First Serious BRICS+ Meeting of Year & Nabiullina Interview

BRICS Sherpas/Sous-Sherpas meeting, Moscow, January 31, 2024

The first serious gathering of BRICS+ working teams sat down today in Moscow to being work on the year’s agenda which is being set by Russia as this year’s president. many readers will see familiar formulas expressed by FM Lavrov regarding the change in geopolitical relations and the goal BRICS+ has as an association, some of which will be highlighted for emphasis. It should be noted that more nations are connecting their financial and business institutions to new financial messaging systems that are rapidly reducing the use of the dollar in global transactions. News on that front and more will be discovered by reading Ria Novosti’s interview with Russian Central Band Chair Elvira Nabiullina, which will follow Lavrov’s remarks, all emphasis mine:

Dear Colleagues, Friends,

We are glad to welcome you to this year's first meeting of BRICS Sherpas/sous-Sherpas, which is taking place as part of a large number of events planned by the Russian Chairmanship. You're familiar with the plan. The year has begun, we need to work. Let's meet the real winter. But I am sure that you were able to feel the Russian cordiality and hospitality. Welcome!

If we talk about the agenda that is relevant for our association today, then these are all issues related to the observed objective processes. We see a profound transformation of international relations, which reflects the formation of a more democratic, just and multipolar world order that reflects the cultural and civilisational diversity of the modern world and the right of every nation to decide its own destiny.

This process is historically objective. New powerful centers of economic growth, financial and political influence, are emerging. It is developing not simply because the "collective West," led by the United States, is struggling to maintain its dominance (or whatever is left of it) that it has enjoyed for 500 years in human history. At the heart of this domination were colonial wars, the exploitation of other peoples, and much more. This can be described as the privileged position of the "golden minority". He is a "billion" but a "minority". The West is trying to maintain this position and impose recognition of its "privileges" on everyone else – as we say now, the World Majority.

This is done by promoting its own "rules" on which the world order should be based (this is the talk of the town). It implies the adoption of decisions by the West and the need for others to implement them in the forms that are convenient for it at the moment. This applies to the financial, technological, ideological and international political spheres.

You are familiar with the sign of "multilateralism." The slogan "inclusivity" is the same. Western politicians are trying to disguise unilateral steps that do not contribute to a long-term, fair solution to the accumulating problems, be it world politics, security or the economy. It is already obvious to everyone that the dollar is either an active or a potential "weapon" for solving political problems. Dollar grants from international financial institutions are actively used as instruments of coercion. Unilateral sanctions undermine the well-established, convenient and efficient supply chains, as well as the prospects for the development of countries in Asia, Africa, and Latin America. Instead of broad humanitarian cooperation, a "cancel culture" is being implanted.

The policy of the "Western minority," which includes a reliance on force and pressure on dissenters, provokes serious crises in international relations and multiplies the number of conflicts. Unhealthy trends are observed not only in the Euro-Atlantic region, but also in the Asia-Pacific region, where Washington and NATO are trying to bring the logic of bloc confrontation.

The long-term attempts of the United States to monopolize mediation efforts in the Middle East settlement have led to a sharp escalation of the Palestinian-Israeli conflict and to a humanitarian catastrophe in the Gaza Strip. More than 25,000 civilians have been killed and three times as many wounded. Tel Aviv's refusal to comply with the UN Security Council's decision to establish a Palestinian state is being ignored. This is a direct challenge to the numerous decisions of the Council and the General Assembly of the world Organization. It is the establishment of a functioning Palestinian State, living side by side in good-neighbourliness and security with Israel and other countries in the region, that is the key to the long-term stabilization of the Middle East and to the eradication of extremism and terrorism there. In today's situation, there is a real danger of destabilizing a much larger area in this important region of the world.

We are fully aware of the West's policy. Everyone knows about the hybrid war they have unleashed against Russia. The United States and its allies are imposing the notorious "Vladimir Zelensky formula" on the international community. I know that countries in the Global South, including those present here, are being actively invited to participate in relevant events. They are trying to present this "formula" as the only option for a settlement. But it is obvious to everyone that this option is nothing more than an ultimatum for the Russian Federation. It is unworkable and does no credit to those who try to present themselves as foreign policy figures and effective "managers."

Recently, another meeting of the Copenhagen format was held in Davos under the Zelensky formula, where some of your countries were represented. Since then, I have had conversations with colleagues from a number of friendly states, including about the role of the Global South in these "meetings." There is only one goal – to affirm that there is no alternative to the "peace formula".

I recalled that our Chinese friends had their own document, which is distinguished by the fact that it puts at the forefront the need to eliminate the causes of the current situation in Europe. That's the main thing. He said that our South African colleagues also had an initiative that was discussed in July 2023 in St Petersburg on the sidelines of the Russia-Africa summit. We have adopted a document on cooperation to address the humanitarian aspects of the crisis. President of Brazil Lula discussed his proposals with President of Russia Vladimir Putin.

I asked those who took part in the peace formula meeting in Davos how much attention is paid to the initiatives of the world majority. I was told that no attention was being paid. They don't need initiatives. You don't need anything from them at all. Only to come and sit for them to be arithmetically counted, and then presented to the world a new record figure. All this will be included in Vladimir Zelensky's peace formula.

This is a complete disrespect and disregard for any opinion other than one's own. This is pure colonialism, imperialism, whatever you want to call it. We have gone through all these historical phases of human development. There is no doubt that this entire "Copenhagen process" is nothing more than a continuation of the well-known line of the West, which declared its task to inflict a "strategic defeat" on Russia and at this price maintain its global dominance, and then move on to the next declared "stage" of world politics – the containment of China as the main challenge for the world minority.

What is happening in Ukraine is a tragedy. The West "doesn't care" about the lives of Ukrainians. This is a "side effect," as they say in the U.S. military. The violation of all human rights and freedoms of national minorities by the criminal Kiev regime is completely ignored. For Russians and Russian-speakers, these rights are prohibited by law. At the moment, these are the results of the activities of Western "geopolitical engineers."

Washington and its European satellites are spending huge amounts of money to contain Russia. This is in stark contrast to the approach of Western capitals towards the Global South, especially African countries. Kiev is rapidly receiving more and more fabulous sums. Aid to the Kiev regime has already exceeded $200 billion in less than two years. At the same time, humanitarian supplies for developing countries, the transfer of technology to them is measured by several times lower figures and is subject to numerous requirements. In a number of cases, support for Ukraine is provided at the expense of funds "saved" during the suspension of projects in Africa and the Middle East. We are well aware of this.

Nevertheless, we know that it will not be possible to turn back the course of history. We are witnessing the strengthening of the positions of the global majority – the states of Eurasia, the Asia-Pacific region, the Middle East, Africa, Latin America and the Caribbean. Most of these countries are increasingly asserting their national interests and identities and striving for genuine strategic independence – not in isolation, but in cooperation with other free, independent states that respect international law. In other words, national interests are at the forefront, not the whims of former metropolises.

Our strategic partners, including those in BRICS, are pursuing a pragmatic and independent foreign policy. In this way, they differ from the policy of the West, which imposes only models of development that suit it. The natural desire of the new world centers to actively participate in the adoption of globally significant decisions is supported by the growing economic potential of all the states represented here. It is no coincidence that not only political, but also trade and investment activity is shifting from the Euro-Atlantic to Eurasia and the Asia-Pacific region. Especially at a time when the West is destroying all the tools of globalization, regionalization of world markets is taking place, and production and logistics chains are being rebuilt so as not to depend on Western tools. The positions of other currencies are strengthening compared to the dollar, euro and other Western currencies.

Today, in principle, no serious issue can be effectively resolved unilaterally by any power, no matter how large and self-confident it may be, especially at the expense of infringing on the interests of other countries. The collective approach professed by the BRICS countries and a huge number of their supporters is not an option, not a whim, but the imperative of the times. That is why we have chosen "Strengthening Multilateralism for Equitable Global Development and Security" as the motto of Russia's BRICS Chairmanship. We see BRICS as a bulwark, a prototype of a multipolar world, the formation of which we are all trying to contribute to in the name of a brighter and more harmonious future for our peoples.

BRICS is an organising principle at the global level for the Global South and the East, but not on a bloc basis (I want to emphasise this), but on the principles of mutual respect, sovereign choice of the path of development and ensuring in practice the key principle of the UN Charter – the sovereign equality of states.

If you pay attention, since the creation of the UN, all its subsequent activities are a clear example of the fact that in no crisis situation, in any conflict, neither the United States nor its allies have ever respected the principle of the sovereign equality of states. They always wanted to be more equal than others.

The accession of new members (Egypt, Iran, the UAE, Saudi Arabia and Ethiopia), whom I once again warmly welcome, strengthens the strategic partnership and the international position of the association. You know how many countries are interested in establishing partnerships with BRICS and have officially announced this. We will pay great attention to this during our chairmanship.

The statistics speak for themselves. The aggregate GDP of the BRICS countries at purchasing power parity has already amounted to about a third of the corresponding world values and exceeded the indicators of the Group of Seven. The BRICS account for 30% of the world's land area, 45% of the world's population, significant global production of oil and other resources, and about a quarter of the world's merchandise exports. With such a rich potential, we cannot afford to be a bystander and follow in the wake of historical processes, especially given the hopes that the countries of the Global South and East have for BRICS. The association is quite capable of shaping the global agenda, consistently defending the interests of the global majority, offering its own vision of the contours of the future world order, relying on objective events, and not on artificially arranged schemes designed to slow down the development of humanity.

At the same time, we all agree that this kind of activity and initiative does not mean trying to impose something on someone. We are always open to an equal dialogue aimed at finding a balance of interests. An example of such a dialogue and its effectiveness was the G20 summit in New Delhi in 2023, where most of the countries present here were represented. In the end, it was possible to adopt a document that was of a balanced nature. Especially in the geopolitical part, it reflects the objective state of world politics. The West has failed to impose its one-sided vision of the foreign policy problems of the modern world by hushing up the crises that it has long fanned and that cannot be "extinguished" after American and British adventures. We have a fully capable association that knows what it is trying to achieve and is able to achieve these goals (I would like to emphasise once again) without imposing any approaches on anyone.

For many years now, we have been carrying out fruitful cooperation between countries representing different civilisations, religions and macro-regions within the framework of BRICS in a variety of areas, from politics and security to the economy and humanitarian contacts. Today, integration processes at the regional level are rapidly developing in the world. We see this in Africa, Latin America, the Caribbean and Eurasia. Interesting projects are being formed there with the participation of the SCO, the EAEU and ASEAN, including in the context of interaction with China's One Belt, One Road project. All these sub-regional and regional processes will accelerate even more and become more saturated in conditions where the global instruments that the West has been actively and for a long time promoting and convincing everyone that they are universal, that the dollar is not some kind of property of the United States, but it is global. And everyone can freely use the dollar and other instruments and principles of the free market and globalization, such as the inviolability of property, the presumption of innocence and much more, for their own benefit and benefit, in the interests of their development.

It turned out that all these "holy principles" of the free market could be cut off overnight and turned into a tool of coercion for those whom Washington does not like today. Such a fate can await any country. The regionalization of the world's economic development and logistics processes is a natural reflection not only of life in the respective parts of the globe. These processes will be accelerated by the fact that Washington and those who control the current monetary, financial, trade and world system have proven to be incapable and unreliable. This is a healthy process that frees the countries of the Global South and East from the risks of manipulation by former colonial powers.

As for our association, this is a manifestation of the same trends, but at the global level. BRICS is something like a cooperative "network" for regional and sub-regional processes in the countries of Asia, Africa, and Latin America. The cooperative "network" will contribute to harmonization and the development of integration in the countries of the world majority at the global level. These topics were discussed at the level of our presidents and prime ministers. I would like to emphasise once again that all this is in no way intended to create a mechanism for a new diktat of the world majority. Not at all. In all our actions and statements, in declarations and in practice, all our countries always emphasize that we are open at any time for an honest and equal dialogue. But it should be honest (we have not seen such approaches from many Western leaders for a long time) and equal. This is also a rare quality that is clearly in short supply on the side of the world minority. We will continue to work on the basis of our action plan that you have seen.

We will pay special attention to ensuring the smooth integration of our new comrades, the new BRICS members, into everyday activities. We will continue to consider as a priority the development of cooperation with countries (there are about 30 of them) that have expressed interest in getting closer to the association and participating in our practical projects. I am referring to the outreach/BRICS Plus formats and the agreement of the leaders at last year's summit to form a new category of partner countries. In this sense, the Sherpas have a very great responsibility. The main work in terms of volume and substance, in terms of achieving common positions, you do at your level. For this, we are very grateful.

This year, Russia's chairmanship will do everything to make your work comfortable and will strive to help find solutions to issues where common consensus and approaches need to be strengthened.

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Before I conclude my remarks, moving smoothly from the topic of the special role of Sherpas, I would like to carry out an important mission on behalf of President of Russia Vladimir Putin and present the Order of Friendship to Ambassador-at-Large for Asian and BRICS Issues of the Ministry of International Relations and Cooperation of the Republic of South Africa, South African BRICS Sherpa Abdullah Sooklal.

We know him as a principled and skillful diplomat who is firmly and sincerely convinced of the need for collective development and common prosperity for all mankind. It firmly adheres to the sacred principles of BRICS – openness, equality and consensus. Mr Sooklal was one of the originators of many important BRICS initiatives, including the launch of outreach meetings between the five countries and the leaders of like-minded countries, the creation of the New Development Bank and the BRICS Vaccine Research and Development Centre.

I will not reveal a secret if I say that Ahmed Sooklal is a great friend of all the countries represented here. He has been to Russia many times and knows our national traditions in all their guises. To a large extent, this was facilitated by the events in the BRICS format during the years of our chairmanship in the association. He is truly a "veteran", but with a youthful enthusiasm and energy, which, I am sure, will benefit many of our endeavors. We appreciate his commitment and contribution to strengthening the strategic partnership between South Africa and Russia.

And now for the interview with Elvira Nabiullina. Format original; emphasis mine:

The BRICS countries have already surpassed the G7 in terms of weight in the global economy and are reducing their dependence on the previous financial infrastructure by increasing settlements in national currencies and creating their own platforms. In the year of Russia's BRICS presidency, the head of the Bank of Russia, Elvira Nabiullina, told in an interview with RIA Novosti what is the share of club members in trade with the Russian Federation, whether the Central Bank will include new currencies in reserves, when the regulator can move to easing monetary policy and why low mortgage rates cannot be equated with housing affordability. Interviewed by Anastasia Saprykina and Dilyara Solntseva.

– This year, Russia has taken over the BRICS chairmanship. How do you assess the club's prospects in the global economy? Is its weight already comparable to that of the G7?

– The economies of the BRICS countries are developing quite rapidly. With the accession of new members, the share of BRICS in the global economy increased from 31% to 35% at the end of 2023 in terms of purchasing power parity. And these numbers are slightly higher than the share of the G7 countries. So the role of BRICS in the world is significant.

-What are the priorities and goals of the BRICS central banks this year?

"We are going to come out with a busy agenda. But at the same time, of course, we must adhere to the principle of continuity and the development of the initiatives proposed by our partners in previous years. Among them, I will highlight four key ones.

The first is the development of the payment sector. We have an expert group that discusses various issues, including digital currencies and the interaction of payment systems. This year, we want to focus more on settlements in national currencies.

The second topic is cybersecurity in the financial sector, which is of interest to many central banks. Here, of course, it is important to share data on cyber risks. In addition, we would like to invite our partners to conduct cross-border cyber exercises. We will discuss this at the Ural Cybersecurity Forum in February.

The third area is the development of financial technologies. We want to discuss the automation of cross-border identification systems. This topic is very practical, it will allow people to get financial services faster in another BRICS country. It is also worth discussing the use of artificial intelligence in finance. There are several other topics that are of interest to us and our partners.

The fourth is the sustainable development agenda and the adaptation of economies to climate change. The BRICS countries are very interested in this, and we want to actively promote this topic. In particular, we would like to discuss with our colleagues how to integrate climate risks into financial regulation and how to develop standards for green and adaptation bonds.

- Are you going to come up with new initiatives?

–Yes. First of all, we would like to promote the topic of mutual recognition of ratings. This is very important for mutual trade and investment. Both BRICS and the EAEU are discussing the creation of supranational rating agencies, this topic is promising, but there are a lot of complex issues – who should be the founder, how to build financing so that such an agency is independent and professional. In our opinion, mutual recognition of ratings will be faster and more practical. The second topic is related to countering the laundering of suspicious income. We have good experience in creating a Know Your Customer anti-money laundering platform, which we are ready to share. We want to see what common platform solutions in this area can be developed at the BRICS level. This would greatly simplify the cooperation between the businesses of our countries. Another area that we want to develop is building a settlement and depository infrastructure. And, finally, the fourth new area is that we plan to create a common platform for training and exchange of experience for the BRICS countries at the Bank of Russia University. We plan to form the final agenda by the end of February.

–With which countries does the Bank of Russia discuss the creation of depository bridges?

-Together with the Ministry of Finance, we are working with almost all friendly countries to build such bridges. Including the BRICS countries. This is very important for attracting foreign investment. In addition, our citizens understand that investments in the assets of unfriendly countries are becoming toxic. And if they want to diversify their portfolio, they look at the assets of friendly countries. But now it is too early to talk about the practical results of this work.

- Do you plan to develop a currency swap mechanism within BRICS?

– We have bilateral currency swaps. A similar multilateral instrument exists within the framework of BRICS – the Contingent Reserve Arrangement. It was created back in 2014, and its volume is quite impressive – $100 billion. We have been testing it annually since 2018 to keep it in constant readiness, but so far none of our countries has used it, there was no need for this. This year, we want to complete negotiations so that countries, if they experience pressure on the balance of payments, will be able to receive funds from this pool in national currencies.

–What instruments are the BRICS countries working on for settlements independent of SWIFT? Are you ready for the integration of national financial messaging systems and payment systems, following the example of the Russian Federation and Iran?

"Russia has its own Financial Messaging System, which is an alternative to SWIFT, and we propose to connect to it. And 159 foreign participants from 20 countries have already joined. Some other countries have similar infrastructure. We are discussing the interaction of such platforms, but the interest and technical readiness of our partners are important here.

- In general, are countries interested?

– Yes, because there are risks of using the established international payment infrastructure, and many countries are thinking about alternative, their own options for cross-border payment mechanisms.

- In particular, they are moving away from the dollar.

-It's all connected – the transition to national currencies and the payment infrastructure, which cannot be affected by sanctions.

- Are there any problems in the mutual settlements between the BRICS countries and Russia after the December package of US sanctions? What ways to solve them are being considered?

– Yes, there is a certain complication of cross-border settlements with many countries, because the risk of secondary sanctions has increased. But what does this lead to? In my opinion, it is just to intensify efforts to create alternative payment methods. Businesses in all countries are working on this. If a business is interested in the development of economic, trade, and investment relations, and the established system of international payments becomes risky, then it is clear that an active search for alternative opportunities begins.

- You mentioned digital currencies. Does the Bank of Russia plan to conduct pilots on cross-border payments in digital currencies whenever possible?

– Many countries are now at least thinking about the introduction of central bank digital currencies. Someone is still researching, someone has already reached the pilot stage. When creating the digital ruble platform, we laid down the possibility of its integration with similar foreign platforms. Now we are holding consultations and negotiations with many friendly countries and, of course, with the BRICS countries, on cross-border settlements through digital currencies. And I think that in the future, of course, they will develop.

–And what about cryptocurrencies?

– As for cryptocurrencies, our position is known: we are against their use in payments within the country. At the same time, we support their use in foreign trade, but the draft law that makes this possible is still being discussed in the State Duma.

- And how is the pilot on the digital ruble progressing?

- Everything is absolutely according to plan. And it is very important that we see a growing interest on the part of financial institutions to participate in this pilot.

– Is the creation of a single BRICS currency relevant now?

"This initiative arises from time to time. But, firstly, not all BRICS countries share it, and secondly, it is very complex in design and implementation. Therefore, of course, it requires a very thorough study to begin with.

- Russia is increasing the share of yuan in reserves. Do you plan to include the currencies of other BRICS countries in their structure?

- Currencies in reserves should be liquid and in demand by participants in foreign trade. If there are risks to financial stability, you should intervene in the currency that is in demand for trade and debt repayment. Therefore, until 2022, there was a significant share of dollars and euros in our reserves – it was due to the fact that foreign trade contracts were largely in dollars and euros. Now foreign economic activity is very actively switching to the use of other currencies, primarily the yuan. For example, two years ago, the share of the Chinese currency in Russia's exports was 0.4%, and according to the latest data, it was 34.5%, in imports it increased from 4.3% to 36.4%. That is, quite a big increase.

Whether we will include the currencies of other countries in the reserves can be considered in the future, if these currencies are stable enough and the share of settlements in them grows. Of course, it is necessary to take into account such factors as market liquidity, the availability of reliable and liquid instruments in these currencies.

- Are other countries interested in the ruble as a reserve currency?

"Those who actively trade with us in rubles can consider this issue. This includes the EAEU countries. The structure of any country's reserves follows economic activity.

– Has the Bank of Russia analysed the experience of BRICS in the development of finance and the economy? In turn, did the BRICS countries turn to you for experience in overcoming the crisis and fighting inflation?

"We are constantly studying international experience, including BRICS, in various aspects. Both in terms of monetary policy – and four of the five "old" BRICS countries (Brazil, India, Russia, South Africa – ed.) adhere to the policy of inflation targeting, and in terms of financial technologies – India, Brazil and China are advanced in them. For example, we are interested in the experience of the digital yuan.

Other countries are also looking at our experience in monetary policy, crisis management, and financial technologies. Therefore, in my opinion, the initiative to exchange experience on the educational platform that we will offer may be in demand and interesting.

Analysts expect that most of the BRICS countries will soon begin to ease monetary policy. Will you join the general trend?

– If you look at our baseline forecast, we see room for a rate cut this year, rather in the second half of the year. Exactly when this will happen will depend on the data coming in. We need to make sure that the downward trend in inflation is sustainable.

– Can we say that the Bank of Russia has already been able to curb inflation?

"Our monetary policy aims to rein in inflation and bring it back to our 4% target. To do this, we raised the key rate. In our opinion, the effect is already manifesting. It is manifested both in the growth of term deposits and in the slowdown in the growth rate of retail lending, which is also influenced by our macroprudential measures. We will look at the data on corporate lending, because in late December and early January, budget flows have a very strong impact on its dynamics. It often happens that in December enterprises take loans, expecting revenues from the budget, and in January they begin to repay them when the money has arrived.

We see that in December, the current rate of price growth has become lower than in November, and in January, the statistics are also encouraging. But we continue to be concerned about price expectations. For enterprises, they remain at a high level, for citizens they have decreased slightly, but still higher than in November. We will make our decisions based on the analysis of all the data.

– Is the slowdown in China's GDP growth causing concern in terms of its impact on the Russian economy?

"China has always been, and now it has become an even more important trade and economic partner for us. And, of course, the development of its economy affects Russia, not so much directly as in a global context. When we make decisions on monetary policy, we make forecasts for the global economy as a whole, and China is a large part of it; it has an impact on global demand, including energy and raw materials, of which we are a major exporter. Therefore, of course, we are monitoring the development of China's economy. But I must say that despite the problems – they exist in any country – the growth rate of the Chinese economy is quite high, more than 5% last year.

– How do you see the trajectory of the global economy now?

"There is a slowdown in the growth of the global economy. But it was still possible to avoid a "hard landing". And its probability this year has become slightly less than it was last year.

– In other words, a global recession was avoided?

–Yes. I think that many people are guided by this. Many expect key rates to be cut by leading central banks, which will support global economic growth.

– What is the share of the BRICS countries in Russia's trade balance?

"It has become much larger, now it is about 40%. In 2022, it was less than 30%, and in 2021, it was about 20%. Our trade with the BRICS countries also grew by about 15% last year, which is a significant factor in the development of our economy.

- What are the main currencies in Russia's trade with the BRICS countries?

– National currencies, including the ruble. Their share in trade with the BRICS is now about 85%. Two years ago, it was 26%.

- Is it possible to bring it to 100%?

"Eighty-five percent is a lot. Now, the question is not about the currency, but about the speed of payments and payment chains. We need to build a reliable system of settlements in national currencies, using all available elements, so that our companies do not experience difficulties with payments.

– Many BRICS countries have problems in the housing market, and, for example, in China there is a surplus of new buildings, and in India there is a deficit. What is the current situation with housing affordability in Russia, and can it be increased without massive mortgage benefits?

"What is happening and has been happening in different countries with the housing market is a very important lesson for us. If there is a boom in the housing market, then it is very likely that it can lead to a crisis. It is very important for us to avoid this, which is why we are in favour of a balanced development of mortgage lending.

You were right to talk about the affordability of housing, not so much mortgages. Because even if interest rates are low, but a person has to take out a larger amount of credit – since prices have increased as a result of massive preferential programs – this does not mean an increase in the affordability of housing. In my opinion, housing affordability is determined by several factors. First of all, household incomes should grow faster than housing prices. The efficiency of construction should be increased, and costs should be reduced. And, of course, there should be moderate interest rates on mortgages even without preferential programmes – we had them when inflation was at the target level. At that time, we began to develop mortgages quite actively precisely because of the decline in market rates.

Preferential mortgages, if they lead to an increase in housing prices, do not increase its affordability. Even if the monthly payment has not increased, the borrower's total debt burden is still growing. Because we see that the average mortgage loan terms have increased from 18 years in 2020 to 25 years. In addition, other taxpayers who do not take advantage of these benefits pay for massive benefit programs. Therefore, in my opinion, programmes should be targeted, for example, family, rural and Far Eastern mortgages. They are aimed at solving those problems that cannot be solved by market methods.

- Are you waiting for a decrease in housing prices?

- We definitely expect a significant slowdown in the growth rate of housing prices in the country as a whole, because they were very high. And if you look at the last two or three years, you can't explain them by the fact that prices have been rising at a slower rate for a while. But the picture is likely to differ from region to region, as the rise in prices in recent years has been different in different parts of the country.

At the interview’s link, there’re ten linked articles bearing on some aspect of the interview interspersed throughout its length. For example, there’s this one, “Iran said it sees no point in the WTO when there are BRICS, the SCO and the EAEU,” which is interesting when the Global Majority has effectively democratized the WTO, although the West still has some ways to block its work.

As you read, the emphasis is on expanding the mechanics of international trade settlements to avoid Western institutions that will essentially create a completely new system. The balance of payments mechanism that’s been available to use since 2014 is ready to be employed and will eventually be used by least developed nations as they enter the equation.

Russia’s cost-push inflation issues present an intricate problem to solve. On the one hand, government policy encourages rising income levels, especially at the lower end of the spectrum with the minimum wage being raised 10%. Rising incomes promote greater spending and thus demand for products, particularly foodstuffs as Russians now eat better than at any previous time it the nation’s history. Also, there remains state intervention when markets fail, one example being the last emphasized segment on housing. Russia does benefit greatly by having a very large portion of its economy organized as public utilities, plus there' remains the Soviet period’s ethos of large corporations contributing to the socio-economic sphere, including education.

One thing Russia’s Central Bank doesn’t do that all Neoliberal controlled ones engage in is loaning money for 100% speculative purposes. Russia’s Central Bank and most of its subordinates lend money directly into the economy to promote growth and the solving of social problems. A BigLie’s been circulating since Putin’s arrival that the Central Bank is a Neoliberal den of 5th and 6th columnists, when a close examination of policies and practices prove that’s not the case. The ethos in Russia’s very different from that of the West—the emphasis isn’t on creating personal wealth and power in order to dominate; rather, the emphasis is on making the nation wealthier and more powerful and the promotion of the collective whole continues to be a powerful almost universal Russian value.

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