Meeting of State Council Presidium on export development

President of Russia Vladimir Putin: Good afternoon, colleagues,

We have a very important topic for today's meeting of the State Council Presidium, and we will discuss it with the heads of Russian regions, senior Government officials, ministers and heads of various agencies. It matters a great deal for our regions, cities and entire sectors of the Russian economy. I am referring to the steps we must take to expand our national export potential.

You all know that Russia has been active in its foreign trade operations. Russian businesses have been facing objective challenges. Nevertheless, we have been expanding our foreign business ties and broadening our geographic reach by strengthening our cooperation with predictable and reliable partners who, just like Russia, pursue their national interests and appreciate mutually beneficial relations in trade, manufacturing and cooperation.

Let me note the radical changes that global trade and the global economy in general are going through. We have discussed this quite a few times already, and everyone is aware of these developments and understands them. We are witnessing the emergence of a new system of relations with the countries of the so-called Global South increasingly playing a leading role within this framework. These are emerging economies, and they are part of promising integration structures like BRICS.

The share of BRICS countries in global GDP has already exceeded the same indicator for the G7, and counting. This trend is gaining traction and will continue. Just for reference, and I myself was curious to discover these statistics, here is what the G7 represented back in 1992 - its countries accounted for 45.5 percent of global GDP. However, in 2022, its share was down to 30.5 percent. Therefore, its share declined from 45.5 percent to 30 percent and is expected to be 27.9 percent in 2028.

But what about the BRICS countries? BRICS, without taking into consideration its newcomers, accounted for 16.7 percent of global GDP in 1992, but in 2022 this share reached 31.4 percent, and is expected to reach 33.8 percent in 2028. This trend is real and it will not go away. It is an objective process that has nothing to do with any momentary considerations or even conflicts, including the one we all have on our minds. Once we include the new BRICS participants, this changes everything, bringing the 2028 forecast to 38 percent of global GDP.

This means that we are witnessing the emergence of forward-looking markets based on solid, strategic partnerships and the notion of integrating economic capabilities and promoting mutually reinforcing growth.

It is important not only to understand these trends but also to enjoy the advantages and export opportunities that are emerging for our businesses and enterprises. It is necessary to assist them at all levels.

As you know, a six-year national project to support exports will be completed this year. During this period, we have established tools, including those in the Russian Federation constituent entities, that help our companies supply products abroad. These tools allowed them to cope with the pandemic phase and to reroute commodity flows to promising growing markets.

During our meetings with representatives of the business community, it was repeatedly suggested that the national project to support export be extended, and we agreed that this would be done.

Next year, we are launching an upgraded national project called International Cooperation and Exports. The export performances, the economic development priorities facing our country and, of course, the objective global trends I have just mentioned should serve as the foundation for its decisions, solutions, measures and mechanisms.

In this connection, I would like to note that it is necessary to facilitate more efficient financial and information support for export operations in order to ensure the confident, long-term development of foreign economic ties. It is also essential to actively establish the logistics and transport infrastructure, as well as production cooperation platforms.

At the same time, it is highly important that we incentivise Russian companies to enter markets offering value-added goods and to expand non-resource non-energy exports, including deliveries of goods from the machine-building sector, food and so on.

I would like to note that, in 2021-2023, Russia increased its non-resource non-energy exports more than four-fold. Four-fold, not just a few percent, is a commendable result, the growth from US$36 billion to US$148 billion. Of course, this is not the limit for us; in reality, this volume is not that high.

In the first seven months of 2024, non-resource non-energy exports continued to grow, gaining five percent and reaching US$89.8 billion.

Russia already ranks among the leading global exporters in certain sectors, including food deliveries. Of course, this result has been primarily facilitated by specialists and staffs of enterprises, as well as development institutions, regional leaders and federal agencies supporting them.

In my Address to the Federal Assembly, and later in the Executive Order on national development goals, I set a benchmark. By 2030, non-resource non-energy exports must increase by at least two thirds compared to 2023. This is an ambitious objective, especially considering the challenges our companies have been facing lately.

The first challenge concerns carrying out settlements. Of course, we all know everything there is to know about this. Western elites have taken outrageously hostile actions targeting Russian financial institutions and payment systems making it harder for them to receive payments for the exports and to pay for imported goods.

To a certain extent, we have succeeded in overcoming this issue. Last year, the share of transactions involving Russian exports denominated in the so-called toxic Western currencies decreased by a factor of two, while the share of ruble-denominated transactions in our foreign trade operations is approaching 40 percent. Between 2021 and 2023, the share of export-related settlements in rubles almost tripled, reaching 39 percent, while the share of ruble-denominated import transactions increased by another two percent, reaching a total of 30 percent.

We continue moving in this direction and have been working with our colleagues abroad to make wider use of our national currencies and to process transactions by relying on payment clearing systems, platforms, and so on.

It is obvious that we need time to deliver on these objectives, since our leading trade partners are deeply integrated into the existing international financial system.

That said, the whole world is currently working on building the so-called supra-national payment infrastructure. Let me emphasise that there are many countries and regions around the world who have been working hard on these matters to be able to use digital currencies issued by their central banks and digital financial assets. This would offer a permanent and reliable solution operating independently of third countries. Let me stress that others are also moving in this direction, and we are not the only ones doing so in connection with the developments we all know. This is happening around the world and has become mainstream for many regions, including the Middle East and Asia. Everyone is thinking about it and coming up with various solutions.

The second point I wanted to raise concerns the growing transshipment, shipment and insurance costs, as well as other expenses for our exporters. This has a direct bearing on the price of goods made in Russia and therefore affects their competitiveness in the global market.

To be continued.

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