kremlin.ru
www.Kremlin.Ru
Speech at the Ninth St Petersburg International Economic Forum
June 14, 2005
Tauride Palace, St Petersburg
PRESIDENT VLADIMIR PUTIN: Good day, dear colleagues and friends,
It gives me great pleasure to see all of you here at this forum that has traditionally taken place every year for the last nine years now. These kinds of regular gatherings are obviously useful for the business community, the academic community and for the state. I would also note that your forum has become a kind of institute for promoting economic integration. It goes beyond borders and distances and provides opportunities for a free discussion on today’s most pressing problems.
One of the forum’s key themes is analysis and evaluation of the effectiveness of various economic models. You are also to discuss the problems of transition to a more promising innovation-based development path.
It is well known today that countries able to ensure rapid advances in new technology are at a competitive advantage. How to adapt to such sweeping global changes is a relevant issue for practically all the countries present at this forum.
More than 40 countries are represented here. Our friends from the CIS countries and from countries further abroad have all come to this forum. This summit is taking place under the slogan: An effective economy and a decent life. These few words sum up the main goal that many countries have set themselves today. But each country chooses its own development path as there is not, and cannot be, it seems, a single universal recipe for development and prosperity. But I think that it is clear to all of us that, whatever our chosen path, only sustainable and long-term economic growth can make this goal of a decent life reality.
In this respect, let me look at the situation in the Russian Federation. I would like to just quote a few figures. Our country had an industrial output growth rate of 4.2 percent over the period from January to April 2005. Investment in our economy was up by 9.8 percent, people’s real incomes rose by 5.6 percent and real wages increased by 8.7 percent. Unemployment fell by 9 percent. Our gold and currency reserves, stabilisation fund, budget surplus and trade surplus are all continuing to grow.
Of course, we are not satisfied with everything that is happening in the Russian economy. Above all, we are not satisfied with the high inflation rate, which reached 7.3 percent over the first five months of this year. We are also not satisfied with the pace of economic growth in the country. But even so, the achievements we have made in the economy are enabling many Russians to improve their living standards and are giving business the chance to develop and carry out investment projects. What is also important is that the state is fulfilling its commitments and is setting major long-term guidelines, including in strategic planning and budget policy.
One of the most important issues that you are set to discuss is the extent of the state’s participation in the economy. It would seem that this question has long since been settled, but discussions continue and the issue remains a subject of much debate. This is an important issue for any country, for any economy. I think that many here today would agree with me that this question of the extent to which the state should get involved in economic matters can be seen in different ways at different times and during different historical periods.
It is clear that excessive state intervention in the economy puts a brake on business initiative. We have felt this on our own skins. But at the same time, the state cannot completely withdraw from the economy. There are, after all, some sectors where the state’s presence is entirely justified. Here, I am thinking of certain infrastructure facilities and the defence industry, for example. Of course, every country sets its own economic policy, but sharing experience and discussing these issues together at this forum is something that will be very useful for all of us.
Another subject that I consider of immense importance on your agenda is that of Russia’s place in the world system of division of labour. Russia today is a major exporter of natural resources, and this is our natural competitive advantage, a very significant advantage. Furthermore, extraction and primary processing of raw materials can also be transformed into a high-technology industry. But effective use of natural resources is by far not enough to ensure sustainable economic growth and even detracts us from resolving key development issues. One of our primary objectives, therefore, remains to restructure the economy and develop industries producing quality goods for which there is market demand. The competitiveness of our country in general is built on the competitiveness of each Russian product, each Russian enterprise.
Dear colleagues,
Regional cooperation is also a considerable focus for this forum. Russia, for example, places great importance on developing its vast northern territories and we are most certainly interested in effective international cooperation in this area. Our chairmanship of the Arctic Council places particular responsibility on us. We see our mission as being able to form a balanced approach to ensuring sustainable development for this part of the world. Our cooperation has been most successful in environmental matters, but we know that we have to work on making our partnership more active in other areas such as information technologies, preserving the unique cultures of the northern peoples and helping them to adapt to the reality of the market.
I would also like to note the multi-dimensional work that the northern regions of European countries and Russian regions are carrying out in the Barents Sea region. Effective energy use centres have been set up here, customs and border infrastructure is developing and an environment protection project is being implemented. I hope that this forum will also make a significant contribution to settling the problems the Arctic and the northern regions in general face today.
Dear colleagues,
It is no secret that a variety of opinions are heard at this forum, some that are similar and some quite different or even sometimes diametrically opposed. But we are all equally interested in coming up with management solutions that combine pragmatism, justified risk and a responsible approach.
In conclusion, I would like to wish all the forum’s participants fruitful work. I am sure that your debates and discussions will give rise to new concepts and legislative proposals. And I hope, of course, that your work will also result in new investment projects.
Thank you very much.