Ukraine, Russian Economy, Nukes
On October 5, Russian President Vladimir Putin addressed the annual Valdai Conference in Sochi. Sochi is the largest resort city in Russia and is located on the eastern shore of the Black Sea. The climate is almost subtropical but was the scene of the 2014 Winter Olympics. The greater urban population of Sochi is normally about 600,000 but over 7.0 million tourists are expected to visit there during 2023.
Putin began his speech talking about Russian civilizational values and the diversity of civilizational values around the world. According to Putin, the reality of the developing multi-polar international power structure is more conducive to freedom and economic development across the globe. He was critical of the United States in this, as he believes the United States is striving for single global economic and military hegemony and conducting its foreign policy in an arrogant and bullying way. His speech was modest in length and gave way to a much longer question and answer session, which is the discussion format of the international Valdai Club.
I will only quote and comment on a few areas: Putin’s explanation of the real cause of the Ukraine War, the Russian and European economies, and Russian nuclear weapons use policy. There was discussion of recent Canadian Parliament honoring of a former Ukrainian SS Nazi and the Nazi historical and ideological basis of a small but influential segment of Ukrainian political and military leadership. There was some interesting conversation about the majority Russian ethnic population of Odessa and the future of Odessa. Putin is also aware of recent political developments in the U.S. Congress regarding funding the “Ukrainia Project.”
Vladimir Putin on Ukraine:
“We are compelled to respond to ever-increasing military and political pressure. I have said many times that it was not us who started the so-called “war in Ukraine.” On the contrary, we are trying to end it. It was not us who orchestrated a coup in Kiev in 2014 – a bloody and anti-constitutional coup. When [similar events] happen in other places, we immediately hear all the international media – mainly those subordinate to the Anglo-Saxon world, of course – this is unacceptable, this is impossible, this is anti-democratic. But the coup in Kiev was acceptable. They even cited the amount of money spent on this coup. Anything was suddenly acceptable.”
“At that time, Russia tried its best to support the people of Crimea and Sevastopol. We did not try to overthrow the government or intimidate the people in Crimea and Sevastopol, threatening them with ethnic cleansing in the Nazi spirit. It was not us who tried to force Donbass to obey by shelling and bombing. We did not threaten to kill anyone who wanted to speak their native language. Look, everyone here is an informed and educated person. It might be possible – excuse my ‘disapproving tone’ – to brainwash millions of people who perceive reality through the media. But you must know what was really going on: they have been bombing the place for nine years, shooting and using tanks. That was a war, a real war unleashed against Donbass. And no one counted the dead children in Donbass. No one cried for the dead in other countries, especially in the West.”
“This war, the one that the regime sitting in Kiev started with the vigorous and direct support from the West, has been going on for more than nine years, and Russia’s special military operation is aimed at stopping it. And it reminds us that unilateral steps, no matter who takes them, will inevitably prompt retaliation. As we know, every action has an equal opposite reaction. That is what any responsible state, every sovereign, independent and self-respecting country does.”
“Everyone realizes that in an international system where arbitrariness reigns, where all decision-making is up to those who think they are exceptional, sinless and right, any country can be attacked simply because it is disliked by a hegemon, who has lost any sense of proportion – and I would add, any sense of reality.”
“Unfortunately, we have to admit that our counterparties in the West have lost their sense of reality and have crossed every line. They really should not have done this.”
“The Ukraine crisis is not a territorial conflict, and I want to make that clear. Russia is the world’s largest country in terms of land area, and we have no interest in conquering additional territory. We still have much to do to properly develop Siberia, Eastern Siberia, and the Russian Far East. This is not a territorial conflict and not an attempt to establish regional geopolitical balance. The issue is much broader and more fundamental and is about the principles underlying the new international order.”
“Lasting peace will only be possible when everyone feels safe and secure, understands that their opinions are respected, and that there is a balance in the world where no one can unilaterally force or compel others to live or behave as a hegemon pleases even when it contradicts the sovereignty, genuine interests, traditions, or customs of peoples and countries. In such an arrangement, the very concept of sovereignty is simply denied and, sorry, is thrown in the garbage.”
“The way other states run their lives is none of our business. However, we see how the ruling elite in many of them are forcing societies to accept norms and rules that the people – or at least a significant number of people and even the majority in some countries – are unwilling to embrace. But they are still urged to do so, with the authorities continually inventing justifications for their actions, attributing growing internal problems to external causes, and fabricating or exaggerating non-existent threats.”
“To attain these goals, they try to replace international law with a “rules-based order,” whatever that means. It is not clear what rules these are and who invented them. It is just rubbish, but they are trying to plant this idea in the minds of millions of people. “You must live according to the rules.” What rules?”
And actually, if I may, our Western “colleagues,” especially those from the United States, don’t just arbitrarily set these rules, they teach others how to follow them, and how others should behave overall. All of this is done and expressed in a blatantly ill-mannered and pushy way. This is another manifestation of colonial mentality. All the time we hear, “you must,” “you are obligated,” “we are seriously warning you.”
Regarding the U.S. Congress, Putin said: “Eventually, they will probably find the money, and print some more. They printed over $9 trillion during the pandemic and post-pandemic period, so they will not think twice about printing more and spreading it worldwide, thereby exacerbating food inflation. They will most likely do that.”
“As for Europe, the situation there is more difficult because, if in the US, we still see GDP growth of 2.4 percent in the previous period, in Europe the matters are far worse. In 2021, their economic growth was 4.9 percent, and this year it will be 0.5 percent. And even this growth is mostly due to the southern countries, Italy and Spain, which showed some growth.”
“The main economies of Europe are currently experiencing stagnation; and most manufacturing sectors are showing negative results. In the Federal Republic of Germany, it is minus 0.1 percent; in the Baltic countries – minus 2, or even minus 3 percent in Estonia, I believe; in the Netherlands and Austria, it is also dropping. This is particularly true of industrial production, which is in a critical condition, if not a disaster, especially the chemical, glass and metallurgy sectors.”
“We know that due to relatively cheap energy prices in the United States and some administrative and financial decisions made there, many European production facilities are simply moving to the United States. They shut down in Europe and relocate to the US. This is a well-known fact, and this is what I hinted at some time earlier, when speaking at this forum. The burden is also growing on the people in the European countries, and this is also a fact, as confirmed by European statistics. The quality of life is getting worse, and was reduced by 1.5 percent over the past month, if I am not mistaken.”
“Can Europe manage or not? It can. But how? At the expense of the further worsening of its economy and the lives of the people in the European states.”
Moderator, Fyodor Lukyanov: But our budget also cannot cover everything. Will we manage, unlike them?
Vladimir Putin: We are managing so far, and I have reason to believe that we will do so in the future. In the third quarter of this year, we had a budget surplus of over 660 billion rubles. This is the first thing.”
“Second. By the end of the year, we will see a budget deficit of about 1 percent. Our calculations show that in the next few years (2024 and 2025) the deficit will be about 1 percent. We also have a record-low unemployment rate – it stabilized at 3 percent.”
“Another important thing – this is a key moment and perhaps we will return to it again, but I believe it’s an important and fundamental phenomenon in our economy – that a natural restructuring of the economy began, because what we previously imported from Europe was cut from us, and like in 2014, when we introduced certain restrictions on the purchase of Western, European, primarily agricultural goods, were forced to invest in the development of agricultural production within the country. Yes, inflation has surged, but we then ensured that our manufacturers increased production of the goods we needed. And today, as you know, we fully cover our needs in all the basic agricultural products and basic types of food.”
“The same is now taking place in industry, and the main growth is in the manufacturing industries. Oil and gas revenues have dropped, but they are also providing an additional 3 percent, and non-oil and gas revenues, primarily in the processing industries – 43 percent, and this is primarily the steel industry, optics, and electronics. We have a lot to do in the field of microelectronics. We are really still at the beginning of our journey, but it is already growing. All together it gives a 43 percent increase.”
“We are rebuilding logistics; mechanical engineering is growing, and so on. Overall, we have a stable situation. We have overcome all the problems that arose after the sanctions were imposed on us and we began the next stage of development: on a new foundation, which is extremely important.”
“We do have some problems, including a labor shortage, that’s true, followed by some other issues. But our population’s real disposable income is growing. While it is dropping in Europe, in Russia it grew by more than 12 percent.”
“Here, our own issues include inflation, and it has grown now it is 5.7 percent, but the Central Bank and the Government are taking concerted measures to neutralize these possible negative consequences.”
“Look, our defense spending has indeed increased, but it encompasses more than just defense and also includes security. These expenses have approximately doubled, going from around 3 percent to approximately 6 percent, encompassing both defense and security. However, I would like to emphasize, as I previously mentioned and feel compelled to reiterate: we have achieved a budget surplus of over 660 billion rubles in the third quarter, and we anticipate a mere 1 percent deficit for this fiscal year. This is an overall healthy budget and a robust economy.”
“Let me remind you that there are two reasons stipulated in the Russian Military Doctrine for the possible use of nuclear weapons by Russia. The first is the use of nuclear weapons against us, which would entail a so-called retaliatory strike. But what does this mean in practice? The missiles are launched, our early warning system detects them and reports that they are targeting the territory of the Russian Federation –this happens within seconds, just so that everyone understands – and once we know that Russia has been attacked, we respond to this aggression.”
“I want to assure everyone that as of today, this response will be absolutely unacceptable for any potential aggressor, because seconds after we detect the launch of missiles, wherever they are coming from, from any point in the World Ocean or land, the counter strike in response will involve hundreds – hundreds of our missiles in the air, so that no enemy will have a chance to survive. And [we can respond] in several directions at once.”
“The second reason for the potential use of these weapons is an existential threat to the Russian state – even if conventional weapons are used against Russia, but the very existence of Russia as a state is threatened.”
American and British media give scant coverage to Putin’s articles and speeches. Most of what the American public know about Putin is U.S. State Department and CIA propaganda going back at least to 2008. According to former CIA analysts, a large part of this demonization of Putin was originated under Hillary Clinton and CIA Director John Brennan.