Government of the Russian Federation : A working breakfast with foreign investors in Davos

Transcript:

Dmitry Medvedev: Good morning. I hope it is truly a good morning for you. 

Arkady Dvorkovich: It is. We have just managed to discuss a number of issues regarding global and Russian economic growth. And we have even held a vote on possible global and Russian economic growth rates.

Dmitry Medvedev: And what did the vote show?

Arkady Dvorkovich: I have failed to convince the room to support high or low growth rates. The vote has revealed that everyone believes that the global economy and the Russian economy will grow by about 3% in the mid-term, that is, during the next three to five years. However, people are divided on the meaning of 3% growth. Some say that this amounts to high growth, and others believe this growth is low.

Dmitry Medvedev: That depends on what figures you are starting with.

Arkady Dvorkovich: The factors that we discussed are linked with European problems and with the fact that Europe still has a long way to go in order to restructure its economy. As has already been said, Europe is not very eager to do this, because Europe considers it more important that workers at French plants should feel calm, and that nothing should disturb their wellbeing. We have noted that, of course, the debt problem will have to be solved, and that the monetisation of debts merely delays the solution of this problem. This measure does not solve the problem completely. We have also noted that Europe, as well as Russia, had to and still have to restructure their income patterns and budget spending in order to improve their policy. It has also been noted that the demand for raw-materials has continued to increase. China uses 50% of global resources. Demand for resources will continue to increase. The countries will have to find the proper incentives for encouraging tremendous long-term investment for the development of new mineral deposits and for food-production purposes. And we will have to feed China and all other emerging-market countries. But there is also the issue of innovations, which create new technologies, wealth, and which ensure the more cost-effective use of resources in this world. This is a serious source of future growth.

As far as Russia is concerned, it has found itself in a situation where we face serious risks that raw-materials prices might decrease as a result of various factors. In this situation, we have to follow the budget rule, streamline spending and implement reforms, which you mentioned in your speech yesterday. We have to implement the reforms that are becoming critically important. These are the main conclusions from the discussion, which is taking place against the backdrop of currency wars and serious discussions among world leaders on the overall global economic situation.

Dmitry Medvedev: And Mr David Cameron (Prime Minister of the United Kingdom) has proposed holding a referendum on withdrawal from the European Union.

Arkady Dvorkovich: Mr Medvedev, you have the floor. 

Dmitry Medvedev: As for the issues that you have discussed, I believe that this is the essence of the current global concerns. Is 3% growth high or low? You know, I'm with you in believing in 3% growth, but I hope that higher growth is possible. Obviously, 3% is some average volume that can be posted in the Russian Federation and worldwide this year. But we must try and make this growth more substantial. By the way, this is one of the priorities of Russia's tenure as the G20 chair: global economic growth and the employment issue. Consequently, we must ensure 3% growth, but we must strive to achieve more impressive growth. Such is my stance on this issue.

As for the problem of debt, most countries view this as a highly important issue. Obviously, a subsequent increase in debt-burden volumes is extremely dangerous. We have stipulated all sorts of fiscal-consolidation indicators to eliminate a debt burden. I didn't have time to hear what Mr Kudrin (Alexei Kudrin) said on this issue, but I recall that both of us had attended a G20 summit where we had set specific indicators. Far from all countries managed to do their homework. Incidentally, Russia managed to cope. I am talking about the years when all of us were combating the active phase of the global financial crisis. But the debt problem remains extremely complicated. Despite yesterday's decisions by the United States not to set any debt ceilings, many difficult and unpleasant decisions will, nonetheless, have to be made in this area. And this must be done.

We in Russia always discuss what will happen to Russia in the event that oil and gas prices come tumbling down. Frankly speaking, yesterday's discussions and various scenarios compiled by our esteemed experts were based on this assumption, at any rate, some of them. One scenario was submitted by Mr Alexei Kudrin, and two other scenarios were not linked with hydrocarbon prices. Nevertheless, they were rather complicated, as far as our country is concerned.

More to be posted soon...