we do. We produce 11.5 million barrels per day, but
in the US, output is even higher now.
This situation suits us as it is
today, but we closely watch the market of course, together with our
partners, primarily the major oil producers like Saudi Arabia
and the Gulf states. We agreed that if cooperation is required, we
will meet and discuss it in the second half
of the year.
In any case, we are ready
to cooperate further with OPEC to work out common solutions. I would
be that careful with wording. We will be ready to continue cooperating.
As to whether that cooperation implies another decrease,
or keeping production flat as it is now, I cannot say yet.
We have plans for our companies
to develop new deposits, and we also approach this carefully. We
understand that production should not stop, investment should flow into
the industry, otherwise it can also create problems for us
and for the global energy industry. So, we will find balanced solutions.
But we will continue to cooperate with OPEC.
And I would still like
to return to your previous question about these tensions.
In reality, I do not see any particular military tensions here
in the Arctic. They do not exist. The only thing is that NATO
held the region’s largest exercises. This is true. We do not conduct such
exercises in the region. We held large-scale exercises but very far
from NATO’s zone of responsibility. It was in the East. This is
the first point.
Second, I would like everyone
to know that we invite foreign observers to all of our exercises
without exception. Always. We have certain agreements. We have always had them.
Now about aircraft. Our combat
aircraft do not fly over Norwegian territory. They have not and, I hope,
will not fly there. Yes, they fly in the neutral air space.
The aircraft of the country near which our aircraft routes pass,
accompany them. Madame Prime Minister is right. We also accompany NATO aircraft
if they fly near our borders or ships. So I do not see any major
threats here. These activities should simply be kept under control.
As a representative
of a neutral country, the President of Finland suggested
some time ago that war planes should fly with switched on transponders,
that is, devices that identify aircraft. We agreed and instantly submitted
this proposal in the framework of our relations with NATO.
NATO’s reply was negative. Go and ask them why they do not agree.
I think this is
an absolutely sound proposal. Technically, this is not a simple
solution but I gave relevant instructions to the General Staff
and the Defence Ministry and they are ready to implement
them. Let NATO do the same. In this case it will be clear what
aircraft, military aircraft, is flying and where it is located at any
given moment. We are an order of magnitude less active
in the Baltic and the Arctic than NATO. It is necessary
to know this.
John Fraher: Can I just bring
you back one last time to OPEC and then we can move on. It sounds
like you still stay much in wait-and-see mode when it comes
to production cuts, but do you think that the crises that we are
seeing in Venezuela, in Iran and now in Libya mean that
cuts are no longer needed to support prices? Did they make it less likely
that we will need cuts to support prices?
Vladimir Putin: Yes, of course,
we are thinking about it. Indeed, the crisis in Venezuela
and Iran, but actually, there is no crisis in Iran – only
the sanctions that restrict the country’s access to world
markets. In some African countries, including Libya, yes, we see all this
and take it into account. And this is what I had in mind
when I said that we would closely monitor the market. We also keep
in mind that the global consumption of hydrocarbons, including
oil, increases in the summer. We will see.
But at this time
the world's reserves do not require any special action. Our companies have
plans, as I said, to develop new deposits, so we must also
consider this and assist our companies. We can provide different kinds
of assistance. They can start drilling now, or we can ensure them
a break-even or profitable operation using various state support
tools. We have our own opinions on this. We will closely monitor
the market, and will make decisions based on the situation.
But cooperation with OPEC will continue.
John Fraher: So, I will give
this question one last attempt. So the big question is, will Russia agree
to extend production cuts to the end of September? Is that
more likely or less likely?
Vladimir Putin: We haven’t actually
reduced it, just refrained from increasing it. But if the market situation
develops in such a way that reserves increase dramatically,
for example, if the United States were to seize Venezuelan oil and quickly
increase availability in world markets, load their own refineries
to capacity, and channel their oil to the world market.
Or these may be some other
positive developments, let's say in Libya, from the political point
of view, suppose the country stabilises overall, and enters
world markets. Or suddenly, someone decides it’s time to let up
on Iran, but to try and create conditions for Iran
and Israel to agree somehow, and the situation normalises,
and Iran sends additional crude to the markets. Then we would
need to consider the changes and make an appropriate
decision. You are trying to squeeze a more specific answer from
me – but you are not getting it. We will cooperate with OPEC and make
a decision depending on the market.
John Fraher: I am a journalist;
I have to do my best. So I have one final question
for you on international affairs before we bring it back
to the Arctic.
Vladimir Putin: I beg
the pardon of my colleagues, but I have nothing to do
with it.
John Fraher: You can blame me, it’s all
my fault, but we will get back to it.
Before this panel, we reached out
to users of Bloomberg social media platform. It is called TicToc
and it attracts an audience of younger news consumers around
the world. A lot of the questions that we have from them
were about environmental matters that we have talked about, but unsurprisingly,
and I think you know what is coming here, the question
of Russia’s relations with the US also came up. So I wanted
to spend just a couple of minutes on that and then we
will move on.
At the Helsinki summit,
Trump invited you to Washington. Now that the Mueller report is out
of the way, do you think that Trump would be better able
to deliver on his promise of good relations with Russia? And are
you expecting an invitation to the White House this year?
Vladimir Putin: You know, we
have a good book called The Twelve Chairs and there is
a line in it: “Come visit us, my old mother will be very happy.
But he did not leave his address.”
The time must be ripe. We said
from the very start that this notorious commission of Mr Mueller will
not find anything because nobody knows this better than us. Russia has not
interfered in any elections in the United States. This is
the first point.
Second, there was no collusion
between Trump and Russia, which is what Mr Mueller was looking for.
I was not acquainted with Mr Trump. Yes, he came to Moscow but
as a businessman and, frankly speaking, this was not a big event
for us. This is sheer nonsense designed exclusively for domestic
consumption and used in the internal politics
of the US.
So we knew a mountain was being
made out of a molehill, so to speak, because we knew how it
would end beforehand. I was telling you this the whole time. Now it
has come to pass, but it did not make the domestic political
situation in the US any easier. Now new excuses are being sought
to attack President Trump.
It seems to me (excuse
the digression) that this points to something of a crisis
in the US political system itself. Look at what is happening.
The groups that are attacking the duly elected President do not agree
with the choice made by the American people. They are nullifying
the result.
This amounts to a crisis
of the political system. We have never seen anything like this
in US history before. Yes, there may be a fierce campaign but once
a nominee wins, everyone accept it. This was always the case
and all people united around the head of state to meet
common national challenges. We are not seeing anything of the kind
in the US now. On the contrary, the rift is deepening.
Do you understand what happened? They
put their group or party interests above the national interest. This
is what happened.
I am not at all defending
President Trump. Our positions differ on lots of issues. Numerous
sanctions have been introduced against Russia under his administration.
Naturally, we do not and will never agree with this and consider it
counterproductive. But if full-scale, equitable dialogue between the US
and Russia is restored, including the discussion of disarmament
issues that are of interest both to us and all humankind, we
will only be too happy. We are ready for this.
John Fraher: President Trump
says he feels vindicated by the Mueller report. President Putin,
on a personal level, after everything that has happened – President
Trump calls it a witch hunt – after everything that has happened, do
you feel happy for him on a personal level?
On the outcome of the Mueller report?
Vladimir Putin: President Trump knows
best. We know from US history what a witch hunt is. It is a dark
chapter in US history. We would rather it never repeats.
John Fraher: I have one
final question on this. At the famous Helsinki press conference…
One more, last one, I promise. You said that you hoped Trump would win
the 2016 election because he promised to make relations with Russia
better. Right now, do you want him to win again in 2020?
Vladimir Putin: You know, I have
already said that we disagree on many international issues,
on problems related to the resolution of some crises. But
we also have some elements of cooperation. However different
the approaches we take to settling the Syrian crisis, there is
still cooperation there, we work together.
We have common problems
in the Arctic, and we have gathered here, by the way,
to solve and discuss them. The United States has many interests
of its own in the Arctic zone. We face many problems related
to climate change in general. We know that the US did not sign
the Paris Agreement, and the US Administration has its own
reasons and logic. I am not among those who feel the current
Administration should be attacked for this, we just need to engage
in dialogue.
And in that case
I think we will be able to try to find a common solution.
Because it is hard to expect effective work from the international
community without US participation in the process, or China’s
or India’s participation, for example. The US is a big
emitter. It is obvious, and we must acknowledge it. This is why
a solution must be found, the US should be brought on board
and invited to engage in dialogue. On the whole,
as I see it, Mr Trump does not refuse. That is number one,
and even number two.
Third, I feel that many
bilateral matters are currently perceived under the pressure
of the domestic political situation. We hope when the situation
gets back to normal, prospects will open for cooperation, including
bilateral, on the issues I mentioned. And they include
terrorism, epidemics and the environment. Actually, there are many
issues, including arms control.
I think we are all interested
in that but we will start working when the conditions
in the US are right. It does not depend on whether we want it
or not. What does that even mean, to want it or not? This is not
an area where such categories can be applied. We respect the choice
of the American people. We are ready to work with their
president whoever it might be.
John Fraher: I’ve been told that
we are coming to the end of our time, so I would like
to close by asking each of you, perhaps in 90 seconds,
or as short as you can, to sum up, I guess
to answer this question. As the Arctic opens up… One moment.
President Putin.
Vladimir Putin: Excuse me, there
is something very important, as far as the Northern Sea Route is
concerned. Say it takes you 33 days to get from Yokohama to Rotterdam
via the Indian Ocean and 20 days via the Northern Sea Route,
as the distance between these cities via the Northern Sea Route
is slightly over 7,000 kilometres – 7,300 – and is almost 12,000
kilometres via the Indian Ocean. This is the point – it saves
you a lot of fuel and time, and so, of course, it will
be very attractive not only to China, Japan, South Korea
and Indonesia but it may even evolve into a very interesting
and promising area of international cooperation that will bring
people together, rather than drive them apart.
John Fraher: Understood.
So as we wrap up, I would
like to ask each of you to tell me, perhaps in 90 seconds,
what you see as the biggest opportunity as the Arctic opens
up and the biggest risk or the biggest source
of worry, as the Arctic opens up.
Vladimir Putin: I believe
the development of the Arctic is likely to give us
the following main advantages.
First, as I mentioned
earlier, these are global resources and they should work
for the benefit of humankind. It is important that they are used
in the service of humankind, in keeping with certain
international rules and agreements between the countries
of the region and other players. This is the most important
thing, on a par with the need to make use
of additional transit and communications opportunities.
I believe the main threat
is, primarily, the threat to the environment. We are worried
about polar bears. This is a figure of speech; we are worried about
the fauna in general, as risks related to warming and,
probably, to the development of the Arctic
and economic activity in the area will grow. We must take this
into consideration. That is why it is so important that we have gathered today
and will continue to meet, including at the Arctic Council
headed by our colleague to my left.
All decisions by the Arctic
Council are nothing more than recommendations but these are very important
recommendations, which have great moral and political significance
and all players implementing their national projects cannot fail
to take them into account. This work has to be coordinated. So,
cooperation in the Arctic offers a good example –
and it is also an important advantage – of how we can
jointly look for solutions to the issues on the global
agenda.
Thank you very much. I would
like to express my gratitude to you and my colleagues
who came to St Petersburg today to discuss these issues.
