Andrey Vandenko
Stability or stagnation? How does economic stability differ from stagnation?
Vladimir Putin
It is very simple. Economic stability is the foundation for development. All in all, stability is always the foundation for development, while stagnation is basically backpedaling, without any development. That is the main difference.
Andrey Vandenko
Look, during the first decade of your tenure everything was booming.
Vladimir Putin
Yes.
Andrey Vandenko
Well, great.
Vladimir Putin
Yes.
Andrey Vandenko
Then, around 2008, we set off on bolstering our health by jogging in place.
Vladimir Putin
Well, firstly, it is truly strengthening (I’ll get to that – it is important), secondly, the question was at what benchmark did we start from in 1999 and 2000. It was minimal, in fact, pittance. Because then, if we begin with the key issue here, 42 million people lived below the poverty line. A third of the country’s population. Nowadays this number is still high.
Andrey Vandenko
17... 15...
Vladimir Putin
13.5 million. This is not a third, nor is it 42 million. Nevertheless, it is still a lot. And we must combat this. Back then, the gold and forex reserves stood at 12.5 billion dollars, and the national debt came to 145 billion. There was no end in sight, it was unclear how to sort it out. Since then and till now… Once I say this, people may start having doubts, but it is a fact, actual wages have grown by 4.2 per cent. Pensions have almost tripled (2.9 times). Actual incomes have jumped 2.4 times.
Andrey Vandenko
You mean since 2000?
Vladimir Putin
Yes. Since 2000.Those are definitely real things. Now, this does not mean that everything is fine today. Not at all. On the contrary. Moreover, people don’t make comparisons with what it was like before, when it was bad, but rather with how good it is supposed to be in the future. When they see that their desires are not fulfilled, they feel let down. Frankly speaking, I agree with this perspective.
Andrey Vandenko
What is more, you made a promise. In 2008, we heard that by 2020 the average wage would be around 2,700 dollars. A family of three would have a 100-square-meter apartment…
Vladimir Putin
Well, this is not quite correct. Those were preliminary plans.
Andrey Vandenko
Yes, plans. The so-called 2020 Strategy.
Vladimir Putin
We planned to double our GDP by 2008 and based on this we carried out our social planning accordingly. In 2008, we had practically reached our goals. Then, the 2008 global financial meltdown struck (not by any fault of ours, it came from beyond our borders). Thus, a far more urgent task popped up that we had to tackle. I want to remind everybody that here it was essential to prevent the economy from collapsing and the public’s savings from being wiped out. This was in 2008. I became Prime Minister then and had to publicly announce – this was a huge risk, frankly speaking – I announced that…
Andrey Vandenko
The risk was you being Prime Minister?
Vladimir Putin
No, that’s not what I said. What I said was this: I stated … I stated that I would prevent a repeat of the 1998 crisis, when all of the public’s savings had been wiped out… And we prevented that. But, indeed, it harmed our development. Honestly, here we were not to blame for that. That global financial meltdown and the economic crisis that followed it came from the outside.
Andrey Vandenko
I see. But incomes have been on the decline in recent years...
Vladimir Putin
True. We’re concerned about this, I’m deeply concerned that this sort of stagnation has hit incomes. Well, there is an explanation. First and foremost, it is connected with a drastic drop in energy prices. Everything kept growing as long as oil was at $100 per barrel or higher. Now it is $60. You see the difference, don’t you? It has practically halved. This explains why we launched these National Projects with the aim of changing the economy's structure and promoting self-sustaining development. But people can’t afford to wait for years, I understand this perfectly. I certainly understand that it is one of today’s key social issues. We are obliged to do something about this. The government is obliged to do something to give it a boost. There are many ways.
Andrey Vandenko
Does anyone bear personal responsibility for the falling revenues and the rise in poverty? The number of the poor has been on the rebound.
Vladimir Putin
Well, there were 13.4 million, now there are 13.5 million. The difference is not very big, but it does exist…
Andrey Vandenko
a hundred thousand.
Vladimir Putin
These are real people. True.
Andrey Vandenko
So about personal responsibility …
Vladimir Putin
There are also external circumstances. It’s… What can be said about personal responsibility at a time when world oil prices have slumped? What can be said about personal responsibility, if …
Andrey Vandenko
But we wanted to wean [ourselves] off oil dependency …
Vladimir Putin
We wanted to do that, and we are gradually weaning off it, by the way. We are really moving away from it, because the share of non-oil and non-gas revenues is growing. But this requires time, and it cannot be done at the drop of a hat.
Andrey Vandenko
Well, you see, people… There’s been a lot of talk about inflation and reducing it, but people are more concerned about what they have in the fridge.
Vladimir Putin
Right.
Andrey Vandenko
Macroeconomic numbers may look nice, but…
Vladimir Putin
Try to see my point. The point is that low inflation means that prices go up very slowly or do not rise at all.
Andrey Vandenko
But they do go up.
Vladimir Putin
But slowly! Since the 2000s, that’s where you started from...
Andrey Vandenko
You did.
Vladimir Putin
Well, 20 questions, and that’s literally from where you got the ball rolling...
Andrey Vandenko
All right.
Vladimir Putin
They go up very slowly. In the early 2000s, the period you began with, in 2000, we had an inflation rate of 20.5 percent or so. And in 1999, when I became Prime Minister, it was 36 percent, or 35 percent I believe. And in 1992, inflation was 2,600 percent. Now it is hovering around 3.4 to 3.5 percent. And that includes food prices. And people feel the bite of rising inflation since prices increase, taking a toll on people's wallets. It's another thing that along with targeting inflation, the public’s disposable incomes need to be raised. It’s obvious. It’s quite obvious. And in the context of our economic structure that’s not that simple. But the government is certainly obliged to undertake additional efforts. This is precisely what we are discussing today.
Sources: Russia’s Ministry of Finance, the Federal State Statistics Service (Rosstat), the Central Bank of the Russian Federation, investing.com.