Opening Remarks on Economic Issues

Putin held a video conference with a limited number of his team on the topic of economic issues, but we don’t get to hear any of the further discussion. Rather, we just get to read Putin’s short seven minutes of introductory remarks. Personally, I’d like to hear/read the entire discussion, particularly RCB Head Elvira Nabiullina as I’d expect her to be asked some key questions related to dedollarization. But we’ll just have to live with what we’re provided:

Vladimir Putin: Dear colleagues, good afternoon!

I propose, as we agreed, to discuss today the current state of affairs in the Russian economy, in its most important sectors and in the field of finance. In particular, I suggest paying special attention to the long-term trends that are reflected in the forecast of socio-economic development of the country until 2030. And this, I would like to emphasize, is the basis for implementing the initiatives mentioned in the Message to the Federal Assembly. We will also discuss approaches to financing the projects and programs outlined in this strategic document today.

First, I will focus on some macroeconomic indicators.

I note that the data from the beginning of the year turned out to be higher than the forecasts of the Government, the Bank of Russia, and some experts. In January – February, Russia's GDP increased by six percent in annual terms.

There is no doubt that the so-called calendar factor, namely leap years and extra working days, has also affected this issue. But even if this factor is cleaned up, removed, the dynamics are still good.

Industrial activity is growing. Industrial production in February increased by 8.5 percent, which is significantly higher than in January: then the increase was 4.6 percent.

At the same time, manufacturing industries have traditionally demonstrated higher rates, which is certainly encouraging. Their dynamics in January – plus 7.5 percent, and in February - already plus 13.5 percent.

Against this background, inflation is gradually slowing down, as well as, most importantly, inflation expectations, including the expectations of citizens, that is, their estimates and assumptions about how prices will behave in the future.

The real current state of the economy allows us to improve its development forecasts. Already, many experts say that by the end of this year, Russia's GDP may add more than three percent.

What I would like to draw your attention to is that it is not a matter of making or correcting a forecast, and then just waiting and watching what will happen in real life.

We certainly need active actions on the part of the Government and the regions, which will support and stimulate business and investment activity, help open new production facilities, including high – tech ones, create modern jobs, and meet the growing demand of the domestic market, primarily by increasing our own production of goods and services that are more competitive in comparison with the rest of the world. with foreign suppliers. In other words, it is necessary to develop and occupy its own market, to displace imports – to displace them not at the expense of administrative actions and resources, but at the expense of fair market competition.

It is precisely this expansion of our own production, the development of the domestic and national market – this is what we call the supply economy. For its development, the Message outlined concrete steps. They are designed for the next six years and are designed to ensure structural changes in the Russian economy. I am referring to strengthening the country's technological sovereignty by supporting domestic science, promising start-ups, and the widespread introduction of innovations in production.

Large-scale investments are planned to strengthen the human resources base in the industrial and social spheres, at all levels of professional education-from colleges to universities, and in close coordination with business and employers.

For the development of the regions, we will launch a large-scale program of infrastructure renewal, including energy and utility networks, and we will build new transport corridors.

A separate decision that will support regional finances will be the cancellation of two-thirds of the issued budget loans, as we agreed, as well as an increase in the volume of infrastructure budget loans. Their portfolio should add at least 250 billion rubles annually.

I would like to emphasize that these funds and additional resources should work for the stable, long-term development of our cities and villages, and reduce inequality in the socio-economic potential of the territories.

Equal opportunities should be provided for every citizen, no matter where they live. Everything is important here: the state of the so-called infrastructure of childhood – that is, kindergartens, schools, clubs, sections and recreation camps, the development of health and cultural systems, the environmental well-being of settlements and conditions for the self-realization of young people, the launch of entrepreneurial initiatives, and so on.

Much remains to be done in these and other areas over the next six years. Now the Government, together with the constituent entities of the Russian Federation, is preparing relevant national projects. They must be approved by the end of this year.

In May, at a joint meeting of the State Council and the National Projects Council, we will discuss the current results of this work and determine the main approaches to achieving the goals mentioned in the Message.

In this regard, I would like to add the following. The progressive development of our economy has a positive impact on the federal budget: its revenues are significantly higher than last year's levels.

Thus, in the first quarter, non-oil and gas revenues increased by 43 percent, and in general, federal budget revenues for three months increased by more than one and a half times compared to last year. This means that our other indicators, including the budget deficit, are also getting smaller. In this regard, we can confidently say that a solid base is being formed for the growth of budget revenues over the entire six-year horizon.

At the same time, of course, I believe that it is necessary to maintain a moderate and conservative approach to budget planning during this period and concentrate its main expenditures on those areas that give the maximum effect on the quality of life of people, the well-being of Russian families, the development of territories, regions, the social sphere, and infrastructure.

It is in this spirit that I propose today, as a first approximation, of course, to discuss the budget guidelines for the upcoming three-year period, as well as, as agreed, the long-term financial plan until 2030.

Let's start working. Please give the floor to [Minister of Economic Development] Maxim Reshetnikov. [My Emphasis]

All the dropped jaws can now resume their places. This wasn’t a propaganda sheet but the Russian government’s business plan, and as you read its plan to become what Putin has described as a “Supply Economy,” not to be confused with Reagan’s “Supply-side Economy” with its “trickle-down” outcomes. I imagine the need for secrecy is to prevent interference by the Outlaw US Empire, particularly in the area of creative investment tools of the sort discussed during the Business and Entrepreneurs Congress. The Address and Message is Putin’s speech to the Federal Assembly delivered on Leap Day. GDP performance Putin is lowballing along with the “experts.” But given the level of investment planned along with that already in-play plus the gung-ho on-fire performances of many of Russia’s economic sectors, I predict at least 5% or more GDP gain this year. What’s more important from Putin’s perspective is an even greater gain of real incomes along with the continuing reduction of poverty and unemployment in what have traditionally been regions seemingly impervious to greater positive change for whatever reason. Putin also talks of the need to equalize the economic performance of all 89 regions, which is going to be the hardest task of all as European Russia has a big advantage as it remains in many respects the core of Russia’s Metropolis. China faces a similar challenge in raising the countryside’s equity versus the main production centers.

I’m sure readers did a doubletake with this: “A separate decision that will support regional finances will be the cancellation of two-thirds of the issued budget loans.” Those loans are owed to the government mostly by the regions, so they’re very easy to cancel while also providing the regions with extra budget monies since their debt’s been eliminated. Dr. Hudson will smile when he reads that. In relation to that, Putin said budget revenues are rapidly climbing and not because of rising hydrocarbon prices but through sales of all other products, meaning Russia has no fears of budget deficits for the foreseeable future. Inflation also seems to becoming a tamed entity, meaning the RCB can begin to lower its key rate from 16% which will also provide further economic stimulus. It was very clear that Russian business wants to invest and expand. As I’ve mentioned before, it sure would be nice to buy some Russian bonds, but I’d need to hide them from my government.

And then we get to the expansion of the Global Majority’s economy with a focus on BRICS+. Pepe Escobar provides an update on that area, “BRIC-o-rama: on the road in Brazil, with an eye on Russia-China,” but beyond what he reports are what we can anticipate happening over the next few years before 2030 arrives. Commercial dynamics between not just BRICS+ but with many other nations are on an upswing that will continue to rise with the addition of investment once the dollar system is overhauled. It’s very possible all of ASEAN will enter BRICS+ as a group instead of individuals to be followed at some point by the African Union. IMO, the addition of individual states to BRICS+ no longer makes any sense when all want in. Such a combination will also make it possible to eventually reform the UN by excluding those still wanting to break International Law. What this means for Russia over the next 5+ years is a vastly increasing international commerce allowing it to erect the proper overseas facilities to make that possible and more.

The end of the Age of Plunder is becoming a bonanza for Humanity. Hopefully it will continue in that direction.

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