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President Putin calls for business to take advantage of sanctions and ruble weakening

May 26, 2015, 16:40 UTC+3 MOSCOW
Import substitution is an opportunity to give impetus to further development in a number of areas, he added
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Russian President Vladimir Putin

Russian President Vladimir Putin

© Alexei Nikolsky/Russian presidential press service/TASS

MOSCOW, May 26. /TASS/. The weakening of the ruble and mutually imposed sanctions will have a time-constrained effect so exporters should take advantage of it before it’s too late, Russian President Vladimir Putin said at the Delovaya Rossiya business forum Tuesday.

"The current environment is not simple if not to say complicated," President said. "At the same time changes in the ruble exchange rate improves the price competitiveness of the local production, opens up new opportunities to take control over new niches both at the national and at the international level," he said, adding that "those opportunities may be time-constrained, and they should be taken advantage of properly and as quickly as possible in order to boost non-resource export and tap the local market."

Putin also called for the local business to tap the domestic market faster. "What should we be doing when our partners in some countries see the light? We will have to react somehow otherwise we will find ourselves in rather tough conditions within the WTO," he said.

Currently, the Government and the Ministry of Industry and Trade and the Agriculture Ministry in particular, are setting necessary development programs, Putin said, adding though that the efficiency of such measures will depend on the Russian business itself in the first place.

"I would ask the Delovaya Rossiya /public association/ and other organizations to submit particular proposals on what business needs to actively join the process of import substitution and seriously boost export potential of non-resource companies," President said.

Import substitution is an opportunity to give impetus to further development in a number of areas, he added. "Import replacement is not a panacea, we are not going to have a total import replacement - that's stupid and pointless," President said.

It is necessary to replace import "where it is completely clear that we can have our own competence either revived or recreated," Putin said. "This is what we have to strive towards and use the current situation, related to the foreign currency exchange difference and limitations that for some reason our partners have imposed," he said.

President cited the economic growth in China as an example, saying that the country "has taken advantages of its natural competitive strengths and is still doing it - meaning cheap workforce /almost 20 mln people join the labor market annually/ and inflow of investment, foreign in the first place, and technologies, which is the second /factor/ that ensured the reforms’ success."

Putin also spoke against creating administrative barriers for western companies, in particular from banning foreign companies from Russian government procurement.

"To totally exclude foreigners, taking advantage of the situation that our partners and competitors have put into our hands? Here we too have to be careful," President said. "Maybe we could do it, but do we need to totally deprive the domestic market of competition? Probably not," he added.

He went on to explain that "based on prices the domestic producer already has an advantage now." "Do we need to totally exclude foreigners? It is such a dangerous thing," he said.

The President does not consider it necessary to exclude state-owned companies from this system either. "We need to ensure that for the sake of small and medium business state-owned companies do not dominate the field," he said.

At the same time, Putin stressed that quality is a very important aspect for the consumer. He gave the American car maker Ford as an example. "He developed in his own time a mass production of cars, but not only due to the perfected assembly-line production, but also due to combination of the price of goods and the quality of the product, and it went into the masses. That is the golden rule for business and we shouldn't forget it," President Putin said.

The Delovaya Rossiya business forum is convened annually for discussing the most pressing economic problems. The issues on the agenda this time include the opportunities for Russian businesses on overseas markets, a new industrial policy, the philosophy of the common cause of business and government, and the problem of human resources in entrepreneurship.

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