Putin says Russia's economy starting to develop according to 'new model'

MOSCOW

Russia's economy is starting to develop according to a "new model," President Vladimir Putin said Thursday.

Speaking at the congress of the Russian Union of Industrialists and Entrepreneurs (RUIE) in Moscow, Putin thanked businessmen, enterprises and workers for their contributions to the development of the country.

Putin noted that the RUIE is actively involved in the "nationwide agenda" and has its own views, opinions and proposals, which is particularly important at a time when Russia, due to sanctions, has "started developing according to a new model."

He said Russia experienced a maximum decline in its GDP of 4.7% last June.

"The reasons for this are well-known -- the sanctions war and the unprecedented challenges in the global economy and trade as well as in the system of international relations as a whole, and it was not us, as you know, who was creating these problems.

"These are challenges that neither Russia nor probably any other country in the world has yet faced in modern history," he emphasized.

Putin noted that Russia is aware of people who give tips on sanctions to Russia's "ill-wishers," hinting at tycoons that had earned their fortunes in the country but then left it and now live in the West.

"We know -- and I will tell you like family -- there are people who are advising our ill-wishers on how and where to hit us harder. But those who have stayed here and are really working have proved to be smarter, more vigorous and effective than those who left and are giving such advice to our ill-wishers," he said.

Since the most difficult period, the Russian economy has transited to growth, Putin said.

Among the factors that prompted the improvement, the Russian president named the expansion of foreign trade, growing domestic demand and decreasing inflation, which is expected at a level of 4%-5% in March.

"Incidentally, I would like to add for reference that on the whole, Russia’s 2022 foreign trade surged by 8.1% to $850 billion, including exports by almost 20%, with imports declining by almost 12%. The trade balance surplus was $332 billion, or 70% more than in 2021," he said.

Regarding forecasts of poor harvests in the West due to drought, Putin said if there were no sanctions against Russian fertilizers, European farmers could have used them to increase their crop output.

"This calls to mind a Russian proverb: ‘He who digs a pit for others falls in himself.’ It seems that this is exactly what is happening," he noted.

Putin also said that the departure of Western companies opened possibilities for Russian businesses and called on entrepreneurs to use the opportunity.

He also said that for economic growth, it is necessary to build up production facilities, open new enterprises and create jobs throughout the country.

"I am well aware of the threats that are arising. I know what the ill-wishers are pointing out to us, that Russia will face problems in the medium term," he said.

Putin said that to avoid negative scenarios, it is necessary to work on issues of logistics, finances, infrastructure and technologies.

He also offered to establish an annual award for the most responsible domestic companies and to make public how companies contribute to the development of their sectors.