By the end of last year, as you know very well, people were predicting that we were in for a very deep crisis. This has not happened. We have stabilised the situation, absorbed the negative short-term fluctuations, and are now making our way forward confidently through this difficult patch. We can do this above all because our economy had already built up sufficient reserves to give it the inner solidity it needs.
Looking at energy prices, on which our economy is still very dependent, unfortunately, I remind you that the average price for Urals brand oil in 2013 was $107.9 a barrel. In 2014, it dropped to $97.6 and over January-May this year, was at $56 a barrel. According to Rosstat [Russian Statistics Agency], Russia’s GDP contracted by 2.2 percent in the first quarter of 2015 compared to the same period in 2014, and industrial output was down by 1.5 percent over January-April 2015.
Our budget is stable. Our financial and banking systems have adapted to the new conditions and we have succeeded in stabilising the exchange rate and holding on to our reserves. Let me stress too that we did not resort to any restrictions on the free movement of capital.
We are responding to the restrictions imposed from outside not by closing off our economy, but by expanding freedom and making Russia more open. This is not a slogan; this is the substance of our actual policies and of the work that we are doing today to improve the business environment, find new partners, open up new markets, and take part in big integration projects.
Our task is to ensure sustainable growth, make our economy more effective, raise labour productivity, and bring in new investment. Our priorities are to improve the business climate, train the specialists we need for the economy and public administration, and education and technology.
We set the firm goal for the coming four years of settling tax rates that will remain stable and not increasing the tax burden on business so that companies can plan their work for the medium term. We will stick to these decisions no matter what the external situation or the burden on our budget.
Capital and assets returning to Russia from abroad are also exempted from tax payments, and their owners are fully guaranteed from any kind of prosecution.
We realise, of course, that for our national jurisdiction to be competitive, we need to keep moving ahead and make constant improvements.
The national regional investment climate rating also has a very big part to play. The rating is not a goal in itself of course, but will provide a working instrument for identifying and spreading best practice in the regions to the country as a whole.
We need to develop a whole class of public administrators who know how to work flexibly, take a modern approach, and understand business’ needs when it comes to the business climate and the public administration system overall. A mechanism for ongoing improvement of public management personnel will be one of the most important steps in work in this area.
I think it would be a good idea to set up special headquarters – project offices, if you will – in each region. They will become a kind of managing office for development, helping to introduce the best mechanisms for creating a favourable investment climate.
A comfortable business environment is one of the essential conditions for developing a mass of small and medium-sized businesses working in the non-raw materials sectors. This is a real road forward to economic diversification and job creation.
Our goal is for small and medium-sized businesses to conquer the domestic market and develop their export potential. We will therefore develop close coordination between the institutions for supporting industry and stimulating exports.
One of our most important tasks today is to give our companies incentives to invest in developing technology here in Russia.
Russian companies must take key positions in sectors and markets that will shape the economic future and the way of life of people in 20–30 years’ time, like the way the IT sector has dramatically changed our own lives over these last 20 years.
We realise, of course, that the quality of our education system will play a decisive part in developing our country and making it more competitive. Training for specialists must prepare them not only for today’s demands but also take into account the best global practice and the development prospects for new technology and markets.
Our companies propose that we build up a reserve of management personnel for universities training our engineering and technical specialists. I think this is a good proposal and we should carry it out.
The global economic development map is changing literally before our eyes. Asia-Pacific Region nations such as China, Japan, South Korea and ASEAN nations already account for one quarter of the global economy. Over the next decade, it is these markets that will become the primary source of growth in global demand for goods and services.
Strengthening partnership with APR states is a highly important element of our work to develop Russia’s Far East. We are creating the most free and comfortable conditions possible for placing capital and launching production.
We are launching a system of state support for major investment projects. At the same time, we are prepared to offer even more flexible and advanced mechanisms. The Government has already prepared a draft law on creating a free port in Vladivostok. The draft law applies to all key ports in Primorye, from Zarubino to Nakhodka, and 13 districts that are home to about 75% of the territory’s residents.
We strive to cooperate with everyone – everyone who is ready to work on the basis of equality and mutual respect, and wants to implement mutually beneficial projects.
I am confident that the trade and economic partnership with Latin American nations and BRICS states also holds enormous potential. The BRICS summit coming up in early July in Russia will certainly contribute to broadening our business contacts.
Russia is open to the world, to economic, scientific and humanitarian cooperation, and contacts with civil society and business representatives from around the world. I am confident that this policy, this dialogue, is in our common interest and it will help maintain the trust that serves as the foundation for our work together.
We face major challenges and we will develop, enter new markets, create modern technology, and implement large-scale projects. We will do it together with entrepreneurs, citizens and new leaders who are ready to work for Russia and for its development. That is why we are absolutely sure of our success.
I would like to say that if this situation is resolved by political means, no weapons will be necessary, but it does require goodwill and a desire to enter into direct dialogue, and we will assist in this.
We have always said and continue to say – there is nothing new here – that with all the current difficulties, I have always thought that Russians and Ukrainians are one people, one ethnic group, at least; each with their own peculiarities and cultural characteristics, but with a common history, a common culture and common spiritual roots.
We have always proceeded from the notion that we will resolve everything, even disputes, by means of negotiations – and it is only natural for neighbours to have disputes. However, if some third parties get involved in these negotiations, we expect them to take our interests into account as well, rather than simply offer us a choice.
I hear this all the time: Russia wants to be respected. Don’t you? Who does not? Who wants to be humiliated? It is a strange question. As if this is some exclusive right – Russia demands respect. Does anyone like to be neglected? It is actually not about respect or the absence thereof – we want to ensure our interests without in any way harming our partners.