April 2, 2009
[Medvedev] Press conference on the results of the G20 heads of state meeting
QUESTION: Were any decisions made today regarding the new global financial architecture, and how fair were those decisions, in your opinion, also considering, for example, that, as I understand it, the global reserve currency issue was not discussed?
PRESIDENT OF RUSSIA DMITRY MEDVEDEV: First of all, I would like to begin by expressing my gratitude to the British side. They conducted some very major work, including Gordon Brown himself, as the Prime Minister of Great Britain. Organising this kind of summit featuring the world’s leading economies is no easy task – since we are not talking about the Group of Eight, but rather, the Group of Twenty. Moreover, rather than dealing with global topics, the summit addresses general issues, and is dedicated to the most difficult, urgent issues – namely, the crisis. That is why I would like to note both the high level of organisation and the brilliant preparation done by the government of Great Britain.
Speaking about the results, we mean the result of collective work, not the work of just one government or several governments. And I must say this honestly and directly: I feel that the governments demonstrated a rather responsible approach. I will go even further and say that the first summit in Washington was, to a certain extent, an introductory one. Even though it was a direct reaction by the world community to the global financial crisis, some of the things we discussed there really were somewhat general in nature, and ultimately, the declaration adopted there was simply a set of topics and agreement to act on the basis of specific principles.
This summit, however, is entirely different: the declaration, or rather, the communique that was just issued, contains a series of fairly specific resolutions for tackling the global financial and economic crisis.
In this sense, I suppose, the work that was done yielded results. This is a step forward, a step in the right direction. Of course, we could not resolve all the issues, and that was not our goal, but we looked at the situation from the 2009 angle, we looked at the situation as it is developing. And all the decisions that were made in regard to financial support, stabilisation of our national markets, protectionism, individual states’ responsibility for their macroeconomic policies, and the future of financial institutions – all these are fully specific, serious resolutions addressing the future.
This does not mean that these decisions are in every way resolutions for direct action, although they do include some resolutions of this sort; yet, it means that in the course of our further work, which will continue, we may already prepare international agreements on this issue.
In response to the last part of your question about a “supranational currency,” “super-currency,” or “international reserve currency,” I would like to say that, indeed, this subject is not simple, and it is certain that no one expected us to make decisions about it. The goal right now is for our national currencies to normalise. The key goal is for international reserve currencies to also be predictable. But that does not mean that we are happy overall with the situation regarding national reserve currencies. This means that we must subject this situation to the most serious analysis. And today, in principle, this was done. I would like to note that the respective position was even added to Paragraph 12 of the communique: that we will make all the necessary efforts to conduct a balanced monetary and credit and fiscal policy. This suggests (because this was done at the suggestion of the Russian delegation) that we will get back to this issue and discuss it on the level of the International Monetary Fund and within the G20 framework. This work will continue.
QUESTION: It would be a “crime” not to ask this question. You met with the United States President Barack Obama. You were able to look him in the eyes. Did you see anything there?
DMITRY MEDVEDEV: Ok, it is good that we stick to the pre-established procedure regarding eyes and everything else.
You know, I am really happy that I met the President of the United States. It was a good meeting, and it seemed to me that we succeeded in making contact. Of course, it was our first meeting, and we will have another meeting in Moscow coming up this summer, but I can absolutely say that we see many issues the same way.
However, the well-known differences between out countries remain. I cannot say that we made good progress on the most difficult issues, but that was never expected. Most importantly, and I would specifically like to mention that, the President of the United States of America is able to listen and give valid answers to specific questions. I think this is a brilliant asset for any leader, especially for the leader of the United States of America.
We shall see. In any case, I am looking forward to a visit from my American colleague. I am sure that the meeting will be interesting and productive, especially since we have good plans. You know about them: drafting a framework agreement on limiting strategic offensive arms and several other things. So we shall see. I am happy with our meeting.
QUESTION: The summit communique states that the G20 countries will spend five trillion dollars by the end of next year on the development of their economies. Could you explain how this figure came about, what do you see as Russia’s contribution to this amount, and whether anyone has made any specific commitments regarding the figures?
DMITRY MEDVEDEV: If you had a chance to look at the communique, this is the text that was just recently elaborated, it does indeed talk about the financial support to various governments and the measures to be taken at the level of international financial institutions. Overall, these programmes do indeed add up to five trillion, but this is an estimate made by experts, and it includes, of course, a variety of national programmes that exist in all the countries, including the United States of America, the European Union, the People’s Republic of China, and our country. This is a collective estimate which, of course, can be broken down into support for the banking system, support for national businesses, all that we call the real economy, and these are programs that are already being implemented.
As for the volume of assistance agreed upon today for international financial organisations – first and foremost, the International Monetary Fund and the World Bank, – this assistance makes up 1.1 trillion dollars and can also be broken down into several components. It includes direct assistance agreed upon by the governments, assistance in the form of the so-called SDRs (special drawing rights), and several other forms of assistance, but naturally, the criteria and mechanism for rendering such assistance are yet to be determined. All the more so as we are talking about very big money, and naturally, before such assistance is rendered, we would like for the International Monetary Fund to change some of its features, in order for it to become slightly different, to change its functions and decision-making procedures. But, nonetheless, we really did reach an agreement on this kind of assistance.
As for our input, we formulated our position on this issue a long time ago: we will provide assistance in the amounts that are still subject to final agreement, but we can already say that a significant portion of that assistance will flow through the so-called EurAsEC anti-crisis fund, which, as you know, is currently being formed and its total volume is fixed at 10 billion dollars. It will also flow through our bilateral agreements with the states with which we maintain such contacts, with governments that have credit lines from the Russian Federation and that are in need today of assistance since their economies are in a rather difficult situation. These are usually neighbouring countries. We are assuming that this kind of aid will count as part of the overall assistance being provided by the entire international community. That is today’s situation.
QUESTION: Under the previous president of the United States, the problems in Russian-American relations in many ways were smoothed over partially thanks to the good personal relations between the leaders. During the hour and a half when you met with President Obama, did you establish good personal relations? And in addition to this question – little was said about the anti-missile defence: perhaps you see some progress on the issue?
DMITRY MEDVEDEV: Regarding good relations – I would like to count on that. Of course, personal relations between government leaders are rather important, and it is true, but that is not all. You can have fantastic personal relations and rather complicated governmental relations. We know of cases when this has happened, sometimes even in recent history.
Nevertheless, good personal relations are a very favourable background for developing intergovernmental relations. I enjoyed the conversation I had with the President of the United States of America. He is easy to talk to. I will say it again, he is able to listen and give a comprehensive, detailed answer, and be completely honest in answering even the most difficult questions. Because we have discussed everything, including the issues on which our countries have serious differences. We spoke about the anti-missile defence; we spoke about NATO expansion, and about the August 2008 events. We spoke honestly. I told the US President about what preceded all those events. I do not know how novel this information was for him, but I do hope that he will remember some of it as well.
So, I feel that the beginning of these relations is positive and pleasant.
As for the ABM issue, this is, of course, one of the most difficult topics. We touched upon this subject and agreed that the discussions will continue. In any event (I already said that after my first conversation with US President Barack Obama, when we spoke on the telephone), I felt, at the very least, that our partners on this issue are not taking any primitive position, but instead, are ready to discuss various alternatives. And that is important, because, before, we were hearing something entirely different: what difference does it make, there are just several dozens of missiles, we have already made the decision, come, if you want to, and see what we will be doing there, if, of course, they let you in, otherwise, it is over, nothing more to discuss.
Today, the issue is presented in a different way, with a totally different approach to discussing it, and I am very happy with that.
QUESTION: All summit participants agreed that we need to be more open and we need to disclose information about companies’ owners, transactions, mergers and acquisitions, including bonuses paid to company management. The United States has already adopted the bonus taxation initiative. Maybe Russia should think about introducing legislative limitations on bonuses in the companies that have received government assistance?
DMITRY MEDVEDEV: You know I feel this is a very good topic, and in our communique, we did state that in accordance with the financial standards currently accepted, these parameters must be monitored. This was done in the United States of America and in several European countries, and I feel that it is absolutely correct. During the crisis, when everyone is having a hard time, especially our people with ordinary incomes – this is not the time to pay out such enormous bonuses.
We know about the bonuses that were paid abroad. This, in fact, played a well-known part in the unfortunate demise of several financial and credit institutions. We too have examples of some rather high bonuses. That, of course, is the business of the company, but if a company gets support from the state, or if it is a state- or semi-state-owned company, I feel that our esteemed managers, CEOs of those companies, should be reasonable and opt for self-limitation. Even if they have already approved the pay-out of large compensations for themselves, they can change the decision. Once I am back to Russia, I will certainly make these recommendations to the Government and, accordingly, to state- and semi-state-owned companies, and the companies receiving the relevant support from the state. We must act properly in this kind of situation.
QUESTION: Before the G20 summit everyone seemed to be asking this question: are the decisions made here the beginning of the end of the crisis, or yet another step in preparation, the development of something. What should people expect? Is this the beginning of the end of the crisis, or not?
DMITRY MEDVEDEV: You know I would like to say that this is the turning point, but being a responsible man, I will not.
Because – and we have spoken about that on multiple occasions, and I have to say that once again, - nobody knows how this crisis will develop. Nevertheless, a range of trends in the financial sector, in manufacturing, which exist in most countries, indicate that we are not only rolling downhill, but in some sectors, we can already observe certain stabilisation. So far this does not involve the economy at large, and unfortunately, does not improve the living standards or the income levels, but nonetheless, in some places, in some blocks stabilisation is occurring. If this is the case, we have a chance at some point to take on a whole set of resolutions that will help us come out of this crisis nosedive.
I will not go so far as to say that after today’s resolutions, the situation will change radically. Today, in many ways, we are patching up the gaps that formed in the financial credit system and the global economy in general, three, four, or five years ago, but we should not have let our economies overheat to such an extent, since this ultimately led to a halt in financial life and, most sadly, a loss of confidence and a drop in the living standards of millions of people.
Therefore, the recovery will most likely take longer than we would like. But the fact that we met today and specifically discussed these issues is a good start. And there is one other thing that I would like for all participants to note: twenty to twenty-five years ago, it was impossible to imagine a situation in which such different states with such different economies, different mentalities, and historical traditions, would sit down at the same table and be able to agree on how to act in such a difficult situation – and in fact, we were able to agree quite quickly. Today, we recalled the lessons of the Great Depression – it all started in the 1920s, but the agreements were reached only at the end of World War II. It took 15 years and one severe war to understand that the depression did affect all of the world’s economies, all the more so since many governments did not participate in those discussions.
The pace of our actions suggests, at the very least, that many of our resolutions will be quite effective.
QUESTION: We know that today at the summit you spoke about the problem of protectionism and even said that Russia is ready to renounce such measures. What were you talking about: the measures that have already been taken, or that we will elect not to introduce any other protective duties or that we will be looking at how other countries deal with this?
DMITRY MEDVEDEV: You know, protectionism is a hard topic, since practically all countries swear to be committed to anti-protectionism, they reject it, yet they actually continue to take protective measures. And it is quite easy to explain the reasons behind such decisions: when problems affect a specific company, a specific workforce, most national leaders, state leaders, opt for national interests. But overall, protectionism is harmful to the global economy. Everyone understands this perfectly well. That is why special declarations on protectionism were made as part of the communique we have signed.
What does that mean? It means that we must refrain from taking primitive protective measures blocking business activity and impeding market operation. We must be careful with the measures already taken. If these measures prove inefficient, and this applies to everyone, including Russia, then those measures should be given up. Yet, in some cases – and we spoke about openly, and this is what I said to my colleagues, - we need to once again make sure that such measures are not working, they are inefficient or, on the contrary, hurt the interests of foreign manufacturers or foreign governments.
That is why the issue of protectionism is an absolutely specific one, related to specific situations. I will give no common examples, but it is clear that since the Washington summit we have witnessed between one hundred and seven hundred instances of protectionism around the world. That means that life takes its own course. Nonetheless, the position of government leaders is simple: protectionism during the crisis is, altogether, harmful, and should be curtailed.
Thank you very much.