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Putin says global economy faces systemic challenges, no time for quarrels

Vladimir Putin stresses Russia seeks dialogue and cooperation in solving the most important strategic issues of global development

ST.PETERSBURG, June 2. /TASS/. The world’s economy faces systemic long-term challenges and there is no time for quarrels, there is the need to unite efforts, Russian President Vladimir Putin said at the plenary session of the St. Petersburg International Economic Forum.

"We face systemic long-term challenges, and it is difficult now to calculate the consequences and make forecasts. We should not do that, we don’t have the right to fritter away our resources, waste effort and time for quarrels, discords and geopolitical games," Putin said.

he world countries need "wisdom, responsibility, a joint search for non-standard solutions, new formats of cooperation between countries, regional integration unions, businesses and scientific community, there is the need to make the most of the potential of such a unique universal organization as the UN," he said.

Russia seeks dialogue and partnership, and is open for joint work, implementation of mutually beneficial projects and cooperation in solving the most important strategic issues of global development, the president said.

"Only together, through uniting efforts, we can overcome the current misbalances and ensure a stable growth of global economy, elaborate just rules of trade and fair competition, level down poverty, cope with terrorism threats, regional conflicts and the spread of nationalism and xenophobia," he said.

Putin also stressed that the world is already facing civilizational challenges, and "the impact on the ecosystem of the planet is increasing both due to human actions and natural processes."

Growth phase

Putin believes that the national economy has entered a new growth phase and he is determined to support this trend.

"The economy is entering a new phase of growth. The basis for its future development is being shaped," Putin said. In his opinion "it is essential to support and speed up all these positive trends in order to achieve outpacing growth rates above the world ones in 2019-2020."

The Russian leader believes that "greater investment activity, in the first place, by private businesses, is the key factor."

"We have already done a great deal to update federal legislation, to lift administrative hurdles and to optimize control and supervisory procedures and functions. According to international experts, Russia over the past five years showed better dynamics of improving the business climate than other countries. We have been up 80 points," Putin said.

Investment mechanism 

Putin calls to improve a mechanism of a special investment contract and extend its timeframe from 10 to 20 years in particular.

"I suggest thinking about improvement of this mechanism [special investment contracts]. It is basically functioning but it requires improvements; it should turn into an efficient tool. For example, the timeframe of special investment contracts can be extended from 10 to 20 years; an opportunity should be provided for flexible participation of not merely federal government authorities, regions and investors, but also development institutions, banks, natural monopolies and other entities," Putin said.

"In the Q1, inflow of foreign direct investment into the Russian economy amounted to $7 bln. I would like to note that this is the best indicator for the corresponding period in the last three years," Putin said.

Putin noted that the digital economy is "the base that allows creating qualitatively new models of business, trade, logistics, production, changing the format of education, public health, public administration, communication between people, and consequently - sets a new paradigm for the development of the state, society. Thus, we will develop our economic and technological policies, industry, infrastructure, form an open, free business environment, flexible labor market, solve tasks that will ensure long-term growth," Putin said.

"We can say now that the economy has begun a new phase of recovery - Russia's GDP has been growing for the third consecutive quarter. According to preliminary estimates, in April growth has already reached 1.4%, car sales and mortgage loans are increasing," the President said. According to Putin, "Today we have almost reached the inflation target. We expect that by the end of the year it will be below 4%. Thanks to this, the Russian Central Bank is gradually reducing the key rate," he added. Putin referred to the opinion of foreign forum participants who note "the high quality of Russian macroeconomic policy."

Mechanism of syndicated loans

Putin has urged the adoption of amendments to make the mechanism of syndicated loans raising more flexible.

"I’m asking the government and the Bank of Russia to speed up the promotion to the parliament of amendments to the legislation making the syndicated loans mechanism more flexible, in order to raise funds from various investors, banks, investment companies, pension funds to projects," he said.

According to President, this will allow to ensure a substantial increase in private financial resources to be invested in new projects in the real sector of the economy. He added that a whole set of instruments has been formed in Russia to support investment projects, and urged to establish a firm systemic background for the mechanism of project financing, and minimize risks for investors at all stages - from drafting projects to their implementation, including via partial granting of state guarantees.