The ‘Russian Threat’ to Europe and Why the Soviet Union Collapsed
Russian-US Cooperation
Russia and the United States have many areas of common interest, and Moscow is ready to increase cooperation with Washington as far as the US side is willing to do so, President Vladimir Putin has said.
“How do we plan to build relations? I believe that we have many common interests with the United States. The United States is a great country,” Putin said, speaking at the Russia Calling! forum.
“We have always treated and continue to treat the United States with respect. We were allies in two world wars. This is our common history, and it is a positive history. Of course, we would like to cooperate both in the technological sphere and in the economy as a whole,” Putin noted.
According to the Russian president, Russia and the US have common interests, both economically and in international affairs. The latter includes their joint status as the world’s major nuclear powers, as well as common interests in the fight against terrorism.
Russia, Putin said, is prepared to increase cooperation with the US “as far as our American partners are prepared to do so.”
Use of National Currencies for Trade With China
Putin also commented on the potential to further increase the volume of ruble-yuan trade with China, saying he believed it was “absolutely realistic” to increase such trade.
“The stability of China’s currency is obvious, and this of course creates the prerequisites for the wider use of the renminbi in settlements. In this regard, I would like to point out that in Russia, the ruble is a freely convertible currency, in any amount and at any time. It’s very convenient for use. The combination of these positive factors makes it absolutely realistic to increase trade in national currencies,” Putin said.
Growing Foreign Investor Demand
At the forum, the Russian president also touched on a series of economy-related topics, ranging from the need to increase Russians’ real earnings and living standards, to labour productivity, improvements to the work of law enforcement, and what he said was “strong interest” among foreign investors in Russia’s stock market.
“Judging by the dynamics of the stock market, Russian assets, domestic producers, companies and their capabilities are of great interest to our colleagues, to our partners, to investors,” Putin said, pointing to the Moscow Stock Exchange’s recently set record capitalisation of over 48 trillion rubles. “It is important that interests in financial assets be transformed into investments into real assets, in the opening of new industries and jobs, in the foundation of promising market niches,” he added.
Import Substitution
In 2014, as a result of the Ukraine crisis, the United States and its allies introduced several rounds of sanctions on Russia, and limited its ability to import various technologies and advanced industrial goods. Speaking on this topic at Wednesday’s forum, Putin noted that in the past five years Russia has succeeded in improving its “economic and technological sovereignty.”
“I can say frankly and openly today that after the first steps were taken in the sanctions list [in 2014], I did have a certain sense of alarm,” Putin said. But today, he noted, “a very serious and major step has been taken in increasing our economic and technological sovereignty. And in this sense all these restrictions have only benefited our economy.”
Green Energy
Putin also commented on the topic of the environment, and the need to improve the share of green energy in Russia’s energy balance.
“Our civilisation is developing quite actively. Nobody wants to see a situation in which humanity returns to living in caves as a result of this development, either as a result of an environmental collapse or some other unforeseen circumstance. Therefore, we in Russia, as responsible people, will strive to ensure that the energy balance, at least here in Russia, is as green as possible,” he said.
According to the president, Russia’s energy balance is already one of the greenest in the world.
Russia’s Energy Potential
At the forum, Putin also commented on energy economics. In his view, Russia today is an energy power which has a serious impact on the global energy market, but can achieve a greater impact if it works together with other major producers to reach common goals. “Only coordinated steps can lead to the optimal effect for global energy markets,” he said. According to Putin, Moscow will continue to work toward achieving this goal with Saudi Arabia, other Gulf countries, and other OPEC producers.
Putin also commented on what he felt was the undercapitalisation of Russian gas giant Gazprom, saying that its economic growth potential was “difficult even to calculate.”
“The company has the largest reserves in the world. It has the largest reserves in the world,” Putin noted. “Gazprom has the biggest potential for development among the world’s energy companies.”
Gazprom’s market capitalisation, presently valued at about 6 trillion rubles, (or $94 billion), reached its historical maximum in 2008, with a value of about 8.7 trillion rubles ($369 billion at the then-current conversion rate).
Putin also commented on the US’s aspirations as an energy power, including its shale production, noting Russia does not consider the US a competitor in the energy sector. “They occupy certain niches, but not ours,” Putin said. “According to our experts, US shale production has been ‘put on the shelf’ right now... We do not expect serious growth,” he said.
The ‘Russian Threat’ to Europe and Why the Soviet Union Collapsed
At the forum, perhaps unexpectedly, Putin also commented on broader geopolitical and historical issues, including the US attitude to its NATO allies in Europe and the collapse of the USSR.
“Up to this point, the United States said to the Europeans: ‘We are here as an umbrella against the Soviet threat, and you must pay us for this’. Today this argument doesn’t work very well,” Putin suggested. “Therefore, the United States will have to take some sort of steps to change the character of its relations with its allies, including even in the framework of NATO. But it’s not enough today to say ‘We protect you – pay up.’ Why will America’s allies pay to support the military-industrial complex and its jobs in the US? They will develop their own. They are already talking about it right now,” Putin said.
Earlier this month, French President Emmanuel Macron told The Economist that he felt the NATO alliance was presently experiencing “brain death” due to the lack of coordination between allies and the US’s unpredictability under President Donald Trump.
On the collapse of the US’s former Cold War adversary, the Soviet Union, Putin said it was the failure by that country’s leadership to transform the economy, not nationalism, which caused the country’s destruction.
“As far as the reasons for the collapse of the Soviet Union are concerned, this has little to do with the growth of nationalism in the Baltic countries, and at its core was the country’s very inefficient economic policy, which led to the factual collapse of the social sphere and had prolonged political consequences,” Putin said.
According to Putin, the People’s Republic of China has served as a much better example of an effective socioeconomic transformation, because the country was able to “make use of the capabilities provided by the central administration and the development of a market economy.”
“In the Soviet Union, nothing of the kind was done. And the results of the inefficient economic policy affected the political sphere as well. The consequences of the breakup proved much worse than people expected and what they could suspect even in their worst nightmares,” Putin noted.
