TRANSCRIPT: [Putin] Replies to journalists’ questions (transcript continued)

Vladimir Putin file photo with VOA logo; screen shot from video still

( – May 15, 2017)

Vladimir Putin answered media questions following a working visit to the People’s Republic of China.

Question: Mr President, an international cyberattack was reported on May 12. It hit targets in 150 countries, including agencies, banks and companies in Russia. How much has this attack harmed Russia and the world in general? What can be done to prevent other attacks like this one? And what can you say about the continued allegations of a Russian hand, or Kremlin’s hand, despite the fact that Russia was among the countries hit by the latest cyberattack?

Vladimir Putin: The damage to us, that is, to Russian banks, the healthcare system and other sectors, has been insubstantial. However, this is an alarming and negative trend overall, which is a cause for concern.

As for the source of this threat, I believe that Microsoft has named the culprits; it has pinned the blame on US security agencies. Russia has nothing to do with this. I am surprised to hear that there are any other versions. By the way, this is a brilliant illustration of what is happening in this sphere, which shows that they search for the culprits where there is none.

What else can I say? As you may know, last year we invited our American partners to join hands on the issue of cybersecurity and even sign an intergovernmental agreement. Regrettably, our proposal was rejected. The previous US Administration later said it was ready to get back to our proposal, but nothing has been done in practice.

We believe that the genies that are let out of such bottles, especially the genies that are created in secret laboratories, can ultimately turn back on their creators. Therefore, we should discuss this as soon as possible at a high political level to create a system of protection against such attacks.

Question: A question on the domestic economy, although it is related to China. There is a Government resolution that says that all state-owned companies will have to pay 50 percent of their net profit in dividends.

Vladimir Putin: The decision has yet to be finalised.

Question: There is a draft resolution, if I am not mistaken.

Vladimir Putin: There is a draft resolution, but it only becomes final once it is approved.

Question: Yes. Rosneft is not covered by this initiative since it is not a state-owned company. However, there is also Gazprom with its huge investment programme that includes, among other things, China and construction of the Power of Siberia pipeline. Last year, Gazprom also benefited from an exemption, and paid less than everyone else.

Would it be advisable to create an exemption for Gazprom this year as well so that it has more money to invest, considering that otherwise it would have negative cash flow?

Vladimir Putin: As a matter of fact, we are about to move to International Financial Reporting Standards (IFRS), while there are also Russian Accounting Standards. Under IFRS, a major company like Gazprom has huge profits, but only on paper, without generating cash flow. For this reason, when the Government decides on this issue, it will look at the real situation instead of gains on paper, and the final decision will be taken accordingly. We discussed this issue with the Prime Minister just before departing for Beijing.

Under IFRS, they report huge profits, but these gains are only on paper, without actual cash flow. However, there are still profits, and the Government will make the decision based on the actual situation.

Question: Will Rosneftegaz also pay out 50 percent in dividends?

Vladimir Putin: Yes, 50 percent is what Rosneftegaz will pay.

Question: We heard just a couple of hours ago that Energy Minister Alexander Novak has reached agreement with the Saudis on extending oil production limits for another nine months, until March 2018, as far as I know. How do you assess this agreement’s prospects, given the shaky and volatile situation with oil?

Vladimir Putin: I think the prospects are good, and the fact that our main partner on this matter – and Saudi Arabia is unquestionably our main partner here – has respected all previous agreements in full is cause for optimism.

More importantly, Saudi Arabia has an interest in maintaining stable and fair oil prices for a number of reasons. I will not list them now, but I think the experts are well aware of these conditions.

Finally, I think it right that the decision was taken not for 2, 3 or 4 months, but for 9 months, into next year. This is the most important condition for stability.

Russia will pursue the policy it has chosen on this issue. I met recently behind closed doors with the heads of our biggest oil and gas companies. This meeting is no secret. We discussed this matter with the Energy Minister, and we support this proposal.

Question: My question concerns the domestic economic situation. Experts at the Central Bank issued a report today saying that the economy stands to lose more than it stands to gain from an artificial weakening of the ruble.

Do you agree with this and do you think we should restrain the strengthening of the ruble exchange rate? Is the current value fundamental, in your opinion?

Vladimir Putin: There is a contradiction in your question. You speak of artificially weakening the ruble, and then ask whether it makes sense to artificially strengthen it.

We cannot do anything artificially, and in this sense, I agree with the Central Bank. The Central Bank’s position is based on a range of differing but extremely important components for our economy. Practice has shown that the Bank’s actions are balanced and correct.

The Central Bank asked about the same thing that interests all of you, the extension of the production limitation agreement with Saudi Arabia, but no one, including the Central Bank, knew what the decision would be, as it only came today. The Bank has to be very careful in its actions. Fluctuations on global markets are linked not only to the decision between Russia and Saudi Arabia, but to a number of other factors as well, and this is having a serious impact on our economy, for now, at least.

The Central Bank’s position has always been that if there are fluctuations in the other direction, it should not take any hasty action. In this sense, it is absolutely right. It takes a gradual approach and is cautious about lowering the key rate. We look constantly at what this would mean for the budget and for individual export-oriented and import-oriented companies. Overall, we see a satisfactory balance and have no intention of taking artificial steps.

Question: We saw you playing the piano yesterday. As a music lover, do you not feel regret that Russia did not take part in Eurovision? Could this situation have been avoided?

Vladimir Putin: I was sorry that the piano was so out of tune. That is what I regret. It was difficult even for me, who plays with two fingers, to play anything on it. I would not say that I played, rather, I just put a couple of fingers to the keys while waiting for our Chinese friend and partner. I thought that if Mr Peskov was filming anything, it was more likely for internal consumption, for the archives, but they decided to make it public. Never mind. I do not think I misled anyone here.

As for Eurovision, those who wanted to watch it could do so online. As for the fact that our relevant organisations refused to take part in the event, I think this was the right decision because, as I see it, the current authorities in Kiev are not in a position to host events of this kind.

Question: Continuing with your piano playing, I think you played Moskovskiye Okna [Moscow Windows], and the Leningrad anthem [City on the Free Neva]. What melody would you play before a meeting with Trump? And what instrument? Thank you.

Vladimir Putin: I do not know. I think I should meet with him first, discuss things, and choose a tune depending on the results.

Question: Mr President, allow me to return to the topic of today’s Belt and Road Forum. How will the Chinese initiative affect countries along this Silk Route where there are conflicts and instability, such as Syria, Iraq and Afghanistan? And how could this affect countries like China and Russia that are interested in making this work?

Vladimir Putin: The aim of large-scale and long-term programmes of this kind is to make the world more stable and fair. After all, the ultimate goal of the initiatives that were discussed today is to promote steady development, increase citizens’ incomes and improve education and healthcare. In other words, they seek to eradicate the root causes behind terrorism and other problems of this kind.

In this sense, there is no doubt that implementing socioeconomic development programmes around the world and in specific regions should have a positive impact on the situation in the problematic places in the world.

For China as well as for Russia this means that cooperation will continue, but on a more global scale and with greater confidence that other parties willing to promote international cooperation will be joining our programmes. I have already mentioned Russia’s proposal to create an Asian Energy Ring. What could be bad about China, South Korea, by the way, and Japan all working together on a single major project? There is no doubt that this would benefit all these countries from both an economic and a political point of view.

Question: We have been discussing the economy a lot over these days. China is a powerful country and has very ambitious plans. Do you not fear that if everything planned under the Silk Route project eventually becomes reality, China will economically swallow Russia as well? Would we be able to withstand this pressure?

Vladimir Putin: Russia is not the country to fear anything. And there is no danger at all of China’s actions being aimed at someday swallowing others. We agreed on everything together, after all, and we do not take decisions that would be to our own detriment. We agree only to those proposals that benefit us, and if something benefits us and our economy, what is there to fear? It would be a shame not to make use of the opportunities this cooperation creates. Russia is open for cooperation with all countries, and today China is demonstrating its openness to the entire world.

I met yesterday with some big business representatives, foreign business representatives, and heard their assessments. I expressed a similar sentiment, in cautious terms, during my remarks yesterday at the opening, and then yesterday evening I heard my own argument repeated during this conversation with representatives of European big business. They said, “It is amazing to see how China is showing greater openness and commitment to an open economy, while the countries that we always looked to as the locomotives of open markets, are acting and talking in a way that frightens us”.

With this kind of approach, there is therefore no fear of any future threats.

Question: I would like a clarification regarding the new social and economic development strategy that [Alexei] Kudrin has drawn up. He has done his part of the work and passed it on to the customer. Will this strategy be submitted to public discussion?

I am asking because it has been put together behind the scenes, by the experts, but the issue is serious and important. Perhaps the strategy is to form the foundation for a new series of presidential executive orders in May 2018?

I would not like this strategy to end up as yet another strategy that the authorities never use and that has no significant influence on the economic and social sectors. What can be done to avoid this situation?

Vladimir Putin: It always looks as though we are drafting strategies and making plans and that nothing comes of any of them.

This is absolutely not the case. If we did not draft strategies and plans, we would be acting in a state of chaos. Strategies set the development vectors and define the priorities. Of course, life obliges us to make adjustments. Some of what is planned is accomplished and some is not. This is by far not the worst thing. In this sense, our programme until 2020 has considerable importance, and so do the May 2012 Executive Orders that you mentioned. However, of course, changing circumstances, especially in the economy, and the large number of uncertainties, do oblige us to make adjustments along the way.

As for Kudrin’s programme not being put to public discussion – complain to him about this. I presume that any serious strategy or proposal coming from the government, at the highest level, should undergo broad public discussion.

However, the Government is drafting a programme too. I have agreed with Prime Minister Dmitry Medvedev that he will present it very soon. We also have other groups working on programmes, the Stolypin Club, for example. These are different approaches and often different visions.

I believe, or rather, I am certain that we in the Presidential Executive Office and I personally not only examine thoroughly all of these proposals, but look at how they can be used for our economy’s and social sector’s strategic development over the coming years.

Let us round up now.

Question: Six months ago, replying to a question from our colleagues as to whether you would take part in the next presidential election, you said this question would be answered in due time. Has that time come?

Vladimir Putin: No.

Any more questions? Let us end on something positive, on a “yes.”

Question: I would like to ask about something positive, but I will touch upon a sufficiently sensitive issue anyway – the development of the Arctic.

Russia is currently drafting a programme for the Arctic’s socioeconomic development until 2025. Initially, the Ministry of Economic Development suggested allocating about 211 billion rubles in budget funding, and now there are plans to reduce this sum to 51 billion. If so, at the expense of what projects would it come? I ask because our Arctic projects, especially the development of crude oil deposits, are still subject to sanctions. Is there any link here?

And will the icebreaker Leader, due to be built in our country, be financed from the budget or will the funding come from some other source that has appeared?

Vladimir Putin: You know, we have a plan to build an icebreaker fleet, including a nuclear icebreaker fleet and vessels with other modern features, and this work will continue. This plan may be delayed somewhat for many reasons, including a shortage of budget funds and the need to carry out a certain scope of work in the northern seas as the relevant projects become ready.

The first stage of the Yamal LNG project is to start operating this year, and icebreakers and tankers should be ready by that time. As you have seen, the first tanker has already called at Sabetta, a new port built from scratch.

Everything is developing gradually. There is never enough budget funding for every project. To be honest, budget funding is not a panacea and is not the main economic development tool. Attracting private investment is the main tool of economic development. We need to create favourable conditions for attracting such investment. By the way, the programmes mentioned by your colleague are being drafted precisely for this purpose.

We will address this issue in a serious and systemic manner, without overemphasising any aspect of our work. When I say ‘our’ work, I am referring to the work of the Government, the business community and the whole of society.

Thank you very much. I wish you all the best.

[featured image is file photo]