Latest news conference: A first short analysis
“... we proceed from the view that we have failed to achieve many of the things that were planned and that needed to be done to diversify the economy over the past 20 years. This was not easy, if at all possible, given the foreign economic situation, which was favourable in the sense that businesses were investing into areas that guaranteed maximum and fast profits. This mechanism is not easy to change.”
It's quite clear that Putin refers to the financialization of the economy, started from the West the last four decades, and his intentions to reverse this situation and probably decouple Russian economy from this financial speculative economic model. However, Putin acknowledges that this model is not easy to be changed because it has been expanded quite fast in nearly every part of the world, including Russia.
“Could oil prices continue falling and would this influence our national currency and consequently all the other economic indexes, including inflation? Yes, this is possible. What do we intend to do about this? We intend to use the measures we applied, and rather successfully, back in 2008. In this case, we will need to focus on assistance to those people who really need it and on retaining – this is something I would like to highlight – retaining all our social targets and plans. This primarily concerns pensions and public sector salaries, and so forth.”
“Further growth and a resolution of this situation are inevitable for at least two reasons. One is that the global economy will continue to grow, the rates may be lower, but the positive trend is sure to continue. The economy will grow, and our economy will come out of this situation. How long will this take? In a worst-case scenario, I believe it would take a couple of years. I repeat: after that, growth is inevitable, due to a changing foreign economic situation among other things. A growing world economy will require additional energy resources. However, by that time I have no doubt that we will be able to do a great deal to diversify our economy, because life itself will force us to do it. There is no other way we could function. Therefore, overall, I repeat, we will undoubtedly comply with all our social commitments using the existing reserves. Fortunately, this year they have even grown.”
“I would like to remind you that Central Bank reserves amount to $419 billion. The Central Bank does not intend to ‘burn’ them all senselessly, which is right. The Government reserve, the National Wealth Fund, the Reserve Fund have grown this year by about 2.4-2.5 trillion rubles to a total 8.4 trillion rubles. With these reserves I am certain we can work calmly to resolve our main social issues and to diversify the economy; and I will repeat that inevitably the situation will return to normal.”
“How soon will the economy adapt if the prices remain at the current level or even go below 60 [USD/barrel], 40, or whatever? For us it could be any figure, the economy would simply have to get structured. How fast will this happen? This is hard to say. But it is inevitable. I would like to highlight this. This will be a fact of life.”
“As we all know, only an insurance policy can give you confidence. The main insurance for us here is the right macroeconomic policy and reserve funds for resolving social issues. This is the kind of insurance policy that would give us confidence.”
Briefly, Putin focuses on three issues here. The first issue is to retain the social state under such a difficult situation, and here smartly refers to this sector so that to show clearly the contradiction of priorities of the Russian economy against the Western capitalist countries. When crisis hit the West, the politicians-puppets have chosen to rescue the financial sector with billions and "punish" the majority through painful cuts in pensions and salaries or other social benefits. Instead, Putin repeatedly refers to the need of preserving the social benefits inside the current crisis, as top priority.
The second issue is the transformation of the Russian economy. Putin clearly seeks a restructure for the economy, in order to develop further various sectors and relief the weight from the oil-gas sector which makes Russia more vulnerable in geopolitical-financial games.
The third issue is the turn of Russia to fast developing countries. Apparently, Putin will seek further cooperation with China and India, as being fast developing countries with increasing energy needs. As he knows that the restructure of the economy will take time, Russia could turn to these markets to sell huge amounts of energy resources. Russia has a big advantage here due to its geographic position and its participation in the BRICS. Actually, Putin wants to signal that Russia is able to retain its social state through its reserves and through new energy markets until the crisis is over and the restructure of the economy completed.
“... I think it is up to the Central Bank to decide whether to reduce the interest rate or not, they should see and react accordingly. They should not hand out our gold and foreign currency reserves or burn them on the market, but provide lending resources. And they are doing this as well.”
“The agroindustrial complex is developing. I believe that by the end of the year growth there will amount to 3.3 percent. As you may know, this year we had a record crop of 104 million tonnes.”
“For instance, the prices of petrol and food are something they should work on. Moreover, the current situation, whatever anyone says, requires a ‘hands on’ approach. They have to meet with producers, those who are on the market, with retailers and with the oil companies that have significantly monopolised the market. The Federal Antimonopoly Service should function properly.”
“... we must decide whether we want to keep going and fight, change our economy – for the better, by the way, because we can use the current situation to our own advantage – and be more independent, go through all this or we want our skin to hang on the wall. This is the choice we need to make and it has nothing to do with Crimea at all.”
As BRICS are in the processes to decouple economies from the Western neoliberal monetary monopoly, they could bring back the gold standard as a base for their transactions, which is much more steady than the paper money unstable financial bubbles. They are ready, because they are emerging economies with billions of potencial consumer tanks and can attract other countries too being victims of the international financial mafia, like Argentina and Greece.
Also, this is another significant indication that Putin wants full autonomy for the Russian economy and especially for the crucial food and energy sectors. This could be done by decoupling it from the neoliberal financialized system where even the basic foods become subject of speculative games in stock markets, bringing further hunger for millions in poor countries, and, by fighting the monopolies which basically conquered the US and Europe.
“Didn’t they tell us after the fall of the Berlin Wall that NATO would not expand eastwards? However, the expansion started immediately. There were two waves of expansion. Is that not a wall? True, it is a virtual wall, but it was coming up. What about the anti-missile defence system next to our borders? Is that not a wall? You see, nobody has ever stopped. This is the main issue of current international relations. Our partners never stopped. They decided they were the winners, they were an empire, while all the others were their vassals, and they needed to put the squeeze on them. I said the same in my Address [to the Federal Assembly]. This is the problem. They never stopped building walls, despite all our attempts at working together without any dividing lines in Europe and the world at large. I believe that our tough stand on certain critical situations, including that in the Ukraine, should send a message to our partners that the best thing to do is to stop building walls and to start building a common humanitarian space of security and economic freedom.”
“... after the fall of the Berlin Wall and the breakup of the Soviet Union, Russia opened itself to our partners. What did we see? A direct and fully-fledges support of terrorism in North Caucasus. They directly supported terrorism, you understand? Is that what partners usually do? I won’t go into details on that, but this is an established fact. And everyone knows it.”
“... I am referring to the power of nuclear deterrence. [...] We have heard it even from high-level officials that it is unfair that the whole of Siberia with its immense resources belongs to Russia in its entirety. Why exactly is it unfair? So it is fair to snatch Texas from Mexico but it is unfair that we are working on our own land – no, we have to share. And then, when all the teeth and claws are torn out, the bear will be of no use at all. Perhaps they’ll stuff it and that’s all. So, it is not about Crimea but about us protecting our independence, our sovereignty and our right to exist.”
Putin, once again is very clear and understands the whole plan:
What we see in Ukraine is probably another failure of various think tanks, mostly from Washington, which they are funded, of course, by the international capital. It seems that, apart from the fact that they have underestimated Putin's abilities, they have also wrongly estimated that Russia had passed permanently in the neoliberal phase and would be ready to become an easy victim to promote their plans. According to these plans, the ultimate goal would be probably to dissolve the vast Russian territory in future and bring in power Western-friendly puppet regimes, in order not only to conquer the valuable resources, but also to impose permanently the neoliberal doctrine on "unexplored" regions and populations.
Latest numerous indications show that the US surround Russia, attempting to isolate the country militarily, politically and economically. The support of neo-nazis in Ukraine was aiming to drag Russia into an attrition war in East Ukraine, for a start. Some analysts claim that Washington's "hawks" prepare a nuclear "preventive" strike against Russia because they believe that they can obviate Russian or Chinese retaliation, using the anti-missile shield in East Europe. Unfortunatelly, there are indications that this may be possible. According to latest information, Washington proceeds in actions to surround China as well. It is not accidental that these revelations come after the recent big agreement between Russia and China on the energy sector. According to some analysts, the US transfer 60% of their naval forces to the Asian Pasific, while they plan to build a similar "anti-missile" system in the region.
The whole conference here: