"The global economy is undergoing the most massive transformation in recent decades"

The plenary session with Vladimir Putin at the SPIEF on June 20 lasted four hours and covered both economic and international issues. The President announced the most ambitious transformation of the global market: BRICS is now playing an increasingly important role on the world stage, and the G7's share is decreasing from year to year. The situation of the Russian Federation is also improving: The inflation situation is developing better than expected. In this context, Vladimir Putin has identified five main directions for the development of the Russian economy.: from increasing labor productivity to creating a new quality investment climate. The SPIEF participating countries are particularly interested in the latter. Other topics include the conflict in the Middle East and the Ukrainian crisis. The President said he was concerned about the possibility of the world sliding into World War III. What Vladimir Putin said about the buffer zone in Sumy region and why, in fact, the Indonesian president did not go to the G7 summit is in the Izvestia article.

Who participated in the plenary session with Putin

The central event of the next St. Petersburg International Economic Forum, the plenary session with Vladimir Putin, was held on June 20. Traditionally, the Russian leader sets the tone for the development of the country's economy, which is especially important in the context of the international situation. The topic of the meeting is "Shared values — the basis for growth in a multipolar world." It lasted for four hours, breaking the record for the longest such discussions over the past three years. Along with Vladimir Putin, Indonesian President Prabowo Subianto, National Security Adviser to the King of Bahrain Nasser Bin Hamad Al Khalifa, South African Vice President Paul Mashatile and Deputy Premier of the State Council of the People's Republic of China Ding Xuexiang participated in the discussion. Vladimir Putin held a personal meeting with each of the guests at the SPIEF.

The name of the moderator of the plenary session was kept secret, as usual: it turned out to be a journalist from the UAE, Director General of Sky News Arabia, Nadim Koteich, who last year participated in a meeting between the Russian president and media representatives from the BRICS countries.

Putin's opening speech lasted almost an hour: during this time, the head of state defined the guidelines for the development of the domestic economy, named the main trends of change and assessed the situation on the world stage.

— The global economy is undergoing the most extensive transformation in recent decades. The countries of the world community are increasing their potential, changing the balance of power and the entire economic picture of the planet. If at the beginning of the 21st century the BRICS countries, for example, made up a fifth of the global economy, only a fifth, today it is already 40% of the global economy. And it is obvious that this share will only grow," he said.

The mutual trade turnover of the BRICS members has already exceeded $1 trillion, and this figure continues to increase. The G7's share in the global economy is decreasing from year to year, while the share of the united countries within the BRICS is growing, the head of state noted. By the way, the Indonesian president decided to publicly explain why he missed the G7 summit, to which he was invited.

— They asked me why I didn't go to the G7 meeting. Why did I come here to the SPIEF? It's not because I don't respect the G7, no. The fact is that I demonstrate my commitment to this forum. And I announced that I would come here before I was invited to the G7," Prabowo Subianto clarified.

Virtually all participants in the meeting noted Russia's sincere desire to strengthen international economic dialogue. Prince Nasser bin Hamad Al Khalifa of Bahrain believes that the economic policy pursued by the Russian leadership in various sectors, including energy and industry, has a positive impact on the investment climate in the world. This opinion was shared by the representative of South Africa.

— SPIEF remains a recognized platform for global dialogue on economic cooperation, investment and innovation. Russia has long played a strategic role in the global economy, being not only the largest producer of energy resources, but also a key actor in food security, industrial and technological development, and innovation through the development of science," said Paul Mashatile, Vice President of the Republic of South Africa.

China believes that today's systematic restoration of contacts between Russia and the United States is beneficial for the whole world — it helps to stabilize the international situation and restore the global economy.

Development of the Russian economy

The Head of the Russian Federation has identified five areas of development of the domestic economy, which in the near future should be given special attention. First, it is an increase in the well-being of citizens through the transition to a high-wage economy based on increased labor productivity. Secondly, the creation of a new quality investment climate. Putin called the third structural change an increase in the technological efficiency of the domestic economy in all areas. Among other areas is the new quality of foreign trade: both exports and imports. In particular, it is necessary to increase non-oil and gas exports. The fifth point was the strengthening of the country's sovereignty.

At the same time, Russia needs private investment, including foreign investment, and Moscow will create all possible conditions for the comfort of foreign investors. Indonesia is open to doing business, including inviting Russian companies, Prabowo Subianto said. By the way, there are already agreements with other countries: Vladimir Putin announced plans for the Russian Federation, together with Bahrain, to create a hub for the export of Russian wheat, and South Africa agreed on the import of Russian vodka to the republic.

— My colleague from South Africa said that vodka supplies [from Russia] to the Republic of South Africa have already been established. You know, this is a very right and serious step. Why? Because if you drink vodka, as we say, you have to have something to eat. Therefore, this will probably be followed by supplies of meat products or grain supplies," the head of state joked.

International arteries passing through the country's territory can be developed thanks to a new modern technological base: Putin spoke about the creation of a national digital transport and logistics platform. This will digitalize the entire Russian transport network, including road, air, rail, river and sea transport.

— It will combine several services: This includes the state information system for transport and economic balance, GISLOG, where logistics functions will be combined. Also electronic shipping documents. We are currently working on the creation of intelligent checkpoints with the state border. Together, this will form a national digital transport logistics platform," Roman Starovoit, Minister of Transport, told Izvestia.

In general, the Russian economy is coping with the challenges successfully, despite the sanctions, from which the EU lost €200 billion. Thus, Russia's GDP has grown by more than 4% annually over the past two years, which is higher than the global average. Currently, the country ranks fourth in terms of gross domestic product. At the same time, the increase in non-oil and gas GDP in 2023 turned out to be 7.2%, and in 2024 - 4.9%. Thus, the idea of the Russian economy as exclusively based on raw materials is clearly outdated, Vladimir Putin noted.

The president called the transition of the economy to a balanced growth trajectory with moderate inflation and low unemployment the main task for next year. At the same time, the situation with rising prices is developing better than the forecasts of experts and even the Central Bank. This has already allowed for a careful easing of monetary policy. As of June 16, the inflation rate was 9.6%. "Of course, this is still a lot, but inflation targeting continues," Putin explained.

Speaking about unemployment, the president stressed that over the past four years, the number of people employed in Russia has increased by 2.4 million, and today unemployment stands at 2.3%, which is a historic low. In addition, Russia has become one of the best countries in the world in terms of youth unemployment — 7.5%. For comparison, in France and the UK, this figure is 16% and 11%, respectively. By the end of last year, the poverty rate reached a historical record, amounting to 7.2%. If 42.3 million people lived below the poverty line in the 2000s, and the figure itself was 29%, today their number has decreased to 10.5 million. "Of course, we must strive to reduce this figure, and we are going to do so: to reduce it to 7% and further to 5%.", — Vladimir Putin explained.

Conflict resolution in the Middle East

Regarding the conflict in the Middle East, Russia's position is that the security of some countries should not be ensured at the expense of the security of others, Vladimir Putin stressed. Moscow already has a number of proposals on how to stop the fighting that has begun.

"By no means, and I would even like to draw your attention to this, are we seeking mediation, but we are simply offering ideas, and if they turn out to be attractive to both sides, we will be only happy about it," the President said.

He also did not rule out that the countries of the Global South could influence the resolution of the conflict in the Middle East.

At the same time, Russia maintains relations with both Israel and Iran. Thus, almost 2 million immigrants from the former USSR and the Russian Federation live in the Jewish state, Putin recalled. "This is almost a Russian—speaking country today," he said, adding that Moscow takes this factor into account.

At the same time, Russia has traditionally developed friendly and allied relations with the Arab and Islamic world. The Kremlin supports Iran in the struggle for its legitimate interests in the peaceful atom. Thus, Russia continues to work at the Bushehr nuclear power plant in Iran and has signed a contract for the construction of two more nuclear reactors.

According to the Russian president, the Russian Federation has asked the leadership of Israel and the United States to ensure the safety of personnel at the station. "I want to say that Prime Minister [Benjamin] Netanyahu agreed with this. And President [Donald] Trump promised to support our legitimate demand," Vladimir Putin said.

He added that due to the escalation of the conflict in the Middle East, world oil prices have increased: "Now it is $75 per barrel, and it was $65 — the price has increased by $10 and has stabilized at this level." According to him, the OPEC+ partner countries are monitoring the development of the situation, but their prompt response is not required yet.

Thus, despite the complexity of the situation, Moscow continues to defend its position on the settlement of the Middle East conflict at the United Nations. It corresponds to the interests of both Iran and Israel, the head of the Russian Federation emphasized.

Commenting on the criticism in the Western media, Putin asked a counter question. "Who says we should have done more — what more? Start some kind of combat operations, right? We are already conducting combat operations with those whom we consider to be opponents of the ideas we defend, and [those] who pose a threat to the Russian Federation," he added.

What does Putin think about the risks of World War III

A significant part of the session was devoted to the Ukrainian crisis. The President once again began his answer to the question about the development of the conflict by repeating the prehistory of the beginning of the conflict. In his opinion, the main reason lies in the repeated expansion of NATO to the East, which eventually led to a threat to the security of the Russian Federation. The President added: Moscow has never questioned Ukraine's sovereignty. At the same time, the country's independence is based on a declaration that prescribes its neutral and non-aligned status. The support of the LPR and DPR, as well as the start of the special operation, were necessary to protect the local population, the president stressed.

The Russian leader recalled that Moscow offered to make peace almost immediately after the outbreak of hostilities, but Kiev refused. "At every stage, we suggested that Ukraine stop," Putin explained.

But Ukraine not only rejected peace proposals, but also launched an operation in the Kursk region. According to its results, the Ukrainian Armed Forces lost 76 thousand soldiers and were forced to retreat under the pressure of the Russian Armed Forces. At the same time, the Ukrainians continued their attacks along the entire line of contact. As a result, Russia has decided to create a buffer zone in the Sumy region. Its planned depth is 10-15 km along the border with Ukraine. "We don't have a goal to take the Bags, but I don't rule it out," the president added.

Vladimir Putin's similar statement was made against the background of the withdrawal of Russian troops to the suburbs of Sumy and the evacuation of government institutions from the city by the Ukrainian side, Tigran Meloyan, an analyst at the HSE Center for Mediterranean Studies, told Izvestia.

— Prior to this, the Russian president had repeatedly talked about the possibility of creating a buffer security zone, which was dictated by the logic of the ongoing enemy attacks in the border area and the appearance of long-range weapons in Kiev. Today, this issue is most acute, given the recent terrorist attacks on the railway in the Bryansk and Kursk regions. Moreover, by expanding the "sanitary zone" deep into Ukraine, Russian troops are depriving the Ukrainian Armed Forces of important strongholds, one of which is Sumy. To occupy Sumy means to deprive the enemy of the opportunity to carry out future expansion into the Belgorod region and prevent a repeat of the attack in the Kursk region," the expert added.

Vladimir Putin also expressed the hope that the conflict would not reach the use of a "dirty" nuclear bomb by Kiev. At the same time, according to him, Russia has no information that such weapons exist in Ukraine.

In this context, the Russian leader admitted that he was concerned about the world sliding towards World War III, including due to the confrontation between Iran and Israel, as well as the conflict in Ukraine. "We always respond to all threats in a mirror manner, so our response will be very harsh and disastrous for the neo—Nazi regime and Ukraine itself," he concluded.