Vladimir Putin spoke to his own people on Tuesday, and he delivered a nearly two-hour-long State of the Nation address. Below is some of the text of his speech. (Russia refers to the Russia-Ukraine War as a special military operation).
Vladimir Putin: Good afternoon!
Dear deputies of the Federal Assembly – senators, deputies of the State Duma!
Dear citizens of Russia!
With today’s Address, I am speaking at a difficult time – we all know this very well – a milestone time for our country, at a time of cardinal, irreversible changes throughout the world, the most important historical events that determine the future of our country and our people, when each of we has a huge responsibility.
A year ago, in order to protect people on our historical lands, to ensure the security of our country, to eliminate the threat posed by the neo-Nazi regime that emerged in Ukraine after the 2014 coup, a decision was made to conduct a special military operation. And step by step, carefully and consistently, we will solve the tasks before us.
Starting from 2014, Donbass fought, defended the right to live on its own land, speak its native language, fought and did not give up in the conditions of blockade and constant shelling, undisguised hatred from the Kiev regime, believed and waited for Russia to come to the rescue.
Meanwhile – and you know this well – we did everything possible, really everything possible to solve this problem by peaceful means, patiently negotiated a peaceful way out of this grave conflict.
But a completely different scenario was being prepared behind our backs. The promises of the Western rulers, their assurances about the desire for peace in the Donbass turned out to be, as we now see, a forgery, a cruel lie. They simply played for time, engaged in chicanery, turned a blind eye to political assassinations, to the repressions of the Kiev regime against objectionable people, to mockery of believers, and more and more encouraged Ukrainian neo-Nazis to carry out terrorist actions in the Donbass. In Western academies and schools, officers of nationalist battalions were trained and weapons were supplied.
And I want to emphasize that even before the start of the special military operation, Kyiv was negotiating with the West on the supply of air defense systems, combat aircraft, and other heavy equipment to Ukraine. We also remember the attempts of the Kyiv regime to acquire nuclear weapons, because we talked about it publicly.
The United States and NATO rapidly deployed their army bases and secret biological laboratories near the borders of our country, mastered the theater of future military operations in the course of maneuvers, prepared the Kiev regime subject to them, the Ukraine they had enslaved, for a big war.
And today they admit it – they admit it publicly, openly, without hesitation. They seem to be proud, reveling in their treachery, calling both the Minsk agreements and the Normandy format a diplomatic performance, a bluff. It turns out that all the time when the Donbass was on fire, when blood was shed, when Russia was sincerely – I want to emphasize this – it was sincerely striving for a peaceful solution, they were playing on people’s lives, they were playing, in fact, as they say in well-known circles, with marked cards.
This disgusting method of deception has been tried many times before. They behaved just as shamelessly, duplicitously, destroying Yugoslavia, Iraq, Libya, Syria. From this shame they will never be washed off. The concepts of honor, trust, decency are not for them.
Over the long centuries of colonialism, diktat, hegemony, they got used to being allowed everything, got used to spitting on the whole world. It turned out that they treat the peoples of their own countries just as disdainfully, like a master – after all, they cynically deceived them too or deceived them with fables about the search for peace, about adherence to the UN Security Council resolutions on Donbass. Indeed, the Western elites have become a symbol of total unprincipled lies.
We firmly defend not only our interests, but also our position that in the modern world there should be no division into the so-called civilized countries and all the rest, that an honest partnership is needed, which in principle denies any exclusivity, especially aggressive.
We were open, sincerely ready for a constructive dialogue with the West, we said and insisted that both Europe and the whole world needed an indivisible security system equal for all states, and for many years we suggested that our partners discuss this idea together and work on it. implementation. But in response, they received an indistinct or hypocritical reaction. This is about words. But there were also specific actions: the expansion of NATO to our borders, the creation of new positional areas for missile defense in Europe and Asia – they decided to hide behind us with an “umbrella”, this is the deployment of military contingents, and not only near the borders of Russia.
I want to emphasize, yes, in fact, it is well known to everyone: not a single country in the world has such a number of military bases abroad as the United States of America. There are hundreds of them, I want to emphasize this, hundreds of bases around the world, the whole planet is littered, you just need to look at the map.
The whole world has seen them pull out of fundamental armaments agreements, including the Intermediate-Range Nuclear Forces Treaty, unilaterally tear apart the fundamental agreements that keep the world on track. For some reason, they did it – they don’t do anything just like that, as you know.
Finally, in December 2021, we officially submitted draft security assurance agreements to the US and NATO. But in all key, fundamental positions for us, they received, in fact, a direct refusal. Then it finally became clear that the go-ahead for the implementation of aggressive plans was given and they were not going to stop.
The threat is growing, and every day. The incoming information left no doubt that by February 2022, everything was ready for another bloody punitive action in the Donbass, against which, let me remind you, the Kiev regime threw artillery, tanks, and planes back in 2014.
We all remember well the pictures when air strikes were carried out on Donetsk, air strikes were carried out not only on it, but also on other cities. In 2015, they again attempted a direct attack on the Donbass, while continuing the blockade, shelling, and terror against civilians. All this, let me remind you, completely contradicted the relevant documents and resolutions adopted by the UN Security Council, completely – everyone pretended that nothing was happening.
I want to repeat this: it was they who unleashed the war, and we used force and use it to stop it.
Those who planned a new attack on Donetsk, Donbass, and Luhansk clearly understood that the next target was a strike on Crimea and Sevastopol, and we knew and understood this. And now such far-reaching plans are also openly spoken about in Kyiv – they have revealed, they have revealed what we already knew so well.
We protect people’s lives, our own home. And the goal of the West is unlimited power. He has already spent more than $150 billion on aiding and arming the Kyiv regime. For comparison: according to the Organization for Economic Cooperation and Development, the G7 countries have allocated about $60 billion in 2020-2021 to help the world’s poorest states. Understandable, right? For the war – 150, and for the poorest countries, which are allegedly constantly taken care of – 60, and even under the well-known demands of obedience from the countries – recipients of this money. And where is all the talk about the fight against poverty, about sustainable development, about the environment? Where does it all go? Where did it all go? At the same time, the flow of money for the war does not decrease. Also, they spare no expense to encourage unrest and upheavals in other countries, and again all over the world.
At a recent conference in Munich, there were endless accusations against Russia. One gets the impression that this was done only so that everyone would forget what the so-called West has done in recent decades. And it was they who let the genie out of the bottle, plunged entire regions into chaos.
According to American experts themselves, as a result of wars – I want to draw attention to this: we did not come up with these figures, the Americans themselves give them – as a result of the wars that the United States unleashed after 2001, almost 900 thousand people died, more than 38 million became refugees . Now they just want to erase all this from the memory of mankind, they pretend that nothing happened. But no one in the world has forgotten and will not forget this.
None of them consider human casualties and tragedies, because, of course, trillions and trillions of dollars are at stake; the ability to continue to rob everyone; under the guise of words about democracy and freedoms, to spread neoliberal and inherently totalitarian values; hang labels on entire countries and peoples, publicly insult their leaders; suppress dissent in their own countries; creating the image of an enemy, diverting people’s attention from corruption scandals – after all, all this does not leave the screens, we see it all – from the growing internal economic, social, interethnic problems and contradictions.
Let me remind you that in the 30s of the last century, the West actually opened the way for the Nazis to power in Germany. And in our time, they began to make “anti-Russia” out of Ukraine. The project is actually not new. People who are at least a little immersed in history know perfectly well: this project goes back to the 19th century, it was cultivated in the Austro-Hungarian Empire, and in Poland, and other countries with one goal – to tear off these historical territories, which today are called Ukraine , from our country. That’s what this goal is. There is nothing new, no novelty, everything is repeated.
The West accelerated the implementation of this project today by supporting the 2014 coup. After all, the coup is bloody, anti-state, anti-constitutional – as if nothing had happened, as if it was necessary, they even reported how much money was spent on it. Russophobia, extremely aggressive nationalism, was laid in the ideological basis.
Recently, one of the brigades of the armed forces of Ukraine, ashamed to say – we are ashamed, they are not, – was given the name “Edelweiss”, as the Nazi division, which participated in the deportation of Jews, the execution of prisoners of war, in punitive operations against the partisans of Yugoslavia, Italy, Czechoslovakia and Greece . The Armed Forces of Ukraine and the National Guard of Ukraine are especially popular with the chevrons Das Reich, “Dead Head”, “Galicia”, other SS units, , which also have blood on their hands to the elbow. The identification marks of the Wehrmacht of Nazi Germany are applied to Ukrainian armored vehicles.
Neo-Nazis do not hide whose heirs they consider themselves to be. It is surprising that in the West, none of the powers that be does not notice. Why? Because they, excuse me for bad manners, do not care. It doesn’t give a damn who to bet on in the fight against us, in the fight against Russia. The main thing is that they fight against us, against our country, which means that everyone can be used. And we saw it, and it happened: both terrorists and neo-Nazis, even if the devil is bald, you can use it, God forgive me, if only they would fulfill their will, serve as a weapon against Russia.
The “anti-Russia” project is, in fact, part of a revanchist policy towards our country, to create hotbeds of instability and conflicts right at our borders. And then, in the 30s of the last century, and now the plan is the same – to direct aggression to the east, to kindle a war in Europe, to eliminate competitors by proxy.
We are not at war with the people of Ukraine, I have already spoken about this many times. The people of Ukraine themselves became a hostage of the Kyiv regime and its Western masters, who actually occupied this country in the political, military, economic sense, destroyed Ukrainian industry for decades, and plundered natural resources. The natural result was social degradation, a colossal increase in poverty and inequality. And in such conditions, of course, it is easy to scoop up material for military operations. Nobody thought about people, they were prepared for slaughter and eventually turned into consumables. It’s sad, it’s just scary to talk about it, but it’s a fact.
Responsibility for inciting the Ukrainian conflict, for the escalation, for the increase in the number of its victims lies entirely with the Western elites and, of course, with the current Kiev regime, for which the Ukrainian people are, in fact, a stranger. The current Ukrainian regime serves not national interests, but the interests of third countries.
The West is using Ukraine both as a battering ram against Russia and as a training ground. I will not now dwell on the West’s attempts to turn the tide of hostilities, on their plans to increase military supplies – everyone is already well aware of this. But one circumstance should be clear to everyone: the more long-range Western systems will come to Ukraine, the further we will be forced to move the threat away from our borders. It `s naturally.
The elites of the West make no secret of their goal: to inflict – as they say, this is direct speech – “the strategic defeat of Russia.” What does it mean? For us, what is it? This means finishing with us once and for all, that is, they intend to transfer a local conflict into a phase of global confrontation. This is exactly how we understand all this and will react accordingly, because in this case we are talking about the existence of our country.
But they also cannot but be aware that it is impossible to defeat Russia on the battlefield, therefore they are conducting more and more aggressive information attacks against us. First of all, of course, young people, young generations are chosen as the target. And here again they constantly lie, distort historical facts, do not stop attacks on our culture, on the Russian Orthodox Church, and other traditional religious organizations of our country.
Look at what they are doing with their own peoples: the destruction of the family, cultural and national identity, perversion, abuse of children, up to pedophilia, are declared the norm, the norm of their life, and clergy, priests are forced to bless same-sex marriages. God bless them, let them do what they want. What do you want to say here? Adults have the right to live as they want, we have treated this in Russia and will always treat it this way: no one intrudes into private life, and we are not going to do it.
But I want to tell them: but look, excuse me, the sacred scriptures, the main books of all other world religions. Everything is said there, including that the family is the union of a man and a woman, but these sacred texts are now being questioned. The Anglican Church, for example, has been reported to be planning—planning, though only just yet—to explore the idea of a gender-neutral god. What can you say? God forgive me, they don’t know what they’re doing.
Millions of people in the West understand that they are being led to a real spiritual catastrophe. The elites, frankly, are just going crazy, and it seems that there is no cure. But these are their problems, as I said, and we are obliged to protect our children, and we will do it: we will protect our children from degradation and degeneration.
It is obvious that the West will try to undermine and split our society, to rely on national traitors who at all times – I want to emphasize this – have the same poison of contempt for their own Fatherland and the desire to make money by selling this poison to those who are ready pay for it. It’s always been that way.
Whoever embarked on the path of direct betrayal, committing terrorist and other crimes against the security of our society, the territorial integrity of the country, will be held accountable under the law.
But we will never be like the Kyiv regime and the Western elites who are engaged in and have been engaged in the “witch hunt”, we will not settle scores with those who took a step aside, retreated from their homeland. Let it remain on their conscience, let them live with it – they have to live with it. The main thing is that the people, the citizens of Russia gave them a moral assessment.
I am proud – I think that we are all proud – that our multinational people, the vast majority of citizens have taken a principled position regarding the special military operation, understood the meaning of the actions we are doing, supported our actions to protect Donbass. In this support, first of all, real patriotism was manifested – a feeling that is historically inherent in our people. It amazes with its dignity, deep awareness by everyone, I emphasize, by everyone, of their own inextricable fate with the fate of the Fatherland.
Dear friends, I want to thank everyone, all the people of Russia for their courage and determination, to say thank you to our heroes, soldiers and officers of the army and navy, the National Guard, members of the special services and all law enforcement agencies, soldiers of the Donetsk and Luhansk corps, volunteers, patriots who fight in the ranks combat army reserve BARS.
I want to apologize: I’m sorry that during today’s speech I can’t name everyone. You know, when I was preparing this speech, I wrote a long, long list of these heroic units, then I took it out of today’s speech, because, as I said, it is impossible to name everyone, and I was simply afraid to offend those whom I would not name.
Low bow to the parents, wives, families of our defenders, doctors and paramedics, medical instructors, nurses who save the wounded, railway workers and drivers who supply the front, builders who erect fortifications and restore housing, roads, civilian facilities, workers and engineers of defense plants, who now work almost around the clock, in several shifts, to rural workers who reliably ensure the food security of the country.
I thank the teachers who sincerely care about the young generations of Russia, especially those teachers who work in the most difficult, in fact front-line, conditions; cultural figures who come to the war zone, to hospitals to support soldiers and officers; volunteers who help the front and civilians; journalists, above all, of course, war correspondents who take risks on the front lines to tell the whole world the truth; pastors of Russian traditional religions, military priests, whose wise word supports and inspires people; civil servants and entrepreneurs – all those who perform their professional, civic and simply human duty.
Special words for residents of the Donetsk and Lugansk People’s Republics, Zaporozhye and Kherson regions. You yourself, dear friends, you yourself determined your future in referendums, made a firm choice, despite the threats and terror of neo-Nazis, in conditions when military operations were very close, but there was and is nothing stronger than your determination to be with Russia, with your Motherland.
(Applause.)
I want to emphasize that this is the audience’s reaction to the residents of the Donetsk and Luhansk People’s Republics, Zaporozhye and Kherson. Once again: low bow to all of them.
We have already begun and will continue to build up a large-scale program for the socio-economic recovery and development of these new subjects of the Federation. This includes reviving enterprises and jobs, the ports of the Sea of Azov, which has once again become an inland sea of Russia, and building new modern roads, as we did in Crimea, which now has a reliable land connection with all of Russia. We will definitely implement all these plans together.
Today, the regions of the country provide direct support to the cities, districts and villages of the Donetsk and Lugansk People’s Republics, Zaporozhye and Kherson region, they do it sincerely, like real brothers and sisters. Now we are together again, which means that we have become even stronger and will do everything so that the long-awaited peace returns to our land, so that the safety of people is ensured. For this, for their ancestors, for the future of children and grandchildren, for the restoration of historical justice, for the reunification of our people, fighters, our heroes are fighting today.
Dear friends, I ask you to honor the memory of our comrades-in-arms who gave their lives for Russia, civilians, the elderly, women, children who died under shelling at the hands of neo-Nazis and punishers.
(Moment of silence.)
Thank you.
We all understand, and I understand how unbearably hard it is now for the wives, sons, daughters of the fallen soldiers, their parents, who raised worthy defenders of the Fatherland – the same as the young guards of Krasnodon, like the boys and girls who during the Great Patriotic War fought against Nazism, defended the Donbass. All of Russia today remembers their courage, steadfastness, the greatest fortitude, sacrifice.
Our duty is to support families that have lost their relatives, loved ones, help them raise, raise their children, give them an education and a profession. The family of each participant in a special military operation should be in the zone of constant attention, surrounded by care and honor. Their needs must be responded to immediately, without red tape.
I propose to create a special state fund. Its task will be targeted, personal assistance to the families of fallen soldiers and veterans of the special military operation. He will coordinate the provision of social, medical, psychological support, resolve issues of sanatorium treatment and rehabilitation, help in education, sports, employment, entrepreneurship, advanced training, and in obtaining a new profession. A separate most important task of the foundation is the organization of long-term care at home, high-tech prosthetics for everyone who needs it.
I ask the Government, together with the State Council Commission on Social Policy, the regions, to resolve all organizational issues as soon as possible.
The work of the state fund should be open, and the procedure for providing assistance should be simple, on the principle of “one window”, without treasury and bureaucracy. For each family, I emphasize, for each family of the deceased, for each veteran, there should be assigned a personal social worker, a coordinator who, in the course of personal communication in real time, will resolve emerging issues. I would like to draw your attention to the fact that already this year the fund’s structures should be deployed in all regions of the Russian Federation.
We already have measures to support veterans of the Great Patriotic War, combat veterans, and participants in local conflicts. I think that in the future the state fund, which I mentioned, can also deal with these important issues. We need to work it out, and I ask the Government to do it.
Let me emphasize that the creation of a special fund does not remove responsibility from other structures and levels of power. I expect all federal departments, regions and municipalities to continue to pay close attention to veterans, military personnel, and their families. And in this regard, I want to thank the leaders of the subjects of the Federation, mayors of cities, heads of regions, who constantly meet with people, go to the line of contact, and support their fellow countrymen.
What would you like to highlight in particular? Today, professional servicemen, mobilized and volunteers endure the hardships of the front together – we are talking about supplies and equipment, about monetary allowances and insurance payments in connection with the wound, about medical care. However, the appeals that come to me and to the governors – they also report to me about this – to the military prosecutor’s office, to the Commissioner for Human Rights, indicate that far from all these issues have been resolved yet. It is necessary to understand in each specific case.
And one more thing: service in the zone of a special military operation – everyone understands this very well – is associated with colossal physical and psychological stress, with everyday risks to health and life. Therefore, I consider it necessary to establish for the mobilized, in general for all military personnel, for all participants in a special military operation, including volunteers, regular leave lasting at least 14 days and at least once every six months, excluding travel time, so that each soldier I had the opportunity to visit families, to be close to relatives and friends.
Dear Colleagues!
As you know, we have approved a plan for the construction and development of the Armed Forces for 2021-2025 by Presidential Decree. Work on its implementation is underway, the necessary adjustments are being made. And I would like to emphasize that our further steps to strengthen the army and navy and the current and prospective development of the Armed Forces must, of course, be based on real combat experience gained during a special military operation. It is extremely important to us, one might even say, absolutely priceless.
Now, for example, the level of equipping Russia’s nuclear deterrence forces with the latest systems is more than 91 percent, 91.3 percent. And now, I repeat, taking into account the experience we have gained, we must reach the same high quality level in all components of the Armed Forces.
Officers and sergeants who have shown themselves to be competent, modern and decisive commanders – there are a lot of them – will be promoted to higher positions as a matter of priority, sent to military universities and academies, and serve as a powerful personnel reserve for the Armed Forces. And, of course, they should be in demand in the civilian population, in government at all levels. I just want to draw the attention of colleagues to this. It is very important. People must understand that the Motherland appreciates their contribution to the defense of the Fatherland.
We will actively introduce the most advanced technologies that will ensure an increase in the qualitative potential of the army and navy. We have such developments, samples of weapons and equipment in each direction. Many of them are significantly superior to their foreign counterparts in their specifications. The task now before us is to deploy their mass, mass production.
And this work is in progress, ongoing, its pace is constantly increasing, and on our own, I want to emphasize this, on our own, Russian scientific and industrial base, due to the active involvement of small and medium-sized high-tech businesses in the implementation of the state defense order.
Today, our factories, design bureaus, and research teams employ both experienced specialists and more and more young people, talented, qualified, committed to a breakthrough, faithful to the traditions of Russian gunsmiths – to do everything for victory.
We will certainly strengthen guarantees for labor collectives. This also applies to salaries and social security. I propose launching a special program of preferential rental housing for employees of defense industry enterprises. The rental rate for them will be significantly lower than the market rate, since a significant part of the housing payment will be covered by the state.
We certainly discussed this issue with the Government. I instruct you to work out all the details of this program and, without delay, start building such rental housing, primarily, of course, in cities – our significant defense, industrial and research centers.
Dear Colleagues!
As I have already said, the West has deployed not only a military, informational, but also an economic front against us. But nowhere has he achieved anything and never will. Moreover, the initiators of the sanctions are punishing themselves: they provoked price increases, job losses, plant closures, an energy crisis in their own countries, and they say to their citizens – we hear this – they say that the Russians are to blame for everything.
What means were used against us in this sanctions aggression? They tried to break economic ties with Russian companies, disconnect the financial system from communication channels in order to crush our economy, deprive us of access to export markets in order to hit incomes. This is the theft – there is no other way to say – our foreign exchange reserves, attempts to collapse the ruble and provoke destructive inflation.
I repeat, anti-Russian sanctions are just a means. And the goal, as the Western leaders themselves declare – a direct quote – is to “make suffering” our citizens. “Make suffer” – such humanists. They want to make the people suffer, thereby destabilizing our society from within.
But their calculation did not materialize – the Russian economy and management system turned out to be much stronger than the West believed. Thanks to the joint work of the Government, Parliament, the Bank of Russia, the constituent entities of the Federation and, of course, the business community, labor collectives, we ensured the stability of the economic situation, protected citizens, saved jobs, prevented a shortage in the market, including essential goods, supported the financial system, entrepreneurs who invest in the development of their business, and therefore in the development of the country.
So, already in March last year, a package of measures to support business and the economy was launched for a total amount of about a trillion rubles. I would like to draw your attention to the fact that this is not an issuance policy, no, no, everything is being done on a solid market basis.
At the end of 2022, the gross domestic product decreased. Mikhail Vladimirovich called and said: I would like you to tell me about it. Yesterday, in my opinion, this information came out, and rightly so, on time, as expected, everything is according to plan.
We were predicted, remember, economic recession of 20-25 percent, ten. More recently, we said: 2.9 – I said. A little later – 2.5. Gross domestic product fell 2.1 percent in 2022, the most recent data. At the same time, let me remind you that back in February-March of last year, as I said, they predicted that we would simply collapse the economy.
Russian business has rebuilt logistics, strengthened ties with responsible, predictable partners – and there are many of them, most of them in the world.
I would like to note that the share of the Russian ruble in our international settlements doubled compared to December 2021 and amounted to one third, and together with the currencies of friendly countries, this is already more than half.
Together with our partners, we will continue to work on the formation of a stable, secure system of international settlements, independent of the dollar and other Western reserve currencies, which, with such a policy of Western elites and Western rulers, will inevitably lose their universal character. They do everything with their own hands. It is not we who reduce settlements in dollars or in other so-called universal currencies – they do everything with their own hands.
You know, there is such a stable expression: guns instead of butter. The defense of the country is, of course, the most important priority, but while solving strategic tasks in this area, we must not repeat the mistakes of the past, we must not destroy our own economy. We have everything to ensure security and create conditions for the country’s confident development. It is in this logic that we act and will continue to act.
For example, many basic, I would like to stress that it is the civilian sectors of the domestic economy, not only did not reduce, but significantly increased production over the past year. For the first time in the modern history of our country, housing commissioning volumes exceeded 100 million square meters.
As for our agricultural production, last year it showed double-digit growth rates. Thank you very much, low bow to agricultural producers. Russian farmers have harvested a record harvest: over 150 million tons of grain, including over 100 million tons of wheat. By the end of the agricultural year, that is, by June 30, 2023, we will be able to bring the total volume of grain exports to 5,560 million tons.
Even 10-15 years ago it seemed just a fairy tale, an absolutely unrealistic plan. If you remember – and certainly some here remember, the former Deputy Prime Minister and Minister of Agriculture is here – not so long ago, we collected 60 million in general – for the year, and now there will be 55–60 only for export potential. I am convinced that we have every opportunity for a similar breakthrough in other areas.
We have not allowed a drawdown in the labor market; on the contrary, we have achieved a reduction in unemployment in modern conditions. Today, in the face of such great difficulties on all sides, the labor market has become more comfortable for us than it was before. Remember, before the pandemic, unemployment was 4.7 percent, and now it is 3.7, in my opinion. Mikhail Vladimirovich, how much is 3.7? 3.7 is a historical low.
I repeat, the Russian economy has overcome the risks that have arisen – it has overcome it. Yes, many of these risks were impossible to calculate in advance, we had to respond literally from the wheels, as problems arose. Both at the state level and in business, decisions were made as quickly as possible. I would like to note that private initiative, small and medium-sized businesses have played a huge role here – this should not be forgotten. We have avoided excessive administrative regulation, the bias of the economy towards the state.
What else is important? The economic downturn last year was recorded only in the second quarter – already in the third and fourth quarters, growth and recovery were noted. We have actually entered a new cycle of economic growth. According to experts, its model and structure acquire a qualitatively different character. New and promising global markets are coming to the fore, including the Asia-Pacific [Asia-Pacific region], our own domestic market, scientific, technological, human resources: not the supply of raw materials abroad, but the production of goods with high added value. This makes it possible to unleash the enormous potential of Russia in all spheres and areas.
Already this year, a solid increase in domestic demand is predicted. I am sure that our companies will take advantage of this opportunity to increase production, produce the most demanded products, and occupy niches that have been vacated or are being vacated after the departure of Western companies.
Today we see the whole picture, we understand the structural problems that we need to solve in logistics, technology, finance, and personnel. We have been talking a lot and constantly about the need to change the structure of our economy in recent years, and now these changes are a vital necessity, and this is changing the situation, and in this case for the better. We know what needs to be done for the steady progressive development of Russia, and specifically sovereign, independent development, despite any external pressure and threats, with a reliable guarantee of the security and interests of the state.
I draw your attention and want to emphasize this in particular: the point of our work is not to adapt to the current conditions. The strategic task is to bring our economy to new frontiers. Now everything is changing, and changing very, very quickly. This is a time of not only challenges, but also opportunities – today this is true, and our future life depends on how we implement them. It is necessary to remove – I want to emphasize this – to remove any interdepartmental contradictions, formalities, insults, omissions, other nonsense. Everything for the cause, everything for the result – everything should be aimed at this.
The successful start of Russian companies, small family businesses is already a victory. The opening of modern factories and kilometers of new roads is a victory. A new school or kindergarten is a victory. Scientific discoveries and technologies are, of course, also a victory. Everyone’s contribution to the overall success is what matters.
In what areas should the partnership work of the state, regions, domestic business be focused?
First. We will expand promising foreign economic relations and build new logistics corridors. A decision has already been made to extend the Moscow-Kazan expressway to Yekaterinburg, Chelyabinsk and Tyumen, and in the future to Irkutsk and Vladivostok with access to Kazakhstan, Mongolia and China, which, among other things, will significantly expand our economic ties with the markets of Southeast Asia.
We will develop the ports of the Black and Azov Seas. We will pay special attention – we are already paying it, those who do it on a daily basis know – we will pay special attention to the North-South international corridor. Already this year, vessels with a draft of at least 4.5 meters will be able to pass through the Volga-Caspian Canal. This will open up new routes for business cooperation with India, Iran, Pakistan and the countries of the Middle East. We will continue to develop this corridor.
Our plans include the accelerated modernization of the eastern direction of the railways, the Trans-Siberian Railway and the BAM, and the expansion of the capabilities of the Northern Sea Route. This is not only additional cargo traffic, but also the basis for solving national problems for the development of Siberia, the Arctic and the Far East.
The infrastructure of the regions, the development of infrastructure, including communications, telecommunications, and the road network, will receive a powerful impetus. Already next year, in 2024, at least 85 percent of the roads in the largest agglomerations of the country, as well as more than half of the roads of regional and intermunicipal significance, will be brought to a standard state. I’m sure we’ll do it.
We will continue the free gasification program. A decision has already been made to extend it to social facilities: kindergartens and schools, clinics, hospitals, feldsher and obstetric stations. And for citizens, such a program will now operate on an ongoing basis: they will always be able to apply for connection to gas supply networks.
This year, a large program for the construction and repair of housing and communal services begins. Within ten years, it is planned to invest at least 4.5 trillion rubles in this area. We know how important this is for citizens, how neglected this area is – we need to work, and we will do it. It is important that the program immediately get a strong start, so I ask the Government to ensure its stable funding.
Second. We will have to significantly expand the technological capabilities of the Russian economy and ensure the growth of the capacities of the domestic industry.
An industrial mortgage tool has been launched, and now it will be possible to take a soft loan not only for the purchase of production facilities, but also for their construction or modernization. The amount of such a loan was discussed many times and they wanted to increase it, a decent amount, as a first step – very good: the amount of such a loan is up to 500 million rubles. It is available at a rate of three or five percent for up to seven years. It seems to me a very good program, and it should be used.
Starting this year, a new mode of operation of industrial clusters has also been in effect, in which the fiscal and administrative burden on resident companies has been reduced, and the demand for their innovative products, which are just entering the market, is supported by long-term orders and subsidies from the state.
According to estimates, these measures should ensure the implementation of demanded projects in the amount of more than ten trillion rubles by 2030, and already this year the expected amount of investments may be about two trillion. I would like to draw your attention to the fact that these are not just forecasts, but clearly established benchmarks.
Therefore, I ask the Government to speed up the launch of these projects as much as possible, lend a shoulder to business, and offer systemic support measures, including tax incentives. I know how the financial bloc does not like to provide benefits, and I partly share the following position: the taxation system should be integral, without any niches, exceptions, but a creative approach in this case is in demand.
So, starting this year, Russian companies can reduce income tax payments if they purchase advanced domestic IT solutions and products using artificial intelligence. Moreover, these costs are taken into account with an increased coefficient, one and a half times more than the actual costs. That is, for every ruble invested by the company in the purchase of such products, which I just mentioned, there is a tax deduction of one and a half rubles.
I propose extending this tax benefit to the purchase of Russian high-tech equipment in general. I ask the Government to make proposals on a list of such equipment by industry in which it is used and on the procedure for granting benefits. This is a good decision that will revive the economy.
Third. The most important issue on the agenda for the development of economic growth is new sources of investment financing, we also talk about this a lot.
Thanks to a strong balance of payments, Russia does not need to borrow abroad, bow down, beg for money and then have a long dialogue about what, how much and under what conditions to give. Domestic banks operate stably and steadily, have a solid margin of safety.
In 2022, the volume of bank loans to the corporate sector has grown, you know, it has grown. There were many fears about this, but growth has been recorded, and it has grown by 14 percent, which is more than in 2021, without any military operation. In 2021, the growth was 11.7 percent, and now it is 14 percent. The mortgage portfolio also added 20.4 percent. Development is underway.
As a result of last year, the banking sector as a whole worked with a profit. Yes, it is not as big as in previous years, but decent: profit – 203 billion rubles. This is also an indicator of the stability of the Russian financial sector.
According to estimates, already in the second quarter of this year, inflation in Russia will approach the target level of four percent. Let me remind you that in some EU countries it is already 12, 17, 20 percent, we have four, well, five – the Central Bank, the Ministry of Finance are sorting out among themselves, but it will be closer to the target indicator. Taking into account the positive dynamics of this and other macroeconomic parameters, objective conditions are being formed for reducing long-term lending rates in the economy, which means that credit for the real sector should become more accessible.
To be continued.
Ket Garden
Shiny bull 