After the Second World War, modern international law was established with the idea of countering "war propaganda" United Nations General Assembly Resolution 110 of November 3, 1947 and Resolution 381 of November 17, 1950 “Condemnation of propaganda against peace”. International legislators, i.e. sovereign states, soon agreed that war could only be fought against by ensuring the "free flow of ideas" resolution 819 of 11 December 1954 “Strengthening of peace through the removal of barriers to free exchange of ideas".
In recent years, however, we have witnessed an extraordinary backsliding that deprives us of the thoughts of others, exposes us to war propaganda, and ultimately leads us to a global conflict.
This phenomenon began with the private censorship on social networks of the incumbent president of the United States, and continued with the public censorship of Russian media in the West. Now the thoughts of others are no longer seen as a tool to prevent wars, but as a poison that threatens us.
Western states are setting up bodies to "rectify" information that they consider falsified (Fake News)“The West renounces freedom of expression”, by Thierry Meyssan. NATO is considering the creation of a unit, called Information Ramstein, which will be responsible for censoring not Russian information sources, but Russian ideas within the 30 member states of the Atlantic Alliance "A ’Ministry of Truth’ soon to be created within NATO".
This is a complete reversal of the values of the Atlantic Alliance, which was founded in the wake of the Atlantic Charter, which incorporated President Franklin Roosevelt’s "four freedoms". The first of these freedoms was the freedom of expression.
However, before the invention of the Internet, when the United States and the Soviet Union had just guaranteed the "free circulation of ideas" with the Helsinki Agreements, the United Nations and more particularly its agency in this field, UNESCO, were worried about "information imperialism". The technical superiority of the West allowed them to impose their view of the facts on developing countries.
In 1976, during the Nairobi conference, the UN raised the question of the functioning of the media with regard to "the strengthening of peace and international understanding, the promotion of human rights and the fight against racism, apartheid and incitement to war.
Former Irish Foreign Minister and Nobel Peace Prize winner Seán MacBride formed a 16-member commission at Unesco. It included the Frenchman Hubert Beuve-Mery (founder of Le Monde), the Colombian Gabriel García Márquez (Nobel Prize for Literature) and the Canadian Marshall McLuhan (communication theorist). The United States was represented by Elie Abel, then dean of the Columbia University School of Journalism, and Russia by the director of the Tass agency, Sergei Losev. Only the fifth and final part of the report (Communication Tomorrow) was the subject of a general debate. The MacBride commission discussed the draft of the other parts, but could not question their final wording. In any event, its report, issued in 1978, seemed to be a consensus.
In fact, by pointing out that the same facts can be perceived differently and by opening up the question of the means of the media of the North and those of the South, he was opening a Pandora’s box. At the same time, Unesco was confronted with the propaganda of the South African apartheid regime and the propaganda of Israel, which denies Muslim and Christian cultures. In the end, the United States and the United Kingdom ended the debate by withdrawing from Unesco. We know today that the British Empire had ensured its intellectual domination by creating news agencies. Whitehall closed the Information Research Department (IRD) just before the MacBride report was published "Britain’s secret propaganda war, Paul Lashmar & James Oliver, Sutton". But the war against Syria has shown that the whole system has been reconstituted in another form “The fabrication of the myth of the "Syrian revolution" by the United States. Westerners continue to falsify information at its source.
In forty years, the media landscape has been transformed: the emergence of international television news channels, websites and social networks. At the same time, there has been a huge concentration of media in the hands of a few owners. However, none of the problems listed in 1978 have changed. On the contrary, with the unipolar world, they have become worse.
The journalistic profession today consists of either writing agency reports or contextualizing the news for the media. News agencies are factual and unsourced, while the media offer commentary and analysis by referring to news agencies. Contextualization requires a great deal of historical, economic and other knowledge, which today’s journalists are largely lacking. The immediacy of radio and television does not give them the time to read books and even less to consult archives, except during in-depth investigations. Commentary and analysis have thus become considerably impoverished.
The dominant ideology in the West, which tends to become "global", has become a religion without God. There are now only two camps: that of the Good and that of the apostates. Truth is determined by a consensus among the elites, while the people reject it. Any criticism is considered blasphemous. There is no more room for debate and therefore for democracy.
The alternative press has become just as poor because it relies on the same data as the international media: news agency reports. It is indeed enough to control AFP, AP and Reuters to impose a vision of the facts on us. You can season it according to this or that tendency, Republican or Democrat, conservative or progressive, etc., but it will always be the same dish.
Since the September 11 attacks, those who challenge the official version of events have been called "conspiracy theorists ». Since the election of Donald Trump, those who contest the data of press agencies are accused of distorting reality and imagining Fake News. Journalists, after refraining from relaying the thoughts of "conspiracists", i.e. dissidents, try to correct Fake News with Checked News.
Yet, at the same time, belief in the versions of the mainstream media has collapsed. In the United States, the Gallup Institute has been measuring trust in the print media since 1973 and in the broadcast media since 1993. Trust in newspapers has fallen from 51 percent to 16 percent, and trust in radio and television has fallen from 46 percent to 11 percent.
The only solution is to increase the number of news agencies, i.e. the sources of information. Not to make them numerous, but diverse. Only then will we realize that the way an event is reported determines the way we think about it.
For example, today the three news agencies mentioned above present the conflict in Ukraine as a "Russian invasion". They claim that Moscow has not been able to take Kiev and overthrow President Zelenky, but commits war crimes every day. This is one way of looking at it. We don’t have the means to publish dispatches all the time, but we publish a weekly identical bulletin. Our criterion is different. We refer to "International Law" and not to Western "rules". Therefore, we describe the same conflict as the application of the Security Council resolution 2202 and the "responsibility to protect" the oppressed populations since 2014. The events are the same, but for some the way they tell them leads to think that the Russians are wrong, while ours leads to think that the Russian position is legal. To tell the truth, there is another difference: we interpret the facts over time. For us and for the Security Council, there has been a civil war in Ukraine for eight years with 20,000 deaths, the three major agencies pretend to ignore it. For us, the "integral nationalists" have a long criminal history, having cost the lives of 4 million of their fellow citizens, the Western agencies also pretend to ignore it “Who are the Ukrainian integral nationalists?”.
This difference can be applied to all subjects. For example, the major news agencies tell us that the West has imposed sanctions to punish Russia for invading Ukraine. We do not read events in this way. Once again, referring to "International Law" and not to Western "rules", we note that the decisions of the Anglo-Saxons and the European Union violate the UN Charter. These are not "sanctions", since there has been no judgment, but economic weapons to wage war against Russia, just as castles were besieged in the past to starve those who had taken refuge there.
Each difference in the interpretation of events provokes another. For example, when we point out that the Western pseudo-sanctions have not been endorsed by the Security Council, we are told that this is quite normal since Russia has a veto right in the Council. This is to forget why the UN was organized the way it was. Its purpose is not to say what is right, but to prevent wars. This is precisely what allowed the Council to adopt resolution 2202 to resolve the civil war in Ukraine. However, the West, despite the commitment of Germany and France, did not apply it, forcing Russia to intervene.
We could go on endlessly with this double reading. The important thing to remember is that the presentation of the facts radically changes the way they are perceived. To conclude, I invite you to found news agencies that describe the facts in their own way and not in the way of our leaders. It is in this way and not by glossing over biased information that we will regain our lucidity.
The heads of state and government present at the Minsk II Agreement.
For the past seven years, it has been the responsibility of the guarantor powers of the Minsk II Agreement (Germany, France, Ukraine and Russia) to enforce it. They had been endorsed and legalized by the United Nations Security Council on February 17, 2015. But none of these states have done so, despite the rhetoric about the need to protect citizens threatened by their own governments.
While there was talk of possible Russian military intervention, on January 31, 2022, the Secretary of the Ukrainian National Security and Defense Council, Oleksiy Danilov, defied Germany, France, Russia and the UN Security Council by stating, "Compliance with the Minsk agreements means the destruction of the country. When they were signed under the armed threat of the Russians - and under the eyes of the Germans and the French - it was already clear to all rational people that it was impossible to implement these documents" [(#nb1 ""Ukraine security chief: Minsk peace deal may create chaos, Yuras Karmanau, (...)")].
When, after seven years, the number of Ukrainians killed by the Kiev government amounted to more than 12,000 according to the Kiev government and more than 20,000 according to the Russian Investigative Committee, only then did Moscow launch a "special military operation" against the Ukrainian "integral nationalists" (as they claim), who were described as "neo-Nazis".
Russia declared from the start of its operation that it would stick to rescuing the populations and “denazifying” Ukraine, not occupying it. Yet the West accused it of trying to take Kiev, overthrow President Zelensky and annex Ukraine, which they obviously never did. It was only after the execution of one of the Ukrainian negotiators, Denis Kireev, by his own country’s security services (SBU) and the suspension of talks by President Volodymyr Zelensky that his Russian counterpart, Vladimir Putin, announced that he was toughening his demands. From now on, the Federation claims Novorussia, that is to say all of southern Ukraine, historically Russian since Tsarina Catherine II, with the exception of thirty-three years.
It should be understood that if Russia did nothing for seven years, it was not because it was insensitive to the massacre of the Russian-speaking population of Donbass, but because it was preparing to face the predictable Western response. According to the classic quotation of the Minister of Foreign Affairs of Tsar Alexander II, Prince Alexander Gortchakov: "The Emperor is determined to devote, preferably, his solicitude to the well-being of his subjects and to concentrate, on the development of the internal resources of the country, an activity which would be poured outside only when the positive interests of Russia would require it absolutely. Russia is reproached for isolating itself and keeping silent in the presence of facts that are not in accordance with either law or equity. Russia is said to be sulking. Russia is not sulking. Russia is taking stock".
This police operation was called "aggression" by the West. One thing leading to another, Russia was portrayed as a "dictatorship" and its foreign policy as "imperialism". No one seems to have read the Minsk II Agreement, which was endorsed by the UN Security Council. In a telephone conversation between Presidents Putin and Macron, revealed by the Élysée Palace, the latter even expressed his lack of interest in the fate of the population of Donbass, i.e. his contempt for the Minsk II Agreement.
Today, the Western secret services are coming to the aid of the Ukrainian "integral nationalists" (the "neo-Nazis" in Russian terminology) and, instead of seeking a peaceful solution, are trying to destroy Russia from within .
In international law, Moscow has only implemented the 2015 Security Council resolution. It can be blamed for its brutality, but neither for rushing (seven years), nor for being illegitimate (resolution 2202). Presidents Petro Poroshenko, Francois Hollande, Vladimir Putin and Chancellor Angela Merkel had pledged, in a joint statement attached to the resolution, to do the same. If any of these powers had intervened earlier, they could have chosen other modalities of operation, but none did.
Plenary session moderator Margarita Simonyan: Good afternoon, or almost evening.
As you may know, we had a minor technical issue. Thankfully, it has been dealt with quickly. We are grateful to those who resolved this.
We are also grateful to the audience.
We are grateful to our leader, President Vladimir Putin, for traditionally fitting this forum into his schedule so that he can tell us about economic prospects and other plans.
We are grateful to President Kassym-Jomart Tokayev for attending our forum. We know that it is not an easy thing to do. Thank you for supporting our forum and our country. We really appreciate this.
We will have a lot of questions today. You may not like some of them, and I may not be happy to ask some of them. We would be much happier to speak only about good things, but this is impossible today.
Mr President, I would like to ask you to take the stand and to tell us what lies in store for us all. Thank you.
President of Russia Vladimir Putin: Thank you very much. President Tokayev, friends and colleagues,
I welcome all participants and guests of the 25th St Petersburg International Economic Forum.
It is taking place at a difficult time for the international community when the economy, markets and the very principles of the global economic system have taken a blow. Many trade, industrial and logistics chains, which were dislocated by the pandemic, have been subjected to new tests. Moreover, such fundamental business notions as business reputation, the inviolability of property and trust in global currencies have been seriously damaged. Regrettably, they have been undermined by our Western partners, who have done this deliberately, for the sake of their ambitions and in order to preserve obsolete geopolitical illusions.
Today, our – when I say “our,” I mean the Russian leadership – our own view of the global economic situation. I would like to speak in greater depth about the actions Russia is taking in these conditions and how it plans to develop in these dynamically changing circumstances.
When I spoke at the Davos Forum a year and a half ago, I also stressed that the era of a unipolar world order has come to an end. I want to start with this, as there is no way around it. This era has ended despite all the attempts to maintain and preserve it at all costs. Change is a natural process of history, as it is difficult to reconcile the diversity of civilisations and the richness of cultures on the planet with political, economic or other stereotypes – these do not work here, they are imposed by one centre in a rough and no-compromise manner.
The flaw is in the concept itself, as the concept says there is one, albeit strong, power with a limited circle of close allies, or, as they say, countries with granted access, and all business practices and international relations, when it is convenient, are interpreted solely in the interests of this power. They essentially work in one direction in a zero-sum game. A world built on a doctrine of this kind is definitely unstable.
After declaring victory in the Cold War, the United States proclaimed itself to be God’s messenger on Earth, without any obligations and only interests which were declared sacred. They seem to ignore the fact that in the past decades, new powerful and increasingly assertive centres have been formed. Each of them develops its own political system and public institutions according to its own model of economic growth and, naturally, has the right to protect them and to secure national sovereignty.
These are objective processes and genuinely revolutionary tectonic shifts in geopolitics, the global economy and technology, in the entire system of international relations, where the role of dynamic and potentially strong countries and regions is substantially growing. It is no longer possible to ignore their interests.
To reiterate, these changes are fundamental, groundbreaking and rigorous. It would be a mistake to assume that at a time of turbulent change, one can simply sit it out or wait it out until everything gets back on track and becomes what it was before. It will not.
However, the ruling elite of some Western states seem to be harbouring this kind of illusions. They refuse to notice obvious things, stubbornly clinging to the shadows of the past. For example, they seem to believe that the dominance of the West in global politics and the economy is an unchanging, eternal value. Nothing lasts forever.
Our colleagues are not just denying reality. More than that; they are trying to reverse the course of history. They seem to think in terms of the past century. They are still influenced by their own misconceptions about countries outside the so-called “golden billion”: they consider everything a backwater, or their backyard. They still treat them like colonies, and the people living there, like second-class people, because they consider themselves exceptional. If they are exceptional, that means everyone else is second rate.
Thereby, the irrepressible urge to punish, to economically crush anyone who does not fit with the mainstream, does not want to blindly obey. Moreover, they crudely and shamelessly impose their ethics, their views on culture and ideas about history, sometimes questioning the sovereignty and integrity of states, and threatening their very existence. Suffice it to recall what happened in Yugoslavia, Syria, Libya and Iraq.
If some “rebel” state cannot be suppressed or pacified, they try to isolate that state, or “cancel” it, to use their modern term. Everything goes, even sports, the Olympics, bans on culture and art masterpieces just because their creators come from the “wrong” country.
This is the nature of the current round of Russophobia in the West, and the insane sanctions against Russia. They are crazy and, I would say, thoughtless. They are unprecedented in the number of them or the pace the West churns them out at.
The idea was clear as day – they expected to suddenly and violently crush the Russian economy, to hit Russia’s industry, finance, and people's living standards by destroying business chains, forcibly recalling Western companies from the Russian market, and freezing Russian assets.
This did not work. Obviously, it did not work out; it did not happen. Russian entrepreneurs and authorities have acted in a collected and professional manner, and Russians have shown solidarity and responsibility.
Step by step, we will normalise the economic situation. We have stabilised the financial markets, the banking system and the trade network. Now we are busy saturating the economy with liquidity and working capital to maintain the stable operation of enterprises and companies, employment and jobs.
The dire forecasts for the prospects of the Russian economy, which were made in early spring, have not materialised. It is clear why this propaganda campaign was fuelled and all the predictions of the dollar at 200 rubles and the collapse of our economy were made. This was and remains an instrument in an information struggle and a factor of psychological influence on Russian society and domestic business circles.
Incidentally, some of our analysts gave in to this external pressure and based their forecasts on the inevitable collapse of the Russian economy and a critical weakening of the national currency – the ruble.
Real life has belied these predictions. However, I would like to emphasise that to continue being successful, we must be explicitly honest and realistic in assessing the situation, be independent in reaching conclusions, and of course, have a can-do spirit, which is very important. We are strong people and can deal with any challenge. Like our predecessors, we can resolve any task. The entire thousand-year history of our country bears this out.
Within just three months of the massive package of sanctions, we have suppressed inflation rate spikes. As you know, after peaking at 17.8 percent, inflation now stands at 16.7 percent and continues dropping. This economic dynamic is being stabilised, and state finances are now sustainable. I will compare this to other regions further on. Yes, even this figure is too much for us – 16.7 percent is high inflation. We must and will work on this and, I am sure, we will achieve a positive result.
After the first five months of this year, the federal budget has a surplus of 1.5 trillion rubles and the consolidated budget – a surplus of 3.3 trillion rubles. In May alone, the federal budget surplus reached almost half a trillion rubles, surpassing the figure for May 2021 more than four times over.
Today, our job us to create conditions for building up production and increasing supply in the domestic market, as well as restoring demand and bank financing in the economy commensurately with the growth in supply.
I mentioned that we have taken measures to reestablish the floating assets of companies. In most sectors, businesses have received the right to suspend insurance premiums for the second quarter of the year. Industrial companies have even more opportunities – they will be able to delay them through the third quarter as well. In effect, this is like getting an interest-free loan from the state.
In the future, companies will not have to pay delayed insurance premiums in a single payment. They will be able to pay them in equal installments over 12 months, starting in June next year.
Next. As of May the subsidised mortgage rate has been reduced. It is now 9 percent, while the programme has been extended till the end of the year. As I have mentioned, the programme is aimed at helping Russians improve their housing situation, while supporting the home building industry and related industries that employ millions of people.
Following a spike this spring, interest rates have been gradually coming down, as the Central Bank lowers the key rate. I believe that that this allows the subsidised mortgage rate to be further cut to 7 percent.
What is important here? The programme will last until the end of the year without change. It means that our fellow Russians seeking to improve their living conditions should take advantage of the subsidy before the end of the year.
The lending cap will not change either, at 12 million roubles for Moscow and St Petersburg and 6 million for the rest of Russia.
I should add that we must make long-term loans for businesses more accessible. The focus must shift from budget subsidies for businesses to bank lending as a means to spur business activity.
We need to support this. We will allocate 120 billion rubles from the National Wealth Fund to build up the capacity of the VEB Project Financing Factory. This will provide for additional lending to much-needed initiatives and projects worth around half a trillion roubles.
Once again, the economic blitzkrieg against Russia was doomed to fail from the beginning. Sanctions as a weapon have proved in recent years to be a double-edged sword damaging their advocates and architects just a much, if not more.
I am not talking about the repercussions we see clearly today. We know that European leaders informally, so to say, furtively, discuss the very concerning possibility of sanctions being levelled not at Russia, but at any undesirable nation, and ultimately anyone including the EU and European companies.
So far this is not the case, but European politicians have already dealt their economies a serious blow all by themselves. We see social and economic problems worsening in Europe, and in the US as well, food, electricity and fuel prices rising, with quality of life in Europe falling and companies losing their market edge.
According to experts, the EU’s direct, calculable losses from the sanctions fever could exceed $400 billion this year. This is the price of the decisions that are far removed from reality and contradict common sense.
These outlays fall directly on the shoulders of people and companies in the EU. The inflation rate in some Eurozone countries has exceeded 20 percent. I mentioned inflation in Russia, but the Eurozone countries are not conducting special military operations, yet the inflation rate in some of them has reached 20 percent. Inflation in the United States is also unacceptable, the highest in the past 40 years.
Of course, inflation in Russia is also in the double digits so far. However, we have adjusted social benefits and pensions to inflation, and increased the minimum and subsistence wages, thereby protecting the most vulnerable groups of the population. At the same time, high interest rates have helped people keep their savings in the Russian banking system.
Businesspeople know, of course, that a high key rate clearly slows economic development. But it is a boon for the people in most cases. They have reinvested a substantial amount of money in banks due to higher interest rates.
This is our main difference from the EU countries, where rising inflation is directly reducing the real incomes of the people and eating up their savings, and the current manifestations of the crisis are affecting, above all, low-income groups.
The growing outlays of European companies and the loss of the Russian market will have lasting negative effects. The obvious result of this will be the loss of global competitiveness and a system-wide decline in the European economies’ pace of growth for years to come.
Taken together, this will aggravate the deep-seated problems of European societies. Yes, we have many problems as well, yet I have to speak about Europe now because they are pointing the finger at us although they have enough of their own problems. I mentioned this at Davos. A direct result of the European politicians’ actions and events this year will be the further growth of inequality in these countries, which will, in turn, split their societies still more, and the point at issue is not only the well-being but also the value orientation of various groups in these societies.
Indeed, these differences are being suppressed and swept under the rug. Frankly, the democratic procedures and elections in Europe and the forces that come to power look like a front, because almost identical political parties come and go, while deep down things remain the same. The real interests of people and national businesses are being pushed further and further to the periphery.
Such a disconnect from reality and the demands of society will inevitably lead to a surge in populism and extremist and radical movements, major socioeconomic changes, degradation and a change of elites in the short term. As you can see, traditional parties lose all the time. New entities are coming to the surface, but they have little chance for survival if they are not much different from the existing ones.
The attempts to keep up appearances and the talk about allegedly acceptable costs in the name of pseudo-unity cannot hide the main thing: the European Union has lost its political sovereignty, and its bureaucratic elites are dancing to someone else’s tune, doing everything they are told from on high and hurting their own people, economies, and businesses.
There are other critically important matters here. The worsening of the global economic situation is not a recent development. I will now go over things that I believe are extremely important. What is happening now does not stem from what happened during recent months, of course not. Moreover, it is not the result of the special military operation carried out by Russia in Donbass. Saying so is an unconcealed, deliberate distortion of the facts.
Surging inflation in product and commodity markets had become a fact of life long before the events of this year. The world has been driven into this situation, little by little, by many years of irresponsible macroeconomic policies pursued by the G7 countries, including uncontrolled emission and accumulation of unsecured debt. These processes intensified with the onset of the coronavirus pandemic in 2020, when supply and demand for goods and services drastically fell on a global scale.
This begs the question: what does our military operation in Donbass have to do with this? Nothing whatsoever.
Because they could not or would not devise any other recipes, the governments of the leading Western economies simply accelerated their money-printing machines. Such a simple way to make up for unprecedented budget deficits.
I have already cited this figure: over the past two years, the money supply in the United States has grown by more than 38 percent. Previously, a similar rise took decades, but now it grew by 38 percent or 5.9 trillion dollars in two years. By comparison, only a few countries have a bigger gross domestic product.
The EU's money supply has also increased dramatically over this period. It grew by about 20 percent, or 2.5 trillion euros.
Lately, I have been hearing more and more about the so-called – please excuse me, I really would not like to do this here, even mention my own name in this regard, but I cannot help it – we all hear about the so-called ‘Putin inflation’ in the West. When I see this, I wonder who they expect would buy this nonsense – people who cannot read or write, maybe. Anyone literate enough to read would understand what is actually happening.
Russia, our actions to liberate Donbass have absolutely nothing to do with this. The rising prices, accelerating inflation, shortages of food and fuel, petrol, and problems in the energy sector are the result of system-wide errors the current US administration and European bureaucracy have made in their economic policies. That is where the reasons are, and only there.
I will mention our operation, too: yes, it could have contributed to the trend, but the root cause is precisely this – their erroneous economic policies. In fact, the operation we launched in Donbass is a lifeline they are grabbing at to be able to blame their own miscalculations on others, in this case, on Russia. But everyone who has at least completed primary school would understand the true reasons for today's situation.
So, they printed more money, and then what? Where did all that money go? It was obviously used to pay for goods and services outside Western countries – this is where the newly-printed money flowed. They literally began to clean out, to wipe out global markets. Naturally, no one thought about the interests of other states, including the poorest ones. They were left with scraps, as they say, and even that at exorbitant prices.
While at the end of 2019, imports of goods to the United States amounted to about 250 billion dollars a month, by now, it has grown to 350 billion. It is noteworthy that the growth was 40 percent – exactly in proportion to the unsecured money supply printed in recent years. They printed and distributed money, and used it to wipe out goods from third countries’ markets.
This is what I would like to add. For a long time, the United States was a big food supplier in the world market. It was proud, and with good reason, of its achievements, its agriculture and farming traditions. By the way, this is an example for many of us, too. But today, America’s role has changed drastically. It has turned from a net exporter of food into a net importer. Loosely speaking, it is printing money and pulling commodity flows its way, buying food products all over the world.
The European Union is building up imports even faster. Obviously, such a sharp increase in demand that is not covered by the supply of goods has triggered a wave of shortages and global inflation. This is where this global inflation originates. In the past couple of years, practically everything – raw materials, consumer goods and particularly food products – has become more expensive all over the world.
Yes, of course, these countries, including the United States continue importing goods, but the balance between exports and imports has been reversed. I believe imports exceed exports by some 17 billion. This is the whole problem.
According to the UN, in February 2022, the food price index was 50 percent higher than in May 2020, while the composite raw materials index has doubled over this period.
Under the cloud of inflation, many developing nations are asking a good question: why exchange goods for dollars and euros that are losing value right before our eyes? The conclusion suggests itself: the economy of mythical entities is inevitably being replaced by the economy of real values and assets.
According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. I think this has become a very real threat for many countries that keep their gold and foreign exchange reserves in these currencies.
According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation.
As for Europe, their failed energy policy, blindly staking everything on renewables and spot supplies of natural gas, which have caused energy price increases since the third quarter of last year – again, long before the operation in Donbass – have also exacerbated price hikes. We have absolutely nothing to do with this. It was due to their own actions that prices have gone through the roof, and now they are once again looking for somebody to blame.
Not only did the West’s miscalculations affect the net cost of goods and services but they also resulted in decreased fertiliser production, mainly nitrogen fertilisers made from natural gas. Overall, global fertiliser prices have jumped by over 70 percent from mid-2021 through February 2022.
Unfortunately, there are currently no conditions that can overcome these pricing trends. On the contrary, aggravated by obstacles to the operation of Russian and Belarusian fertiliser producers and disrupted supply logistics, this situation is approaching a deadlock.
It is not difficult to foresee coming developments. A shortage of fertiliser means a lower harvest and a higher risk of an undersupplied global food market. Prices will go even higher, which could lead to hunger in the poorest countries. And it will be fully on the conscience of the US administration and the European bureaucracy.
I want to emphasise once again: this problem did not arise today or in the past three or four months. And certainly, it is not Russia’s fault as some demagogues try to declare, shifting the responsibility for the current state of affairs in the world economy to our country.
Maybe it would even be nice to hear that we are so powerful and omnipotent that we can blow up inflation in the West, in the United States and Europe, or that we can do things to throw everything into disorder. Maybe it would be nice to feel this power, if only there were truth in it. This situation has been brewing for years, spurred by the short-sighted actions of those who are used to solving their problems at somebody else’s expense and who have relied and still rely on the mechanism of financial emission to outbid and draw trade flows, thus escalating deficits and provoking humanitarian disasters in certain regions of the world. I will add that this is essentially the same predatory colonial policy as in the past, but of course in a new iteration, a more subtle and sophisticated edition. You might not even recognise it at first.
The current priority of the international community is to increase food deliveries to the global market, notably, to satisfy the requirements of the countries that need food most of all.
While ensuring its domestic food security and supplying the domestic market, Russia is also able to scale up its food and fertiliser exports. For example, our grain exports in the next season can be increased to 50 million tonnes.
As a priority, we will supply the countries that need food most of all, where the number of starving people could increase, first of all, African countries and the Middle East.
At the same time, there will be problems there, and not through our fault either. Yes, on paper Russian grain, food and fertilisers… Incidentally, the Americans have adopted sanctions on our fertilisers, and the Europeans followed suit. Later, the Americans lifted them because they saw what this could lead to. But the Europeans have not backed off. Their bureaucracy is as slow as a flour mill in the 18th century. In other words, everyone knows that they have done a stupid thing, but they find it difficult to retrace their steps for bureaucratic reasons.
As I have said, Russia is ready to contribute to balancing global markets of agricultural products, and we see that our UN colleagues, who are aware of the scale of the global food problem, are ready for dialogue. We could talk about creating normal logistical, financial and transport conditions for increasing Russian food and fertiliser exports.
As for Ukrainian food supplies to global markets – I have to mention this because of numerous speculations – we are not hindering them. They can do it. We did not mine the Black Sea ports of Ukraine. They can clear the mines and resume food exports. We will ensure the safe navigation of civilian vessels. No problem.
But what are we talking about? According to the US Department of Agriculture, the matter concerns 6 million tonnes of wheat (we estimate it at 5 million tonnes) and 7 million tonnes of maize. This is it, altogether. Since global production of wheat stands at 800 million tonnes, 5 million tonnes make little difference for the global market, as you can see.
Anyway, Ukrainian grain can be exported, and not only via Black Sea ports. Another route is via Belarus, which is, incidentally, the cheapest way. Or via Poland or Romania, whichever you prefer. In fact, there are five or six export routes.
The problem is not with us, the problem is with the adequacy of the people in control in Kiev. They can decide what to do, and, at least in this particular case, they should not take their lead from their foreign bosses, their masters across the ocean.
But there is also the risk that grain will be used as payment for arms deliveries. This would be regrettable.
Once again, the world is going through an era of drastic change. International institutions are breaking down and faltering. Security guarantees are being devalued. The West has made a point of refusing to honour its earlier commitments. It has simply been impossible to reach any new agreements with them.
Given these circumstances and against the backdrop of mounting risks and threats, Russia was forced to go ahead with the special military operation. It was a difficult but necessary decision, and we were forced to make it.
This was the decision of a sovereign country, which has еру unconditional right to uphold its security, which is based on the UN Charter. This decision was aimed at protecting our people and the residents of the people's republics of Donbass who for eight long years were subjected to genocide by the Kiev regime and the neo-Nazis who enjoyed the full protection of the West.
The West not only sought to implement an “anti-Russia” scenario, but also engaged in the active military development of Ukrainian territory, flooding Ukraine with weapons and military advisers. And it continues to do so now. Frankly, no one is paying any attention to the economy or well-being of the people living there, they just do not care about it at all, but they have never spared money to create a NATO foothold in the east that is directed against Russia and to cultivate aggression, hatred and Russophobia.
Today, our soldiers and officers, as well as the Donbass militia, are fighting to protect their people. They are fighting for Russia's future as a large, free and secure multiethnic country that makes its own decisions, determines its own future, relies on its history, culture and traditions, and rejects any and all outside attempts to impose pseudo-values steeped in dehumanisation and moral degradation.
No doubt, our special military operation goals will be fulfilled. The key to this is the courage and heroism of our soldiers, consolidated Russian society, whose support gives strength and confidence to the Russian Army and Navy and a deep understanding of the truth and historical justice of our cause which is to build and strengthen Russia as a strong sovereign power.
My point is that sovereignty cannot be segmented or fragmented in the 21st century. The components of sovereignty are equally important, and they reinvigorate and complement each other.
So, what matters to us is not only the defence of our political sovereignty and national identity, but also strengthening everything that determines our country’s economic, financial, professional and technological independence.
The very structure of Western sanctions rested on the false premise that economically Russia is not sovereign and is critically vulnerable. They got so carried away spreading the myth of Russia’s backwardness and its weak positions in the global economy and trade that apparently, they started believing it themselves.
While planning their economic blitzkrieg, they did not notice, simply ignored the real facts of how much our country had changed in the past few years.
These changes are the result of our planned efforts to create a sustainable macroeconomic structure, ensure food security, implement import substitution programmes and create our own payment system, to name a few.
Of course, sanction restrictions created many challenges for the country. Some companies continue having problems with spare parts. Our companies have lost access to many technological solutions. Logistics are in disarray.
But, on the other hand, all this opens up new opportunities for us – we often talk about this but it really is so. All this is an impetus to build an economy with full rather than partial technological, production, human and scientific potential and sovereignty.
Naturally, it is impossible to resolve such a comprehensive challenge instantly. It is necessary to continue working systematically with an eye to the future. This is exactly what Russia is doing by implementing its long-term plans for the development of branches of the economy and strengthening the social sphere. The current trials are merely resulting in adjustments and modifications of the plans without changing their strategic orientation.
Today, I would like to talk about the key principles on which our country, our economy will develop.
The first principle is openness. Genuinely sovereign states are always interested in equal partnership and in contributing to global development. On the contrary, weak and dependent countries are usually looking for enemies, fuelling xenophobia or losing the last remnants of their identity and independence, blindly following in the wake of their suzerain.
Russia will never follow the road of self-isolation and autarky although our so-called Western friends are literally dreaming about this. Moreover, we are expanding cooperation with all those who are interested in it, who want to work with us, and will continue to do so. There are many of them. I will not list them at this point. They make up the overwhelming majority of people on Earth. I will not list all these countries now. It is common knowledge.
I will say nothing new when I remind you that everyone who wants to continue working or is working with Russia is subjected to blatant pressure from the United States and Europe; it goes as far as direct threats. However, this kind of blackmail means little when it comes to countries headed by true leaders who know the difference between their own national interests, the interests of their people – and someone else’s.
Russia will build up economic cooperation with these states and promote joint projects. At the same time, we will certainly continue to cooperate with Western companies that have remained in the Russian market despite the unprecedented arm-twisting – such companies exist, too.
We believe the development of a convenient and independent payment infrastructure in national currencies is a solid and predictable basis for deepening international cooperation. To help companies from other countries develop logistical and cooperation ties, we are working to improve transport corridors, increase the capacity of railways, transshipment capacity at ports in the Arctic, and in the eastern, southern and other parts of the country, including in the Azov-Black Sea and Caspian basins – they will become the most important section of the North-South Corridor, which will provide stable connectivity with the Middle East and Southern Asia. We expect freight traffic along this route to begin growing steadily in the near future.
But foreign trade is not our only priority. Russia intends to increase scientific, technological, cultural, humanitarian and sports cooperation based on equality and mutual respect between partners. At the same time, our country will strive for responsible leadership in all these areas.
The second principle of our long-term development is a reliance on entrepreneurial freedom. Every private initiative aimed at benefiting Russia should receive maximum support and space for implementation.
The pandemic and the more recent events have confirmed how important flexibility and freedom are in the economy. Russian private businesses – in tough conditions, amid attempts to restrain our development by any means – have proved they can compete in global markets. Private businesses should also be credited for Russia’s adaptation to rapidly changing external conditions. Russia needs to ensure the dynamic development of the economy – naturally, relying on private business.
We will continue to reduce administrative hurdles. For example, in 2016–2018, we imposed a moratorium on routine audits of small businesses. Subsequently, it was extended through 2022. In 2020, this moratorium was extended to cover mid-sized companies. Also, the number of unscheduled audits decreased approximately fourfold.
We did not stop at that, and last March, we cancelled routine audits for all entrepreneurs, regardless of the size of their businesses, provided their activities do not put people or the environment at high risk. As a result, the number of routine audits has declined sixfold compared to last year.
Why am I giving so many details? The point is that after the moratorium on audits was imposed, the number of violations by entrepreneurs – this was the result – has not increased, but rather it has gone down. This testifies to the maturity and responsibility of Russian businesses. Of course, they should be offered motivation rather than being forced to observe regulations and requirements.
So, there is every reason to take another radical step forward, that is, to abandon, for good and on a permanent basis, the majority of audits for all Russian businesses, except on risky or potentially dangerous activities. Everyone has long since understood that there was no need to check on everyone without exception. A risk-oriented approach should be at work. I ask the Government to develop the specific parameters of such a reform in the next few months.
There is another very sensitive topic for business, which has also become important today for our national security and economic resilience. To reduce and bring to a minimum all sorts of abuse and loopholes to exert pressure on entrepreneurs, we are consistently removing loose regulations from criminal law that are applied to economic crimes.
Last March, a law was signed, under which tax-related criminal cases against entrepreneurs shall only be brought before a court by the tax service – there is no other way. Soon a draft law will be passed on reducing the statute of limitations for tax-related crimes and on rejecting lawsuits to initiate criminal proceedings after tax arrears have been paid off.
Working comprehensively, although prudently, we need to decriminalise a wide range of economic offenses, for instance, those that punish businesses without a licence or accreditation. This is a controversial practice today because our Western partners illegitimately refuse to provide such licenses.
Our own agencies must not single-handedly make our businesses criminally liable for actually doing nothing wrong. The problem is this, and small businesses understand it very well – if a licence has expired, and Western partners refuse to extend it, what are businesses to do, wrap up operations? By no means, let them work. State oversight should continue, but there should be no undue interference in business.
It also makes sense to think about raising the threshold of criminal liability for unpaid customs duties and other such taxes. Additionally, we have not for a long time reconsidered the parameters of the terms ‘large’ and ‘very large’ economic loss for the purposes of economic offences despite inflation accruing 50 percent since 2016. The law now fails to reflect the current realities and needs to be corrected.
We need to reconsider the conditions for detaining entrepreneurs and for extending preliminary investigations. It is no secret that these practices have long been used inappropriately.
Businesses have been forced to cease operations or go bankrupt even before the investigation is over. The reputation of the owners and of the brand name suffers as a result, not to mention the direct financial loss, loss of market share and jobs.
I want to ask law enforcement to put an end to these practices. I also ask the Government and the Supreme Court to draft appropriate legislation before October 1 of this year.
In addition, at the Security Council, a special instruction was given to look into criminal cases being opened without later proceeding to court. The number of such cases has grown in recent years. We know the reasons. A case is often opened without sufficient grounds or to put pressure on individuals. We will discuss this in autumn to take legislative action and change the way our law enforcement agencies work.
It goes without saying that regional governments play a major role in creating a modern business environment. As is customary during the St Petersburg Forum, I highlight the regions that have made significant progress in the National Investment Climate Rankings compiled by the Agency for Strategic Initiatives.
There have been changes in the top three. Moscow and Tatarstan have remained at the top and were joined by the Moscow Region which, in a span of one year, went from eighth place to the top three. The leaders of the rankings also include the Tula, Nizhny Novgorod, Tyumen, Novgorod, and Sakhalin regions, St Petersburg and Bashkortostan.
Separately, I would like to highlight the regions that have made the greatest strides such as the Kurgan Region, which moved up 36 spots; the Perm Territory and the Altai Territory, up 26 spots; Ingushetia, up 24 spots; and the Ivanovo Region which moved up 17 spots.
I want to thank and congratulate our colleagues in the regions for their good work.
The federal government and regional and municipal governments should focus on supporting individual business initiatives in small towns and remote rural communities. We are aware of such stories of success. That includes developing popular software and marketing locally produced organic food and environmentally friendly products nationwide using domestic websites.
It is important to create new opportunities, to introduce modern retail formats, including e-commerce platforms, as I mentioned above, and to cut the logistics, transportation and other costs, including by using upgraded Russian Post offices.
It is also important to help small business employees, self-employed individuals and start-up entrepreneurs acquire additional skills and competencies. Please include corresponding measures tailored specifically to small towns and rural and remote areas as a separate line in the national project for promoting small and medium-sized businesses.
Today I would like to address our officials, owners of large companies, our business leaders and executives.
Real, stable success and a sense of dignity and self-respect only come when you link your future and the future of your children with your Fatherland. We have maintained ties with many people for a long time, and I am aware of the sentiments of many of the heads and owners of our companies. You have told me many times that business is much more than just making a profit, and I fully agree. It is about changing life around you, contributing to the development of your home cities, regions and the country as a whole, which is extremely important for self-fulfilment. There is nothing like serving the people and society. This is the meaning of your life and work.
Recent events have reaffirmed what I have always said: it is much better at home. Those who refused to hear that clear message have lost hundreds of millions, if not billions of dollars in the West, in what looked like a safe haven for their assets.
I would like to once again say the following to our colleagues, those who are both in this audience and those who are not here: please, do not fall into the same trap again. Our country has huge potential, and there are more than enough tasks that need your contribution. Invest here, in the creation of new enterprises and jobs, in the development of the tourism infrastructure, support schools, universities, healthcare and the social sphere, culture and sport. I know that many of you are doing this. I know this, but I wanted to say it again.
This is how the Bakhrushin, Morozov, Shchukin, Ryabushinsky, Akchurin, Galeyev, Apanayev, Matsiyev, Mamontov, Tretyakov, Arsanov, Dadashev and Gadzhiyev families understood their noble mission. Many Russian, Tatar, Buryat, Chechen, Daghestani, Yakutian, Ossetian, Jewish, Armenian and other merchant and entrepreneurial families did not deprive their heirs of their due share, and at the same time they etched their names in the history of our country.
Incidentally, I would like to note once again that it remains to be seen what is more important for potential heirs: money and property or their forefathers’ good name and service to the country. The latter is something that cannot be squandered or, pardon my language, wasted on drink.
A good name is something that will always belong to your descendants, to future generations. It will always be part of their lives, going from one generation to another, helping them and making them stronger than the money or property they might inherit can make them.
A responsible and well-balanced macroeconomic policy is the third guiding principle of our long-term development. In fact, this policy has largely enabled us to withstand the unprecedented pressure brought on by sanctions. Let me reiterate that this is an essential policy in the long term, not just for responding to the current challenges. We will not follow in the footsteps of our Western colleagues by replicating their bitter experience setting off an inflation spiral and disrupting their finances.
Our goal is to ensure robust economic growth for years to come, reducing the inflation burden on our people and businesses and achieving the mid- and long-term target inflation rate of four percent. Inflation was one of the first things I mentioned during my remarks, so let me tell you this: we remain committed to this target of a four-percent inflation rate.
I have already instructed the Government to draft proposals regarding the new budget guidelines. They must ensure that our budget policy is predictable and enables us to make the best use of the external economic conditions. Why do we need all this? To put economic growth on a more stable footing, while also delivering on our infrastructure and technological objectives, which provide a foundation for improving the wellbeing of our people.
True, some international reserve currencies have set themselves on a suicidal path lately, which is an obvious fact. In any case, they clearly have suicidal intentions. Of course, using them to ‘sterilise’ our money supply does not make any sense. Still, the principle of planning one’s spending based on how much you earn remains relevant. This is how it works, and we understand this.
Social justice is the fourth principle underpinning our development. There must be a powerful social dimension when it comes to promoting economic growth and business initiatives. This development model must reduce inequality instead of deepening it, unlike what is happening in other countries. To be honest, we have not been at the forefront when it comes to delivering on these objectives. We have yet to resolve many issues and problems in this regard.
Reducing poverty and inequality is all about creating demand for Russian-made products across the country, bridging the gap between regions in terms of their capabilities, and creating new jobs where they are needed the most. These are the core economic development drivers.
Let me emphasise that generating positive momentum in terms of household income growth and poverty reduction are the main performance indicators for government agencies and the state in general. We need to achieve tangible results in this sphere already this year, despite all the objective challenges we face. I have already assigned this task to the Government.
Again, we provide targeted support to the most vulnerable groups – pensioners, families with children, and people in difficult life situations.
Pensions are indexed annually at a rate higher than inflation. This year, they have been raised twice, including by another 10 percent on June 1.
The minimum wage was also increased by 10 percent at the same time, and so was the subsistence minimum – a reference figure used to calculate many social benefits and payments – accordingly, these benefits should also grow, increasing the incomes of about 15 million people.
In recent years, we have built a holistic system to support low-income families with children. Women are entitled to state support from the early stages of pregnancy and until the child reaches the age of 17.
People’s living standards and prosperity are the most important demographic factors; the current situation is quite challenging due to several negative demographic waves that have recently overlapped. In April, less than a hundred thousand children were born in Russia, almost 13 percent less than in April 2020.
I ask the Government to continue to keep the development of additional support measures for families with children under review. They must be far-reaching and commensurate with the magnitude of the extraordinary demographic challenge we are facing.
Russia’s future is ensured by families with two, three and more children. Therefore, we need to do more than provide direct financial support – we need to target and direct the healthcare system, education, and all areas that determine the quality of people's lives towards the needs of families with children.
This problem is addressed, among other approaches, by the national social initiatives, which regional teams and the Agency for Strategic Initiatives are implementing together. This autumn, we will assess the results of their work, review and rank the Russian regions by quality of life in order to apply the best experiences and practices as widely as possible throughout the country.
To be continued.
Current Western strategy in Ukraine is not conducive to peace because it does not deal with some essential aspects of the current conflict. It does not deal with the rights of Russian speakers in Ukraine, and it does not address the thirty-year failure to set up a pan-European security system that includes Russia. Both are issues of primary importance to Russia. The relationship between them may not be obvious to many in the West, but for Russia, they illustrate a mindset of promoting Western interests and values at the expense of Russia’s.
It is precisely because of this mindset that the West was caught flat-footed when Russia suddenly seized the initiative to assert its interests through military means. This has left the West in a quandary, with few palatable options. Its preferred means of coercion—economic sanctions—are bound to become less and less effective over time, just as they have been in other countries, which have always found workable substitutes to reduce dependence on the West. Russia’s importance in providing the world with essential commodities, such as oil, gas, grains, and fertilizer, gives it even more economic clout.
At the same time, the political isolation that the West has sought to impose, while it has a certain public relations appeal, further limits the West’s ability to get Russia to cooperate on other issues of vital importance, and forces Russia into new alliances that will invariably be anti-Western. Henry Kissinger has recently argued that institutionalizing such animosity would be historically unprecedented and should be avoided at all costs.
Meanwhile, despite the rhetoric from Kyiv, the war has not brought Ukraine any closer to a resolution of its own internal conflicts. The rise of Ukrainian patriotic fervor is quite real, yet it often reflects the same regional disparities that have divided Ukraine since its independence. No matter how the military conflict ends, therefore, old resentments are likely to resurface, with Russian-speakers once again being blamed for their supposedly divided loyalties. As the popular Ukrainian journalist Mikhail Dubinyanski recently put it, “it took but a moment for the front lines to stabilize, for the traditional internal hate to re-emerge.”
A lasting settlement must recognize that this conflict will not end with the withdrawal of Russian troops. A settlement must, therefore, address three vital aspects of the conflict simultaneously, or it will not last. First, the competition between Russia and the West over Ukraine, which is clearly not going to end after the fighting stops. Second, the conflict between Russian and Ukrainian elites over their respective national and cultural differences, which is only going to intensify after the war. Third, the conflict between Ukraine’s western and eastern halves, which current patriotic enthusiasm has temporarily masked.
Our proposal does not seek to end these conflicts, which are endemic, but rather to shift the competition from the military arena, with its concomitant dangers of escalation, to the arenas of economic well-being and soft power. In essence, this is the kind of competition that the West was engaged in with the Soviet Union during the heyday of détente after it decided that coexistence was preferable to mutually assured destruction.
In exchange for the cessation of hostilities and the withdrawal of its forces, Russia would be obliged to not annex the regions it currently occupies and agree to hold a status referendum there under international supervision, some ten to twenty years from now. Ukraine, for its part, would accept its temporary loss of control over Novorossiya (the regions of Donbass, Lugansk, Zaporozhye, Kherson, and Nikolayev), with the proviso that their status will be ultimately determined by the referendum outcome.
In addition, NATO would formally pledge not to consider Ukraine for membership. In deference to Ukraine, however, there would be no formal pledge of Ukrainian neutrality. This would permit Ukraine to receive a wide variety of defensive military assistance and training from other countries, short of permanent foreign bases and weapons systems capable of striking Russian territory. Ukraine’s security concerns would be further allayed by a formal pledge by Russia that it will not object to European Union (EU) membership for Ukraine, opening the door to the multi-year assistance with investments and reforms that Ukraine will desperately need to recover.
Russian security, meanwhile, would be bolstered by international recognition of Novorossiya (some of the mechanisms used to defuse the dispute over the Free Territory of Trieste and Saarland might apply). A demilitarized zone on both sides of the Russian-Ukrainian border could be created and security further enhanced by the commitment of several key states to ensure the borders of both Ukraine and Novorossiya.
Sweeteners for Ukraine
A Ukrainian state that is able to pursue the post-2014 nationalist agenda. To obtain Western security guarantees, Russia will have to give up its goal of fully de-Nazifying Ukraine.
The firm prospect of EU membership in the foreseeable future. Russia may draw some scant comfort, however, from the fact that the regime that will be built in Ukraine will then be Europe’s headache (as some are beginning to realize).
Multi-year aid and defensive weapons assistance for Ukraine.
The possibility that regions now lost could eventually rejoin Ukraine if Kyiv provides them with appealing reasons to do so. This will, of course, depend on the policies that Kyiv adopts toward those regions, but Ukrainian authorities will have the better part of two decades, and significant Western assistance, to make their case.
Sweeteners for Russia
The loss of Ukrainian territory—Crimea permanently, Novorossiya perhaps only temporarily.
No NATO membership for Ukraine.
Western sanctions lifted on Russia, Belarus, and Novorossiya. One can reasonably assume that the regions within Novorossiya will be more naturally drawn to Russia. The EU should therefore not repeat the mistake that it made in 2013 of forcing Ukrainians to choose between European and Eurasian economic integration. This time around, everything should be done to create a free trade zone that encourages these regions to become a vital bridge linking both.
Finally, there is the possibility of Novorossiya eventually choosing to join Russia, should it prove to be more appealing and successful than Ukraine. No doubt, the West will do everything in its power over the next ten to twenty years to ensure that this is not the case.
The West should welcome such a shift in the focus of competition since it regards economic success and soft power as areas of traditional strength. Russia too should also welcome it, since it argues that at heart Russians and Ukrainians share a cultural and spiritual bond that goes much deeper than economics. This would be a chance to prove or disprove this argument. Ukrainian nationalists should also welcome it since it would give them two decades in which to build a broad base of support within Ukraine for their view that Russians and Ukrainians have nothing in common and to propagate this view through cultural ties and exports to Novorossiya. Moreover, they will be able to do so among a much more homogenous Ukrainian population, with the blessing and financial support of the West.
Finally, there is the not inconsiderable security advantage that Europe and the world would derive from establishing a framework in which Russia and the West can compete in ways that would be potentially mutually beneficial, rather than assuredly mutually destructive.
It will be objected that such a settlement rewards Russian aggression. In an imperfect world, however, the morality of punishing Russia (without, mind you, ensuring its withdrawal) must be weighed against the morality of allowing further suffering in Ukraine, especially when the alternative not only stops the bloodshed but also offers a mechanism whereby, under more auspicious conditions, Ukraine could potentially regain its territories. Time, however, is of the essence. The longer settlement negotiations are delayed, the more territory that Ukraine is likely to lose to Novorossiya.
Another likely objection will no doubt be that Russian officials cannot ever be trusted to keep their word. Those who feel this way have a ready-made objection to any form of negotiations, and not just with Russia. The only thing we would point out is that by putting the status referendum a good way off into the future, the means of its implementation will be negotiated not by those who unleashed this war, but by a post-Putin Russian leadership. The type of relationship we will have with those future Russian leaders is still very much in the West’s hands to determine.
Gilbert Doctorow completed a Ph.D. in Russian history at Columbia, followed by a 25-year career in international business focused on the USSR/Russia. His two-volume Memoirs of a Russianist, published in 2021-22, has been reissued in translation in St Petersburg.
Nicolai N. Petro is a Professor of Political Science at the University of Rhode Island (USA). During the collapse of the Soviet Union he served as Special Assistant for Policy in the Office of Soviet Union Affairs at the U.S. Department of State. He was a U.S. Fulbright Scholar to Ukraine in 2013-2014, and is the author of the forthcoming book, The Tragedy of Ukraine.
Article by Sergey Lavrov, Russian Minister of Foreign Affairs, “The Law, the Rights and the Rules”, Moscow, June 28, 2021 - News - The Ministry of Foreign Affairs of the Russian Federation
The frank and generally constructive conversation that took place at the June 16, 2021 summit meeting between presidents Vladimir Putin and Joseph Biden in Geneva resulted in an agreement to launch a substantive dialogue on strategic stability, reaffirming the crucial premise that nuclear war is unacceptable. The two sides also reached an understanding on the advisability of engaging in consultations on cybersecurity, the operation of diplomatic missions, the fate of imprisoned Russian and US citizens and a number of regional conflicts.
The Russian leader made it clear, including in his public statements, that finding a mutually acceptable balance of interests strictly on a parity basis is the only way to deliver on any of these tracks. There were no objections during the talks. However, in their immediate aftermath, US officials, including those who participated in the Geneva meeting, started asserting what seemed to be foregone tenets, perorating that they had “made it clear” to Moscow, “warned it, and stated their demands.” Moreover, all these “warnings” went hand in hand with threats: if Moscow does not accept the “rules of the road” set forth in Geneva in a matter of several months, it would come under renewed pressure.
Of course, it has yet to be seen how the consultations to define specific ways for fulfilling the Geneva understandings as mentioned above will proceed. As Vladimir Putin said during his news conference following the talks, “we have a lot to work on.” That said, it is telling that Washington’s ineradicable position was voiced immediately following the talks, especially since European capitals immediately took heed of the Big Brother’s sentiment and picked up the tune with much gusto and relish. The gist of their statements is that they are ready to normalise their relations with Moscow, but only after it changes the way it behaves.
It is as if a choir has been pre-arranged to sing along with the lead vocalist. It seems that this was what the series of high-level Western events in the build-up to the Russia-US talks was all about: the Group of Seven Summit in Cornwall, UK, the NATO Summit in Brussels, as well as Joseph Biden’s meeting with President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen.
These meetings were carefully prepared in a way that leaves no doubt that the West wanted to send a clear message: it stands united like never before and will do what it believes to be right in international affairs, while forcing others, primarily Russia and China, to follow its lead. The documents adopted at the Cornwall and Brussels summits cemented the rules-based world order concept as a counterweight to the universal principles of international law with the UN Charter as its primary source.
In doing so, the West deliberately shies away from spelling out the rules it purports to follow, just as it refrains from explaining why they are needed. After all, there are already thousands of universal international legal instruments setting out clear national commitments and transparent verification mechanisms. The beauty of these Western “rules” lies precisely in the fact that they lack any specific content. When someone acts against the will of the West, it immediately responds with a groundless claim that “the rules have been broken” (without bothering to present any evidence) and declares its “right to hold the perpetrators accountable.” The less specific they get, the freer their hand to carry on with the arbitrary practice of employing dirty tactics as a way to pressure competitors. During the so-called “wild 1990s” in Russia, we used to refer to such practices as laying down the law.
To the participants in the G7, NATO and US-EU summits, this series of high-level events signalled the return by the United States into European affairs and the restored consolidation of the Old World under the wing of the new administration in Washington. Most NATO and EU members met this U-turn with enthusiastic comments rather than just a sigh of relief. The adherence to liberal values as the humanity’s guiding star provides an ideological underpinning for the reunification of the “Western family.” Without any false modesty, Washington and Brussels called themselves “an anchor for democracy, peace and security,” as opposed to “authoritarianism in all its forms.” In particular, they proclaimed their intent to use sanctions to “support democracy across the globe.” To this effect, they took on board the American idea of convening a Summit for Democracy. Make no mistake, the West will cherry pick the participants in this summit. It will also set an agenda that is unlikely to meet any opposition from the participants of its choosing. There has been talk of democracy-exporting countries undertaking “enhanced commitments” to ensure universal adherence to “democratic standards” and devising mechanisms for controlling these processes.
The revitalised Anglo-American Atlantic Charter approved by Joseph Biden and Boris Johnson on June 10, 2021 on the sidelines of the G7 Summit is also worth noting. It was cast as an updated version of the 1941 document signed by Franklin D. Roosevelt and Winston Churchill under the same title. At the time, it played an important role in shaping the contours of the post-war world order.
However, neither Washington, nor London mentioned an essential historical fact: eighty years ago, the USSR and a number of European governments in exile joined the 1941 charter, paving the way to making it one of the conceptual pillars of the Anti-Hitler Coalition and one of the legal blueprints of the UN Charter.
By the same token, the New Atlantic Charter has been designed as a starting point for building a new world order, but guided solely by Western “rules.” Its provisions are ideologically tainted. They seek to widen the gap between the so-called liberal democracies and all other nations, as well as legitimise the rules-based order. The new charter fails to mention the UN or the OSCE, while stating without any reservations the adherence by the Western nations to their commitments as NATO members, viewed de facto as the only legitimate decision-making centre (at least this is how former NATO Secretary-General Anders Fogh Rasmussen described NATO’s role). It is clear that the same philosophy will guide the preparations for the Summit for Democracy.
Labelled as “authoritarian powers,” Russia and China have been designated as the main obstacles to delivering on the agenda set out at the June summits. From a general perspective, they face two groups of grievances, loosely defined as external and internal. In terms of international affairs, Beijing is accused of being too assertive in pursuing its economic interests (the Belt and Road initiative), as well as expanding its military and, in general, technological might with a view to increasing its influence. Russia stands accused of adopting an “aggressive posture” in a number of regions. This is the way they treat Moscow’s policy aimed at countering ultra-radical and neo-Nazi aspirations in its immediate neighbourhood, where the rights of Russians, as well as other ethnic minorities, are being suppressed, and the Russian language, education and culture rooted out. They also dislike the fact than Moscow stands up for countries that became victims to Western gambles, were attacked by international terrorists and risked losing their statehood, as was the case with Syria.
Still, the West reserved its biggest words to the inner workings of the “non-democratic” countries and its commitment to reshape them to fit into the Western mould. This entails bringing society in compliance with the vision of democracy as preached by Washington and Brussels. This lies at the root of the demands that Moscow and Beijing, as well as all others, follow the Western prescriptions on human rights, civil society, opposition treatment, the media, governance and the interaction between the branches of power. While proclaiming the “right” to interfere in the domestic affairs of other countries for the sake of promoting democracy as it understands it, the West instantly loses all interest when we raise the prospect of making international relations more democratic, including renouncing arrogant behaviour and committing to abide by the universally recognised tenets of international law instead of “rules.” By expanding sanctions and other illegitimate coercive measures against sovereign states, the West promotes totalitarian rule in global affairs, assuming an imperial, neo-colonial stance in its relations with third countries. They are asked to adopt the democratic rule under the model of the Western choosing, and forget about democracy in international affairs, since someone will be deciding everything for them. All that is asked of these third countries is to keep quiet, or face reprisals.
Clearheaded politicians in Europe and America realise that this uncompromising policy leads nowhere, and are beginning to think pragmatically, albeit out of public view, recognising that the world has more than just one civilisation. They are beginning to recognise that Russia, China and other major powers have a history that dates back a thousand years, and have their own traditions, values and way of life. Attempts to decide whose values are better, and whose are worse, seem pointless. Instead, the West must simply recognise that there are other ways to govern that may be different from the Western approaches, and accept and respect this as a given. No country is immune to human rights issues, so why all this high-browed hubris? Why do the Western countries assume that they can deal with these issues on their own, since they are democracies, while others have yet to reach this level, and are in need of assistance that the West will generously provide.
International relations are going through fundamental shifts that affect everyone without exception. Trying to predict where it will take us is impossible. Still, there is a question: messianic aspirations apart, what is the most effective form of government for coping with and removing threats that transcend borders and affect all people, no matter where they live? Political scientists are beginning to compare the available toolboxes used by the so-called liberal democracies and by “autocratic regimes.” In this context, it is telling that the term “autocratic democracy” has been suggested, even if timidly.
These are useful considerations, and serious-minded politicians who are currently in power, among others, must take heed. Thinking and scrutinising what is going on around us has never hurt anyone. The multipolar world is becoming reality. Attempts to ignore this reality by asserting oneself as the only legitimate decision-making centre will hardly bring about solutions to real, rather than farfetched challenges. Instead, what is needed is mutually respectful dialogue involving the leading powers and with due regard for the interests of all other members of the international community. This implies an unconditional commitment to abide by the universally accepted norms and principles of international law, including respecting the sovereign equality of states, non-interference in their domestic affairs, peaceful resolution of conflict, and the right to self-determination.
Taken as a whole, the historical West dominated the world for five hundred years. However, there is no doubt that it now sees that this era is coming to a close, while clinging to the status it used to enjoy, and putting artificial brakes on the objective process consisting in the emergence of a polycentric world. This brought about an attempt to provide a conceptual underpinning to the new vision of multilateralism. For example, France and Germany tried to promote “effective multilateralism,” rooted in the EU ideals and actions, and serving as a model to everyone else, rather than promoting UN’s inclusive multilateralism.
By imposing the concept of a rules-based order, the West seeks to shift the conversation on key issues to the platforms of its liking, where no dissident voices can be herd. This is how like-minded groups and various “appeals” emerge. This is about coordinating prescriptions and then making everyone else follow them. Examples include an "appeal for trust and security in cyberspace”, “the humanitarian appeal for action”, and a "global partnership to protect media freedom." Each of these platforms brings together only several dozen countries, which is far from a majority, as far as the international community is concerned. The UN system offers inclusive negotiations platforms on all of the abovementioned subjects. Understandably, this gives rise to alternative points of view that have to be taken into consideration in search of a compromise, but all the West wants is to impose its own rules.
At the same time, the EU develops dedicated horizontal sanctions regimes for each of its “like-minded groups,” of course, without looking back at the UN Charter. This is how it works: those who join these “appeals” or “partnerships” decide among themselves who violates their requirements in a given sphere, and the European Union imposes sanctions on those at fault. What a convenient method. They can indict and punish all by themselves without ever needing to turn to the UN Security Council. They even came up with a rationale to this effect: since we have an alliance of the most effective multilateralists, we can teach others to master these best practices. To those who believe this to be undemocratic or at odds with a vision of genuine multilateralism, President of France Emmanuel Macron offered an explanation in his remarks on May 11, 2021: multilateralism does not mean necessity to strike unanimity, and the position of those "who do not wish to continue moving forward must not be able to stop ... an ambitious avant-garde" of the world community.
Make no mistake: there is nothing wrong with the rules per se. On the contrary, the UN Charter is a set of rules, but these rules were approved by all countries of the world, rather than by a closed group at a cosy get-together.
An interesting detail: in Russian, the words “law” and “rule” share a single root. To us, a rule that is genuine and just is inseparable from the law. This is not the case for Western languages. For instance, in English, the words “law” and “rule” do not share any resemblance. See the difference? “Rule” is not so much about the law, in the sense of generally accepted laws, as it is about the decisions taken by the one who rules or governs. It is also worth noting that “rule” shares a single root with “ruler,” with the latter’s meanings including the commonplace device for measuring and drawing straight lines. It can be inferred that through its concept of “rules” the West seeks to align everyone around its vision or apply the same yardstick to everybody, so that everyone falls into a single file.
While reflecting on linguistics, worldview, sentiment, and the way they vary from one nation or culture to another, it is worth recollecting how the West has been justifying NATO’s unreserved eastward expansion towards the Russian border. When we point to the assurances provided to the Soviet Union that this would not happen, we hear that these were merely spoken promises, and there were no documents signed to this effect. There is a centuries-old tradition in Russia of making handshake deals without signing anything and holding one’s word as sacrosanct, but it seems unlikely to ever take hold in the West.
Efforts to replace international law by Western “rules” include an immanently dangerous policy of revising the history and outcomes of the Second World War and the Nuremberg trials verdicts as the foundation of today’s world order. The West refuses to support a Russia-sponsored UN resolution proclaiming that glorifying Nazism is unacceptable, and rejects our proposals to discuss the demolition of monuments to those who liberated Europe. They also want to condemn to oblivion momentous post-war developments, such as the 1960 UN Declaration on the Granting of Independence to Colonial Countries and Peoples, initiated by our country. The former colonial powers seek to efface this memory by replacing it with hastily concocted rituals like taking a knee ahead of sports competitions, in order to divert attention from their historical responsibility for colonial-era crimes.
The rules-based order is the embodiment of double standards. The right to self-determination is recognised as an absolute “rule” whenever it can be used to an advantage. This applies to the Malvinas Islands, or the Falklands, some 12,000 kilometres from Great Britain, to the remote former colonial territories Paris and London retain despite multiple UN resolutions and rulings by the International Court of Justice, as well as Kosovo, which obtained its “independence” in violation of a UN Security Council resolution. However, if self-determination runs counter to the Western geopolitical interests, as it happened when the people of Crimea voted for reunification with Russia, this principle is cast aside, while condemning the free choice made by the people and punishing them with sanctions.
Apart from encroaching on international law, the “rules” concept also manifests itself in attempts to encroach on the very human nature. In a number of Western countries, students learn at school that Jesus Christ was bisexual. Attempts by reasonable politicians to shield the younger generation from aggressive LGBT propaganda are met with bellicose protests from the “enlightened Europe.” All world religions, the genetic code of the planet’s key civilisations, are under attack. The United States is at the forefront of state interference in church affairs, openly seeking to drive a wedge into the Orthodox world, whose values are viewed as a powerful spiritual obstacle for the liberal concept of boundless permissiveness.
The insistence and even stubbornness demonstrated by the West in imposing its “rules” are striking. Of course, domestic politics is a factor, with the need to show voters how tough your foreign policy can get when dealing with “autocratic foes” during every electoral cycle, which happen every two years in the United States.
Still, it was also the West that coined the “liberty, equality, fraternity” motto. I do not know whether the term “fraternity” is politically correct in today’s Europe from a “gender perspective,” but there were no attempts to encroach on equality so far. As mentioned above, while preaching equality and democracy in their countries and demanding that other follow its lead, the West refuses to discuss ways to ensure equality and democracy in international affairs.
This approach is clearly at odds with the ideals of freedom. The veil of its superiority conceals weakness and the fear of engaging in a frank conversation not only with yes-men and those eager to fall in line, but also with opponents with different beliefs and values, not neo-liberal or neo-conservative ones, but those learned at mother’s knee, inherited from many past generations, traditions and beliefs.
It is much harder to accept the diversity and competition of ideas in the development of the world than to invent prescriptions for all of humanity within a narrow circle of the like-minded, free from any disputes on matters of principle, which makes the emergence of truth all but impossible. However, universal platforms can produce agreements that are much more solid, sustainable, and can be subject to objective verification.
This immutable truth struggles to make it through to the Western elites, consumed as they are with the exceptionalism complex. As I mentioned earlier in this article, right after the talks between Vladimir Putin and Joseph Biden, EU and NATO officials rushed to announce that nothing has changed in the way they treat Russia. Moreover, they are ready to see their relations with Moscow deteriorate further, they claimed.
Moreover, it is an aggressive Russophobic minority that increasingly sets the EU’s policy, as confirmed by the EU Summit in Brussels on June 24 and 25, 2021, where the future of relations with Russia was on the agenda. The idea voiced by Angela Merkel and Emmanuel Macron to hold a meeting with Vladimir Putin was killed before it saw the light of day. Observers noted that the Russia-US Summit in Geneva was tantamount to a go-ahead by the United States to have this meeting, but the Baltic states, siding with Poland, cut short this “uncoordinated” attempt by Berlin and Paris, while the Ukrainian Foreign Ministry summoned the German and French ambassadors to explain their governments’ actions. What came out of the debates at the Brussels summit was an instruction to the European Commission and the European Union External Action Service to devise new sanctions against Moscow without referring to any specific “sins,” just in case. No doubt they will come up with something, should the need arise.
Neither NATO, nor the EU intend to divert from their policy of subjugating other regions of the world, proclaiming a self-designated global messianic mission. The North-Atlantic Treaty Organisation is seeking to proactively contribute to America’s strategy for the Indo-Pacific Region, clearly targeted at containing China, and undermining ASEAN’s role in its decades-long efforts to build an inclusive cooperation architecture for Asia-Pacific. In turn, the European Union drafts programmes to “embrace” geopolitical spaces in its neighbourhood and beyond, without coordinating these initiatives even with the invited countries. This is what the Eastern Partnership, as well as a recent programme approved by Brussels for Central Asia, are all about. There is a fundamental difference between these approaches and the ones guiding integration processes with Russia’s involvement: the CIS, the CSTO, EurAsEC and the SCO, which seek to develop relations with external partners exclusively on the basis of parity and mutual agreement.
With its contemptuous attitude towards other members of the international community, the West finds itself on the wrong side of history.
Serious, self-respecting countries will never tolerate attempts to talk to them through ultimatums and will discuss any issues only on an equal footing.
As for Russia, it is high time that everyone understands that we have drawn a definitive line under any attempts to play a one-way game with us. All the mantras we hear from the Western capitals on their readiness to put their relations with Moscow back on track, as long as it repents and changes its tack, are meaningless. Still, many persist, as if by inertia, in presenting us with unilateral demands, which does little, if any, credit to how realistic they are.
The policy of having the Russian Federation develop on its own, independently and protecting national interests, while remaining open to reaching agreements with foreign partners on an equal basis, has long been at the core of all its position papers on foreign policy, national security and defence. However, judging by the practical steps taken over the recent years by the West, they probably thought that Russia did not really mean what it preached, as if it did not intend to follow through on these principles. This includes the hysterical response to Moscow’s efforts to stand up for the rights of Russians in the aftermath of the bloody 2014 government coup in Ukraine, supported by the United States, NATO and the EU. They thought that if they applied some more pressure on the elites and targeted their interests, while expanding personal, financial and other sectoral sanctions, Moscow would come to its senses and realise that it would face mounting challenges on its development path, as long as it did not “change its behaviour,” which implies obeying the West. Even when Russia made it clear that we view this policy by the United States and Europe as a new reality and will proceed on economic and other matters from the premise that we cannot depend on unreliable partners, the West persisted in believing that, at the end of the day, Moscow “will come to its senses” and will make the required concessions for the sake of financial reward. Let me emphasise what President Vladimir Putin has said on multiple occasions: there have been no unilateral concessions since the late 1990s and there never will be. If you want to work with us, recover lost profits and business reputations, let us sit down and agree on ways we can meet each other half way in order to find fair solutions and compromises.
It is essential that the West understands that this is a firmly ingrained worldview among the people of Russia, reflecting the attitude of the overwhelming majority here. The “irreconcilable” opponents of the Russian government who have placed their stakes on the West and believe that all Russia’s woes come from its anti-Western stance advocate unilateral concessions for the sake of seeing the sanctions lifted and receiving hypothetical financial gains. But they are totally marginal in Russian society. During his June 16, 2021 news conference in Geneva, Vladimir Putin made it abundantly clear what the West is after when it supports these marginal forces.
These are disruptive efforts as far as history is concerned, while Russians have always demonstrated maturity, a sense of self-respect, dignity and national pride, and the ability to think independently, especially during hard times, while remaining open to the rest of the world, but only on an equal, mutually beneficial footing. Once we put the confusion and mayhem of the 1990s behind us, these values became the bedrock of Russia’s foreign policy concept in the 21st century. The people of Russia can decide on how they view the actions by their government without getting any prompts from abroad.
As to the question on how to proceed on the international stage, there is no doubt that leaders will always play an important role, but they have to reaffirm their authority, offer new ideas and lead by conviction, not ultimatums. The Group of Twenty, among others, is a natural platform for working out mutually acceptable agreements. It brings together the leading economies, young and old, including the G7, as well as the BRICS and its like-minded countries. Russia’s initiative to form a Greater Eurasian Partnership by coordinating the efforts of countries and organisations across the continent holds a powerful consolidating potential. Seeking to facilitate an honest conversation on the key global stability matters, President Vladimir Putin suggested convening a summit of the five permanent members of the UN Security Council that have special responsibility for maintaining international peace and stability on the planet.
Efforts to bring more democracy to international relations and affirm a polycentric world order include reforming the UN Security Council by strengthening it with Asian, African and Latin American countries, and ending the anomaly with the excessive representation of the West in the UN’s main body.
Regardless of any ambitions and threats, our country remains committed to a sovereign and independent foreign policy, while also ready to offer a unifying agenda in international affairs with due account for the cultural and civilisational diversity in today’s world. Confrontation is not our choice, no matter the rationale. On June 22, 2021, Vladimir Putin published an article “Being Open, Despite the Past,” in which he emphasised: “We simply cannot afford to carry the burden of past misunderstandings, hard feelings, conflicts, and mistakes.” He also discussed the need to ensure security without dividing lines, a common space for equitable cooperation and inclusive development. This approach hinges on Russia’s thousand-year history and is fully consistent with the current stage in its development. We will persist in promoting the emergence of an international relations culture based on the supreme values of justice and enabling all countries, large and small, to develop in peace and freedom. We will always remain open to honest dialogue with anyone who demonstrates a reciprocal readiness to find a balance of interests firmly rooted in international law. These are the rules we adhere to.
In other words, signing a treaty indicates a nation's general willingness to the concept of the treaty but, until it is ratified or acceded to, it is not binding to a signing party/nation. Signing a treaty does, however, signal to the world that a nation agrees with the intent of the treaty and is willing to work towards ratification/accession.
Now, let's look at some recent comments from United States Secretary of State Mike Pompeo at a meeting held at NATO Headquarters in Brussels regarding Russia's alleged violations of the INF Treaty:
"Finally, and I want to be clear about this, America is upholding the rule of law. When we set forth our commitments, we agree to be bound by them. We expect the same of our treaty counterparts everywhere, and we will hold them accountable when their words prove untrustworthy. If we do not, we’ll get cheated by other nations, expose Americans to greater risk, and squander our credibility."
Let's examine the veracity of Mr. Pompeo's claims regarding Washington's trustworthiness when it comes to the signing and ratification of international treaties.