By Sarah Lindemann-Komarova, Medium, 2/22/24

Two years into an SMO that no one expected or wanted, it has become a fact of life with two fronts, the battlefield and economic. The focus here is on economics and life after two years of Western sanctions. The headline is “moving on”.

According to the Levada Center, 75% of respondents look forward to 2024 with “hope”, 8% with uncertainty”, and 13% with “anxiety”. Inflation is real and felt but people are coping in part because of a labor shortage that has forced salary increases in the private sector. Public sector service jobs continue to lag behind, one of the reasons there are 12 vacancies at the Manzherok Village school and no full-time medical staff in the clinic. There are plans to build “social housing” for these professionals but a local entrepreneur does not think this will make a difference, “No one is going to work for that kind of money now”.

Sanctions are rarely mentioned. If they are, it is to reflect on how scary it was when they were announced followed by admiration at the soft landing Central Bank Head Elvira Nabiullina has pulled off. There is no arrogance in this assessment, just pride and a little bit of wonder. One businessman expressed a different kind of wonder, why the Europeans are signaling to investors and depositors around the world that Europe is not a safe place. He moved his money after receiving threatening messages from a Swiss Bank. It is now in Kazakhstan, Dubai, Cyprus and he is also investing in Russia.

During holiday shopping at a mall in Novosibirsk, a 22 year old translates: Pull & Bear = Dub, Maag = Zara, LS = Levi’s, etc. The massive IKEA remains empty but the French Leroy Merlin and Auchan continue on as always although Leroy Merlin appears to be assuming more and more IKEA product lines. The high prices were mitigated by surprisingly great pre-holiday sales up to 70% in most stores.

The Chinese are rapidly cornering the car market as the French, Germans, and Americans, who had factories in Russia, left with options to buy back. Chery was making deals and the dealership was full. The $30,000 + Tiggo ProMax 7 could be had for $11,000 with a Renault Duster trade-in. Haval was not making deals. During the test drive, salesman Emile from Azerbaijian explained the differences between the Haval Dargo (Big Dog in Chinese) made in Tula, 193 km from Moscow, and the Dargo X made in China. The opening of the Tula Great Wall Motor Company factory in June 2019 was a big moment celebrated in person by Xi Jinping and Putin.

Emile, also talked about getting his degree in Novosibirsk and spending two summers in Ocean City Baltimore on the Work and Travel Program. He liked America and considered staying, but decided it wasn’t for him. His family is here and “you can make money in the US but you have to work all the time. Here, you can take a few months off and do other things you want to do.”

Two weeks before the SMO began, the new, improved Tolmachevo International Airport opened. At that time there were regular flights to Prague, Seoul, and various German cities. The expectation was that this major expansion would support growth in the role of Novosibirsk as the human and cargo hub between east and west. Instead, the billowing columns in the massive new entrance hall are now only serving international travelers to and from Central Asia, Yerevan, Baku, China, and the transit gateways to the West, Dubai and Istanbul. They are also welcoming vacationers exploring newly popular domestic tourism destinations like Kamchatka, Vladikavkaz, Kaliningrad, Gorno Altaisk, and Vladivostok.

The weekly flight to one of those destinations, Kaliningrad, now requires a detour over Baltic Sea international waters. The Region is surrounded by Europe (Lithuania and Poland) and the air space was closed in response to the SMO. In June of 22, Lithuania announced a ban on sanctioned goods traveling to Kaliningrad. Russia objected and a month later, the EU issued some new guidelines that allowed the goods to move.

Despite the precarious location and intensification of the conflict, there was no trace of that turbulence or other possible threats in October 2023. In Kaliningrad, people were moving in and moving on. The cab’s children’s car seat and toys were not evidence of a caring grandfather, but a career change. The 50+ driver’s previous lucrative business was transporting goods from Lithuania. He sold his trucks, bought a baby seat, and moved on.

After life as Prussia and Poland, Kaliningrad was the German City of Konigsberg until 1945 when it was given to the Soviet Union in the Potsdam Agreement. Over the next couple of years German residents were expelled and people from other parts of the USSR moved in. That flow has continued generating a steady population increase since 1950. It has long been the destination for Siberians who want to stay in Russia but live in Europe or escape the cold climate. A young cab driver from Novokuznetsk moved three years ago because of the cold and bad environment in his native coal mining region. Initially he wanted to move to Petersburg, but he couldn’t afford an apartment and didn’t want to get a mortgage. He ended up mortgage free and happy in Kaliningrad.

Kaliningrad was a world class destination for tourists before options were limited. 13th century on, pick an era and you will find the most eclectic mix of sites including where Napoleon slept, a Cold War era submarine, Kant’s grave, and Blues Brothers statues outside a café/museum with record players from 1840–1940. There is also the resort town Zelenogradsk. Founded in 1252, in 2010 it branded itself a “cat town” and now features cat murals, cat traffic lights, cat food machines, even the war memorial had a white cat lounging by the flame.

On the way to the Kaliningrad flea market, selling everything from fish shot glasses to German helmets with bullet holes, the cab driver boasted that his Grandmother was one of the first people to move here in 1946. He goes on to say that everything is great. Yes, housing is twice as expensive but there is plenty of work if you are ready to work. He had no negatives about the current development boom. He is proud and excited for his 4th generation daughter’s future with huge investments going into culture, including affiliates of the Tretakov Gallery and Bolshoi Theatre, and education with apartments for teachers.

Others are less enthusiastic complaining about change, getting used to change, and the taming of what once were wild places. The gripes about the prices and congestion that come along with being a booming tourist destination. One cabbie/fisherman cited 4 hour summer traffic jams to get on the Curonian Spit, a 98 km. forested sand dune separating the Baltic Sea from the Curonian Lagoon. Half of the Spit is a National Park in Russia and the other half is in Lithuania.

Even the more ancient relics are coated with references to the Great Patriotic War (WWII). The 14th Century Konigsberg Cathedral was jam packed on a Tuesday night, hundreds of people paid 500 rubles to hear an organ concert. The building was partially destroyed, along with most of the City, by Allied bombing in August 1944. Passing remnants of forts and churches outside the City, the guide explained that none of the old buildings were damaged by bombs. Their semi-demolished state was the result of local inhabitants taking the bricks to build homes after the war. Most haunting are the remains of the Allenberg Psychiatric Hospital. It was the best in Germany before an SS Division affiliated with the Dachau Concentration Camp moved in and used it for experiments.

The path to moving on in Russia is often viscerally informed by national history. Two women reminded me of this when we discussed sanctions. One, born around the time Brezhnev and Nixon signed the first Strategic Arms Limitation Treaty, is a corporate executive. The other was born during Perestroika and recently moved her yoga business from Novosibirsk to Altai. They both grew up sharing bedrooms with brothers, sleeping on foldout couches with a table to do homework.

“40 jars of cucumbers, that was our record”, the younger woman boasted about summers spent helping her Grandmother in a Kazakhstan village.

The other responded describing her great-grandmother, “She never ever threw anything out. If someone left a little piece of bread, she would take it, dry it into a crouton, store it in a bag hanging from the kitchen door, and when others had bread, she would eat from the bag.”

Moving on is also bounded by the status quo and no one expects the sanctions will end even when the shooting stops. People here are more comfortable with the idea that nothing is perfect, there is always a work around so “Plan B” is built into the hardware, you adapt and keep going. Even today, for many like the corporate executive, the legacy of the impact from past western invasions came first hand, “There were two wars, one after the other, and there were no men so she had to be tough”.

Part Three: The Social Contract and the Next Gen

By Andrew Korybko, Substack, 3/18/24

President Putin declared in his re-election speech early Monday morning that Kiev’s cross-border terrorist raids and use of long-range Western weaponry to strike deep into Russian territory could “force” his country to establish a “sanitary zone” that he also described as a “security zone”. He first spoke about this in January, which was analyzed here, and his latest remarks follow former President and incumbent Deputy Chair Security Council Chairman Medvedev’s talk about Russia’s “strategic borders”.

The larger context within which this scenario is being contemplated is the prospect of a conventional NATO intervention in Ukraine via a “coalition of the willing” that would likely be led by France, the UK, and Poland if it happens with the predictable participation of the Baltic States as well. At the same time, CNN, the Wall Street Journal, and the Washington Post all finally admitted that Russia won the “race of logistics” with NATO after the New York Times was the first to acknowledge this last September.

In other words, the “worst-case scenario” from Kiev’s perspective might soon materialize whereby Russia’s lead in the “race of logistics” results in a breakthrough across the Line of Contact (LOC), which could prompt the “worst-case scenario” from others’ perspective of a conventional NATO intervention. The risks of sparking World War III by miscalculation would spike unless there’s a tacit understanding between NATO and Russia over how far west and east each would respectively go in that scenario.

Therein lies the importance of President Putin once again bringing up the possibility of establishing a “sanitary/security” zone in Ukraine since a compromise could be for the Ukrainian Armed Forces (UAF) to carry out as orderly of a retreat as possible over the Dnieper if Russia breaks through the LOC. Russia would then go as far as the administrative borders of its newly reunified regions short of crossing the Dnieper while NATO would stay west of the Dnieper as peace talks resume to formalize this deal. 

In that way, the risks of World War III being sparked by miscalculation could remain minimal, while the US and Russia could then hash out the details of Ukraine’s asymmetrical partition. NATO would establish a “sphere of influence” over the western half of the country, the West would tacitly accept Russia’s control over the four former Ukrainian regions that reunified with it in September 2022, while the rest of eastern Ukraine would remain under Kiev’s political control but become a demilitarized buffer zone.

The merits of this proposed compromise are that it meets some of each side’s interests but leaves space for the other party to agree to this by not accomplishing either of their maximalist goals. Russia secures its newly reunified regions and establishes a sanitary/security zone in the rest of eastern Ukraine, while Kiev clings to the alleged “legitimacy” of its pre-2014 borders and NATO formalizes its presence in the country. NATO and Russia would then balance each other along the new LOC and the Belarusian border.

Russia would have the advantage in the event that the Korean-like armistice that former NATO Supreme Commander James Stavridis suggested last November is broken since the demilitarized region in eastern Ukraine directly abuts Belarus, pre-2014 Russia, and its newly reunified territories in the south. Therein lies the reason for formalizing NATO’s presence in the western half of the country in order to reassure the bloc that Russia wouldn’t exploit this position to strike first lest they then retaliate in Belarus.

President Putin also acknowledged the presence of NATO forces in Ukraine during his re-election speech, hence the proposal for formalizing this in a way that reduces the risks of World War III by miscalculation such as if they conventionally intervened in a “Race to the Dnieper” if the LOC collapses. This could happen in parallel with the UAF retreating as orderly as possible over the Dnieper to demilitarize the rest of the eastern Ukraine in that event while Russia stays within its new regions’ borders.

This plan is admittedly dependent on: 1) an impending Russian breakthrough across the LOC; 2) that in turn prompts NATO to participate in a “Race to the Dnieper”; 3) which could raise the risks of World War III being sparked by miscalculation in a sequence of events that no responsible policymaker wants. It could of course be that no such breakthrough occurs, NATO doesn’t conventionally intervene if one does, or it intervenes with the intent of “escalating to de-escalate” by openly flirting with World War III.

If the military-strategic dynamics remain on track and the West is still led by “rational” leaders with an interest in preventing a nuclear apocalypse, then President Putin’s “sanitary/security zone” could lay the basis for a potential compromise aimed at responsibly managing Ukraine’s asymmetrical partition. A trusted mediator like the Pope and/or India should be relied upon by Russia to probe the West’s interest in this, which the US might be receptive to as it prepares to “Pivot (back) to Asia” to contain China.

The Bell, 2/23/24

Russia’s militarized economy is storing up problems for the future

Russia’s economy has demonstrated both resilience in the face of Western sanctions, and flexibility in restructuring trading relationships and domestic demand. Since the Kremlin sent tanks across the border into Ukraine in 2022, China has replaced the European Union as Russia’s primary trading partner and tech supplier, while, domestically, the increase in military spending has given a major stimulus to the broader economy. 

Superficially, military spending and buoyant revenues from hydrocarbons mean the Russian economy can appear to be flourishing. But this is not a healthy sort of flourishing, and economic growth is masking a decline in productivity, rising currency instability, fiscal difficulties, labor shortages and a reversion to less sophisticated technologies. 

Budget: there’s still money to pay for the war

President Vladimir Putin has committed record sums to Russia’s war in Ukraine: in 2022 and 2023, spending topped 30 trillion rubles. Five years ago it was half that size.

In this way, the Russian authorities have changed how demand is distributed in the economy. Now, the greatest demand comes from an expanded defense sector. As in Soviet times, the war has been a financial boon for the military-industrial complex and related industries, the armed forces and their families, and all parts of the public sector that are connected with defense and security.

High levels of public spending, which also includes preferential loans, prompted the Central Bank to hike interest rates to 16%. It also drives inflation.

It’s more than likely that these trends will continue through 2024, and we will see the level of military and national security spending exceed 8% of GDP for the first time in history. Alongside oil revenues, Russia’s economic fortunes are now tied to the military and the defense industry. We looked in detail at the consequences of this here.

Labor market: nobody to hire

The militarization of the economy has been the primary driver of rising demand on the labor market. And this rise was accompanied by a decline in supply as hundreds of thousands of able-bodied Russians went to the front, or fled the country. As a result, Russia is experiencing a labor shortage. This benefits workers, who can command higher salaries. As a result, real wages and disposable incomes in Russia are on the rise.

However, this growth is relative as it follows a significant fall in 2022. In fact, real wages and disposable incomes have only just rebounded to 2020 levels. 

In addition, high demand for workers and the difficulties of accessing Western technology means Russia saw a record 3.6% fall in labor productivity in 2023 (second only in this century to the 4.1% fall recorded in 2009 amid the global economic crisis). Over the last two years, the average Russian has been earning more and producing less. 

The ruble: unprecedented volatility

A widely fluctuating exchange rate has become the new normal. At different points over the last two years, you could buy a U.S. dollar for 50 rubles, and also for 100 rubles. After the abolition of Russia’s “budget rules,” the exchange rate has been determined solely by trade flows. As a result, in summer 2023, when export revenues hit a ceiling and demand for imports continued to rise, the ruble collapsed to 100 rubles against the U.S. dollar.

In an attempt to exert control, the authorities forced exporters to sell foreign currency earnings. Strictly speaking, neither the government, nor the Central Bank, has an exchange rate target, so it is wrong to talk about abandoning a floating ruble. Equally, though, it is incorrect to assume that the current rate is entirely market based.

International trade: replacing Europe with China and the Global South

Over the last two years, Russian foreign trade has undergone changes that are comparable in their scale with those seen in the 1990s. We’ve seen a transformation of both logistics, and the geography of imports and exports. This is clearly illustrated by two graphs published by economic research outlet Econs.

Technological and financial sanctions imposed by the West at the start of the war obliged Russia to replace imports from the EU and other developed countries. The main source of imports has shifted from Europe to China, which now provides 45% of Russia’s imports (up from 27% before the war). Developed economies dropped from providing 47% of Russian imports to just 17%. However, import substitution has not been total. Parts and components now make up a smaller proportion of overall imports and this implies a decline in localized production – instead of assembling cars, for example, Russia is back to purchasing ready-made ones.

Russia’s raw material exports have responded well to the loss of Western markets, and have been quickly diverted to other countries.

Replacing the U.S. dollar with the Chinese yuan

Conflict with the west has forced Russia into China’s embrace (we recently discussed this in detail here). In just two years, trade in the yuan on the Moscow Exchange went from almost nothing to nearly a third of the market. In December, 35.8% of Russia’s exports were purchased in yuan, along with 37% of imports. At the same time, exports in foreign currencies reached their highest level since January 2022 ($2.8 billion of the total $5.4 billion was settled in yuan). In 2023, $68.7 billion was held in yuan in Russian bank accounts, compared with $64.7 billion in dollars. Lending to companies in yuan was up 3.6 times to $46.1 billion in 2023, largely due to the conversion of debt from dollars and euros.

Although a substantial part of Russia’s banking sector is under Western sanctions, a chunk of export-import payments still happen in U.S. dollars and euros. However, after U.S. President Joe Biden’s decree on secondary sanctions, Russian businesses have increasingly encountered problems with transactions in “friendly” countries such as Turkey, the UAE and China. This means that the yuan will be used even more.

Why the world should care

Amid the war in Ukraine, the Kremlin has managed to continue to acquire essential chips and semiconductors via third countries, and it has successfully switched its oil exports to Asian buyers. However, the current stability is not likely to endure: in 1-2 years, the structure will begin to wobble due to accumulated imbalances, and possible social problems. [It will be interesting to see if this prediction proves true in the next year or two. – Natylie]

YouTube link here.

“Listen to Former German General Harald Kujat at a public lecture in Germany how he destroys the false pro-war narrative of the neocons. This talk was held in German and is dubbed into English thanks to the brilliant work of Andreas Voss who makes these translations possible.” – Neutrality Studies

Kremlin website (machine translation), 3/13/24

Dmitry Kiselyov: Mr President, in your Address to the Federal Assembly, you took trillion after trillion out of your sleeve, so to speak. Thus, they proposed an absolutely amazing plan for the development of the country – absolutely amazing. This is a different Russia, with a different infrastructure, a different social system – just a dream country.

I would like to ask your favorite question from Vysotsky: “Where is the money, Zin?”

Vladimir Putin: Yes, of course.

Moreover: firstly, all this was put together as a result of the painstaking work of the expert community, Government and Administration specialists. Everything fully fits into budget rules and, in fact, is quite conservative in nature, because some experts believe that there should and will be more income. This means that greater expenses would need to be planned , because this should directly affect the prospects for economic development.

In general, this is correct, but in 2018 we also planned to allocate an additional 8 trillion to the development of the economy and the social sphere, and then increased these expenses. I think that it is quite likely that if everything turns out the way the optimists from this circle of experts that I mentioned say, then we can – and should, and will be able to – increase these expenses in various areas.

D. Kiselyov: So we are talking about a six-year period?

Vladimir Putin: That’s right. We are talking specifically about a six-year period. We are now drawing up a budget for a “three-year plan” – for a three-year, as we say, planning period. But, of course, when we were preparing for the Address – I say “we were preparing for the Address” because the whole team is working – we proceeded from the assumption that we would calculate our income and expenses in those areas that we consider key, priority for six years.

D. Kiselyov: But there are still literally stunning projects. For example, the Sochi-Dzhubga highway: 130 kilometers, 90 kilometers of which are tunnels, and the rest are probably bridges, judging by the landscape. One and a half billion in the first three years only, and the route should ideally be ready in 2030. How necessary is this and will it be enough to win?

Vladimir Putin: People need this route. After all, families with children cannot get to Sochi by car. Everyone stops somewhere in the area of ​​Gelendzhik, Novorossiysk, because the route is very difficult – serpentine.

There are several construction options there. We will discuss this in the next few days: either to do it to Dzhubga, or to do it first from Dzhubga to Sochi. Some members of the Government suggest that this should be done in stages. Others believe that it is necessary to do everything at once, because otherwise there will be a bottleneck from Dzhubga to Sochi.

The first part, if you look at it from Novorossiysk, is more or less kind of decent, and the coverage is not bad, but very narrow. If we do it before Sochi, as the first part, then there may be traffic jams in this small space, of which there are enough now.

In general, we will determine this with specialists – how, in what stages, but it needs to be done. Of course, it is necessary to determine the final cost of the project and ensure that everyone stays within the financial plans.

First of all, the interests of the people, but also the interests of the economy. The development of territories in the south of the country is very important.

Dmitry Kiselyov: If we can afford such large-scale investments, it means that the country is rapidly getting richer, especially in the context of the special military operation, in the face of almost 15,000 sanctions, which are absolutely wild. Moreover, we have set ourselves the task of reducing poverty, including among large families. Isn’t it too impertinent?

Vladimir Putin: No. Look, if you go back to this road. When I discussed it with members of the Government, as you know, the Finance Ministry is always miserly, in a good way, and always has a very conservative attitude to spending, and the Finance Minister [Anton Siluanov] told me, almost verbatim: “Those who have never driven on this road today are against the construction of this road.”

Dmitry Kiselyov: In other words, the entire Government needs to be involved.

Vladimir Putin: And he is right, because this is especially important for families with children.

As for whether we get rich or not. The economy is growing – this is a fact, and a fact that has been recorded not by us, but by international economic and financial organisations. Indeed, in terms of purchasing power parity, we have overtaken the Federal Republic of Germany and taken its place – fifth place – among the world’s largest economies.

The German economy contracted, I think, by 0.3 percent last year, while we grew by 3.6 percent. Japan grew by a small percentage. But if things continue to develop at the same pace as they are today, then we have every chance to take the place of Japan and become the fourth largest economy in the world, and in the near future.

But? – To be honest and objective, there is a difference between the quality of our economies. In terms of purchasing power parity, that is, in terms of volume, we are really fifth now, and there is every chance to take Japan’s place. But the structure of the economies of these countries, of course, compares favorably with ours.

We still have a lot to do to ensure that we have a decent position not only in terms of purchasing power parity, but also in terms of GDP per capita. And secondly, the structure itself should change, so that it becomes much more efficient, more modern and more innovative. That’s what we’re going to work on.

In terms of income, purchasing power parity is a very important indicator. This is the size of the economy. This means that the state receives funds through the tax system at all levels to solve strategic problems. This gives us the opportunity to develop in the way we consider necessary for our country.

Dmitry Kiselyov: By the way, you are talking about the structure, about the need for structural changes in our economy. After all, this is exactly what was laid down in your Address, and this is how the task is set: to ensure that innovative industries grow faster than the average economy.

Vladimir Putin: Yes, of course.

I have already said that the structure is what we must work on. The future of our economy, the future of human resources, efficiency and productivity depend on it.

One of the main tasks today is to increase labour productivity. Because in the context of a shortage of manpower and labor resources, we have only one way to develop effectively, and that is to increase labor productivity. This, in turn, means that we must increase the innovative nature of the economy, for example, increase the density of robotization. Today we have 10 robots, I think, per 10,000 workers, but we need at least 1,000 robots per 10,000 workers. That’s the way it is in Japan, I think.

And in order for people to be able to work on such new equipment – not only to use robotics, but also other modern means of production – we need to train them. Another problem arises – the training of personnel.

For this purpose, we have identified entire areas, including engineering training. As you may have noticed, we have already launched 30 modern engineering schools across the country. This year, we are launching 20 more, and there will be 50. And we are planning another 50 in the coming years.

Therefore, these areas are the future of our country. We will move and develop in these areas.

Dmitry Kiselyov: To put an end to the sanctions. Many people are suggesting the idea of creating a special body that would deal with sanctions, their repulsion, and, in general, defense against sanctions. Is it supposed to be something like this, or does it make no sense?

Vladimir Putin: There is no need. We analyse – the Government, the Central Bank, the Security Council – everything that our enemies are doing. After all, a lot of things are done not even for political or military reasons, although they are justified by this, but are done simply for reasons of competition…

Dmitry Kiselyov: Unscrupulous and unfair competition.

Vladimir Putin: Unfair competition – under the guise of some political or military considerations. This was the case in the aircraft industry, and this is the case in many other industries.

Well, we live in the world that exists, and we have adapted to it. We understand who we are dealing with. And so far, as can be seen from the results of our work, we have been acting quite effectively.

Dmitry Kiselyov: But the West’s insidiousness is not limited to sanctions. Here is a quote from your address [to the Federal Assembly]: “The West is trying to drag us into a new arms race in order to exhaust and repeat the trick that they succeeded in the 1980s with the USSR.” How big is the margin of safety in the arms race?

Vladimir Putin: We need to get the maximum return on every ruble invested in the defence industry. Indeed, in Soviet times, no one counted these expenses, and unfortunately, no one was chasing efficiency. Defense spending accounted for about 13 percent of the country’s GDP, the Soviet Union.

I will not refer to our statistics, but we will refer to the Stockholm Institute: last year our defence spending was 4 percent, and this year it is 6.8 percent, that is, we have grown by 2.8 percent. In principle, this is a noticeable growth, but it is absolutely not critical. In the Soviet Union, it was 13 percent, and now we have 6.8 percent.

It must be said that defence spending accelerates the economy, it makes it more energetic. But, of course, there are limitations here, and we understand this. The age-old question: which is more profitable, guns or oil? That’s what we mean.

Although, I repeat, the good thing about the modern defence industry in our country is that it not only indirectly influences civilian industries, but also uses these innovations to produce civilian products using the innovations needed for defence. This is an extremely important thing.

Of course, our expenses are incomparable. How many of them are there in the United States? 800…

Dmitry Kiselyov: Under 900 already.

Vladimir Putin: Under $900 billion, $860 billion or $870 billion. They are absolutely incomparable with our expenses.

Dmitry Kiselyov: It seems to me that they are sawing there, because they have no hypersonics, nothing… What is this?

Vladimir Putin: Let me explain what is going on. The fact is that they spend a lot of money on maintenance – and not only on salaries, but also on the maintenance of bases around the world. And there, as if everything goes into a black hole – you can’t count anything. This is where the main sawing takes place. However, in the production of weapons and weapons in general, money is also spent that is difficult to estimate.

If we calculate the cost of, say, a well-known missile defence system and one of the main components of overcoming missile defence on our part – the Avangard, an intercontinental missile gliding unit – these are simply incomparable values. And we, in fact, nullified everything that they did, everything that they put into this missile defense system. That’s how you need to act.

And, of course, there is no doubt that the economy of our Armed Forces must meet today’s requirements.

Dmitry Kiselyov: The word “justice” is a magic word for the Russian language. You use it very carefully, but once you uttered this word in your Message, and it sounded like lightning. You said that the distribution of the tax burden should become fairer in Russia, and you suggested that the Government think about it. In which direction to think?

Vladimir Putin: You know, it is true that the distribution of the tax burden should be fair in the sense that corporations, legal entities and individuals who earn more, to put it simply, should be allocated to the common treasury, as they say, to solve national problems, primarily to combat poverty.

Dmitry Kiselyov: A progressive tax?

Vladimir Putin: Yes, in fact, it is a progressive tax.

I don’t want to go into details now, we need to work on it. In this way, we need to build this system so that it really gives a greater return on resolving primarily social issues and the tasks facing the state in this area.

We plan to reduce the tax burden, for example, for large families, and take a number of other steps in this area. It seems to me that society will take this absolutely normally. First.

Second. What is the business asking of us? He asks us to decide on the tax system, but not to touch it anymore so that it is stable. This is the most important request and requirement from business.

The Government should work on this as soon as possible and submit proposals together with State Duma deputies.

Dmitry Kiselyov: A progressive tax – will we not scare anyone away? We used to be afraid of scaring someone off with this progressive tax.

Vladimir Putin: No, I don’t think so. In principle, this system is well established in our country. Even those who were ardent proponents of the flat scale, the authors of the flat scale, now believe that, in general, we are ripe to act much more selectively.

Dmitry Kiselyov: In the course of your address, you thanked your “colleagues from the Government” – that was the wording. Does this mean that the Mishustin government – in the event of your victory – will survive?

Vladimir Putin: Still, we need to talk about this after the elections, after the votes have been counted. It seems to me that this is simply incorrect now. But on the whole, the Government is working quite satisfactorily – as we can see, the results are obvious, these are objective data.

Dmitry Kiselyov: You mentioned reducing the tax burden for large families. Children and the demographic situation – these topics were very broad in your address. Indeed, the issue is quite sensitive, because demographically Russia is melting. Last year was an anti-record year in terms of birth rate.

Vladimir Putin: The birth rate, I think, is 1.31 or 1.39…

Dmitry Kiselyov: 1.39 children per woman capable of giving birth.

Vladimir Putin: Childbearing age.

Dmitry Kiselyov: Ideally, we should probably double it to three. Because it’s literally a disaster for society.

You have proposed a fairly large-scale programme to support motherhood and demographic incentives. Are you sure that these measures will reverse the trajectory from downward to upward?

Vladimir Putin: Overall, if we proceed from all the measures to support families with children, we plan to spend up to 14 trillion rubles over the next six years through various channels. That’s a lot of money.

There are a lot of areas of support for families with children: from general social support – the construction or renovation of kindergartens, the construction of new schools, the repair of old schools, putting them in order in accordance with today’s requirements – to support women from pregnancy to 18 years of age. After all, almost 400,000 women are now receiving benefits. This is almost every third woman who is expecting a child. And more than 10 million children receive benefits. This is a serious matter.

We continued the system of providing maternity capital. We have continued to make payments – these decisions are now being made – in the amount of 450,000 roubles per family, if a third child is born there, to repay the mortgage loan. We have maintained mortgage loan benefits for families with children. In general, a whole set in very different areas in order to support families.

Of course, as you have already mentioned, this is also the fight against poverty, because, of course, it is much more difficult for families with children than for families without children. This is understandable, the costs are high. Nevertheless, we have managed to do a lot in this area.

Look, 20 years ago, we had 29 percent of the population below the poverty line, which is 42 million people. Now it is 9.3 percent, according to the latest data, but it is also 13.5 million people. Of course, a lot. Of course, we need to do everything we can to reduce it to at least 7 percent. As for large families, the figure is more modest, but it should also be increased.

What do we start from when we talk about fertility problems? As I have said many times, and experts are talking about this, these are objective things, namely, we had two very large declines in the birth rate. During the Great Patriotic War – 1943–1944. There was a comparable decline immediately after the collapse of the Soviet Union. Just one to one, the same decline in the birth rate.

It is clear why: the social support system has collapsed. No matter how weak it was in the USSR, if we can talk about it, it still existed, and after the collapse of the Soviet Union, it disappeared almost completely, and poverty began completely. What can I say, there is no need to do it now. In any case, the family planning horizon decreased during these years, and the birth rate fell before the war years. Then we had a rise. And now we have a fairly large number of children and young people who will enter adulthood and childbearing age in a few years, and we proceed from the assumption that our indicators will increase.

What you have mentioned is a global trend. There are only a few countries with developed economies that show positive demographic dynamics, in all other countries everything is going into the red. This is a complex problem related to the economy, to women’s life priorities. Now it is better not to get into it, let the demographers try, tell us and suggest a solution.

But do you know what makes you feel positive? The mood in society. In our country, 70 percent of men and 72 percent of women want to have two or more children, and the state should support them. This is a large set of support measures that we are planning – they must be implemented, and we will do it.

Dmitry Kiselyov: But there is still no certainty that these measures will turn the tide.

In the late 1990s – this is a well-known story, as you yourself have told – you saved your children from a fire by entering a burning house, on the second floor. And then they remembered that there was money somewhere else. The money was in fire and burned. This indicates your priorities: children first, money second.

Maybe it’s the same now on a national scale? Not 14 trillion, but everything and create a programme to guarantee that this situation will be reversed?

Vladimir Putin: You know, we need to look at the course of events, as they say. In the early 2000s, we took a number of steps in the field of demography, including the introduction of maternity capital and a number of other measures that had an obvious positive result. This means that we can achieve the goals we need.

Dmitry Kiselyov: In other words, you have such experience?

Vladimir Putin: Of course, we have experience. Using this experience and other modern developments, we must hope that we will achieve the goals we have set for ourselves. And as events develop, we will adjust those measures or add something else to the measures that we will apply.

For example, we have just declared the Year of the Family. We have a new national project – “Family”. There are elements that we have never used before. For example, 75 billion rubles will be allocated to those regions where the birth rate is lower than the national average. These are mainly the central regions of Russia and the North-West. 75 billion is a lot of money. You just need to dispose of them competently.

There is also such a component as caring for the elderly. There are other support measures. We need to raise the birth rate and increase life expectancy – then we will stabilize the country’s population. This is the most important integral indicator of our success or, perhaps, work that requires additional attention from all administrative levels and authorities.

Dmitry Kiselyov: Yes, but there is also a third tool for solving demographic problems everywhere in the world, and that is immigration. What figures can we talk about here in this six-year period, and what does consistency mean in this work?

Vladimir Putin: If we are talking about migrant workers, we do not have so many immigrants compared to other countries – they make up 3.7 percent of the total number of workers. But they are concentrated in the regions where economic life is most active, and there are, of course, an order of magnitude more of them. These are the Moscow Region, Moscow, the North-West Region and some regions of the North, where the level of wages is decent. But, without a doubt, this is an issue that requires special attention from the authorities – local, regional, and federal.

What would I like to say here? This is a very important thing. After all, when labor migrants are involved, they always talk about the need to do it due to a shortage of workers. Our entrepreneurs must understand that the situation for them in terms of the availability of workers will not change for the better in the coming years – they will face a shortage of labor.

So, in order to solve this problem radically – I am now going back to what we have already said – it is necessary to increase labour productivity and reduce the number of workers in those areas where this can be done, achievingeven better resultsby introducing modern equipment. To do this, we need to invest in this area and train personnel, as we have already discussed. This is the most important thing we need to think about.

In general, of course, migration policy is an important tool in the economy. It is not a sin to look at the experience of other countries. First of all, of course, we need to talk about the repatriation of our compatriots. What repatriation is and what compatriots are is already reflected in our regulatory framework, there is no need to repeat it here.

We need to talk about attracting people who, perhaps, do not intend to move to the Russian Federation, but because of their qualifications and talents in various fields, they can make a significant contribution to the development of our state, to the development of Russia. We will also be happy to attract such people.

As for traditional migrant workers, we also need to think about how to prepare them for their arrival in Russia, including with our partners in the countries where they live. This is the study of the Russian language, our traditions, culture, and so on. It is necessary that they are taken care of here, treated as human beings. So that they integrate into our society in a natural way. All of this together should have a positive effect, I hope.

And, of course, everyone must abide by our traditions and the laws of the Russian Federation. And, of course, compliance with sanitary standards and so on is very much in demand. Ensuring the safety of the citizens of the Russian Federation must be in the first place.

Dmitry Kiselyov: Russians are probably the largest divided nation in the world. You had a conversation with the Leaders of Russia, and one of your interlocutors said that in the Zaporozhye region we found that they were Russians like us. And for them – it was an impression – it sounded like some kind of revelation. In general, this is really the case, and we are now growing with new regions, and Odessa is a Russian city. Probably, there is a great hope in this area as well?

Vladimir Putin: Of course. The population density in these regions has always been quite high, and the climate is remarkable.

As for Donbass, it is an industrially developed region back in the days of the Soviet Union. How much the Soviet Union invested in this region, in its coal mining industry, in the metallurgical industry! Yes, of course, investment is required to ensure that all production is modern, that living conditions and working conditions are built in a completely different way than they were a couple of decades ago.

As for Novorossiya, it is a region with a pronounced developed agriculture. In this regard, we will do everything we can to support both traditional areas of activity and new ones that organically fit into these regions and people’s desire to develop them. And there, you know, the people there are very talented.

Moreover, as I have already said, even taxes go to the federal budget from there. Yes, at this stage they need to be helped, supported, and brought to the republican, federal level. They will work, and very quickly.

Dmitry Kiselyov: Historically, it is quite obvious that Nazi regimes do not dissolve themselves, but disappear as a result of military defeat. This was the case in Germany, in Italy, in Japan. Obviously, the same will happen with Bandera’s Nazi regime. We are now advancing along the entire front line, judging by the reports of both the Ministry of Defense and our war correspondents.

Still, has it been possible to find a way to fight when our losses on the offensive are less than on the defensive? This is a rather non-trivial task for the art of war, but it always holds back the offensive. This is a thrift that is perfectly justified in relation to our heroic warriors. But this question arises: how to advance with minimal losses?

Vladimir Putin: This is an understandable and fair question. But the answer is also simple: it is necessary to increase the means of destruction – the number and power of the means of destruction, to increase the effectiveness of the forces and means used. Aviation is tactical, army, and strategic. I am referring, of course, to the components that are acceptable for armed conflicts of this kind. These are ground-based weapons, including high-point weapons. These are artillery and armored vehicles. It is no exaggeration to say that our country is developing by leaps and bounds.

Dmitry Kiselyov: In this direction?

Vladimir Putin: Yes, this is what is happening. This is the answer to your question: the more powerful and more weapons of destruction, the fewer losses.

Dmitry Kiselyov: But they still raise the question of what price are we willing to pay – maybe the word “project” is not appropriate – for all this challenge that we have been forced to face historically?

Vladimir Putin: Look, every human life is priceless, every human life. And the loss of a loved one for a family, for any family, is a huge grief.

But the question is what? It’s a question of defining the very fact of what we’re doing. What are we doing? As you have just noticed, one of the participants in the conversation said that we were surprised to find that there were Russians like us. We came to the aid of these people. This, in principle, is the answer to your question.

If we abandon these people today, then tomorrow our losses may increase many times over, and our children will have no future, because we will feel insecure, we will be a third- or fourth-class country, no one will reckon with us if we cannot defend ourselves. And the consequences could be catastrophic for Russian statehood. That’s the answer.

Dmitry Kiselyov: The Americans seem to be talking about negotiations and strategic stability, but at the same time they are talking about the need to inflict a strategic defeat on Russia. Our position is: “We are open to negotiations, but the time for good gestures has passed, they are over.” So, there will be no negotiations?

Vladimir Putin: We have never refused to negotiate.

Dmitry Kiselyov: But how, without kind gestures, does that mean without compromise? How then?

Vladimir Putin: I will try to explain. When we held talks in Turkey, in Istanbul (I have already said this many times, I need to repeat it again, I will do it), with the negotiators on the other side, we came up with a thick tome, a document, in fact, a treaty, a draft agreement. There is an excerpt from this agreement, it was initialed by the head of the negotiating group from Ukraine, Mr. Arakhamia. He did it, his signature is on it (we have it in the Executive Office). But then, as you know, Mr Arakhamia himself told the world publicly, also at a meeting, I think, with journalists, even foreign ones: former British Prime Minister Mr Johnson came and dissuaded them from signing and, accordingly, implementing this treaty. And the topic you have just mentioned has begun: it is necessary to defeat Russia on the battlefield.

Are we ready to negotiate? Yes, we are. But only we are ready for negotiations that are not based on some “wishes” after the use of psychotropic drugs, but based on the realities that have developed, as they say in such cases, on the ground. This is the first point.

Second. After all, we have been promised many things. They promised not to expand NATO to the East, and then we see them at our borders. They promised, if we do not delve into history, that the internal conflict in Ukraine will be resolved by peaceful means, by political means. As we remember, three foreign ministers came to Kiev, Poland, Germany and France and promised that they would be the guarantors of these agreements, and a day later a coup d’état took place. They promised to implement the Minsk agreements, and then publicly stated that they were not going to fulfill these promises, but only took a pause to arm the Bandera regime in Ukraine. We have been promised a lot of things, so promises alone are not enough.

Now to negotiate just because they are running out of ammunition is somehow ridiculous on our part. Nevertheless, we are ready for a serious discussion, and we want to resolve all conflicts, especially this conflict, by peaceful means. But we must clearly understand that this is not a pause that the enemy wants to take for rearmament, but a serious conversation with security guarantees for the Russian Federation.

We know the different options that are in question, we know the “carrots” that are going to be shown to us in order to convince us that the moment has come. I repeat, we want to resolve all disputes, including this dispute, this conflict, by peaceful means. And we are ready for this, we want it. But this should be a serious security conversation for the opposing side as well, and in this case we are primarily interested in the security of the Russian Federation. This is what we will proceed from.

Dmitry Kiselyov: Mr President, I think we look too noble. Won’t it turn out that we will make a deal with them, and they will deceive us again, and we will console ourselves with the fact that we are honest, and they deceived us? Is it our fate, after all, to be a fool all the time?

Americans minted medals for themselves in the 1990s for winning the Cold War, and since then, all those decades have been decades of big lies. How can we even hope that they will go and finally conclude an honest agreement with us, which they will fulfill, and even with guarantees for us? I don’t know what to do with them at all? Do you really believe that such a thing is possible?

Vladimir Putin: I don’t want to say this, but I don’t trust anyone.

Dmitry Kiselyov: Right.

Vladimir Putin: But we need guarantees. Guarantees must be spelled out, they must be those that would suit us, in which we will believe. This is what we are talking about.

Now it is probably premature to speak publicly about what it could be. But we certainly won’t buy into just empty promises.

Dmitry Kiselyov: I am afraid that you will be quoted in a broad way. Do you not trust anyone at all, or do you mean your Western partners in this case when you say that you do not trust anyone?

Vladimir Putin: I prefer to be guided by facts rather than good wishes and talk that everyone can be trusted. After all, you see, when decisions are made at this level, the degree of responsibility for the consequences of the decisions made is very high. Therefore, we will not do anything that is not in the interests of our country.

Dmitry Kiselyov: Mr President, what happened to Macron? Did he go crazy at all? He is going to send French troops to fight our army, he looks like a fighting Gallic rooster, thereby frightening all Europeans. Still, how to react to this?

Vladimir Putin: The fact is that the military of Western countries has been present in Ukraine for a long time, even before the coup d’état, and after the coup d’état their number increased manifold. Now they are present directly in the form of advisers, they are present in the form of foreign mercenaries and suffer losses. But if we are talking about official military contingents of foreign states, I am sure that this will not change the situation on the battlefield – this is the most important thing, just as the supply of weapons does not change anything.

Second, it could lead to serious geopolitical consequences. Because if, say, Polish troops enter the territory of Ukraine, as it sounds, to cover the Ukrainian-Belarusian border, for example, or in some other places, to free up Ukrainian military contingents to participate in hostilities on the line of contact, then I think that Polish troops will never leave. I think so. They sleep and see, they want to return those lands that they consider historically their own and that were taken from them by the “father of nations” Joseph Vissarionovich Stalin and transferred to Ukraine. They, of course, want them back. And if official Polish units enter there, they are unlikely to leave.

But then their example can be followed by other countries that lost part of their territories as a result of World War II. I think that the geopolitical consequences for Ukraine, even from the point of view of preserving its statehood in its modern form, will certainly stand in all their glory and in full growth.

Dmitry Kiselyov: If we go back to Macron, maybe he decided to take revenge on Russia for the fact that we “stepped on his tail” in Africa, and we had to “stand by and be afraid” there? He probably didn’t expect us to be so active there.

Vladimir Putin: Yes, I think there is some resentment, but when we maintained direct contacts with him, we talked quite frankly about this topic.

We didn’t go into Africa and squeeze France out of there. The problem is different. The notorious Wagner Group first carried out a number of economic projects in Syria, then moved to other African countries. The Ministry of Defense provides support, but only on the basis that this is a Russian group, nothing more. We didn’t squeeze anyone out. It’s just that the African leaders of some countries negotiated with Russian economic operators, wanted to work with them, and did not want to work with the French in some ways. It wasn’t even our initiative, it was an initiative on the part of our African friends.

It is not clear why we should be offended in this regard, if an independent state wants to develop relations with its partners from other countries, including Russia, and wants to develop relations with Russia. We did not touch them, the former French colonizers, in these countries. I even say this without irony, because in many countries where France has historically been a metropolis, they do not really want to deal with them. We have nothing to do with it. Perhaps it is more convenient to be offended by someone without seeing your own problems. Perhaps the French President’s sharp and emotional reaction is also related to what is happening in some African countries.

Although I know other African countries where they are calm about the French stay and say that “yes, we are satisfied, we are ready to work with them.” But in some countries, they don’t want to. We have nothing to do with it. We are not inciting anyone there, we are not turning anyone against France.

We do not set ourselves such tasks. To be honest, there are no such state-wide or nationwide tasks at the level of the Russian state. We’re just friends with them, that’s all. They want to develop relations with us, for God’s sake, and we meet them halfway. There is nothing to be offended about.

Dmitry Kiselyov: But now they say in France that there are no “red lines” left with regard to Russia, and nothing is impossible, and everything is possible. In general, they want to talk to us on the basis of the balance of power. We hear a lot of things from France, the West, and Lithuania. In general, some kind of chorus is not harmonious, but hostile.

Maybe we should also take non-standard solutions and at some point turn to the two-million-strong North Korean army for help? For example, in exchange for our “nuclear umbrella” over half of the Korean Peninsula? Why not then?

Vladimir Putin: First of all, the Democratic People’s Republic of Korea has its own nuclear umbrella. They didn’t ask us for anything. This is the first point.

Second. In principle, as we can see today from the results of what is happening on the battlefield, we are coping with the tasks that we have set for ourselves.

As for those states that say that they have no “red lines” with regard to Russia, they must understand that there will be no “red lines” in Russia with regard to these states either.

As for the small states of Europe, first of all, we treat everyone with respect, no matter what. Secondly, when they, these small states, call for tougher policy towards Russia and take some extreme measures, including, for example, the deployment of troops and so on, these are the states, and they understand this, that will not feel the consequences of their provocative statements. And those who can feel it, they behave much more reservedly. And rightly so.

Dmitry Kiselyov: And what about all these dances between Germany and Taurus? Scholz says “we do not supply”, and there are forces that insist on supplying Taurus to Ukraine, the British come up with their own initiative: let’s, they say, through England in transit, we are ready to send. The target is the Crimean Bridge, the German generals are already planning operations, as we have heard, not only the Crimean Bridge, but also military bases, as they say, deep in Russian territory. Some are already saying that these missiles could hit the Kremlin. Not really burying themselves in their dreams at all?

Vladimir Putin: First of all, they are fantasizing, encouraging themselves. Secondly, they are trying to intimidate us.

As for Germany, there are problems of a constitutional nature as well. They are right to say that if the Taurus gets into the part of the Crimean Bridge that is certainly Russian territory even by their standards, it will be a violation of the Constitution of the Federal Republic of Germany.

The fact is that the opposition in Germany is behaving even more aggressively. Let’s see what they come up with. We are following this closely. They use British and American missiles. This does not change the situation on the battlefield. Yes, of course, they are causing damage to us, that much is obvious. But, in fact, this does not change the course of hostilities and the consequences that inevitably come for the opposite side.

We are now hearing that in Germany, your channels, foreign channels, and German channels show how much they have, how many are out of order, how many need to be improved, modernised, and so on. Let them work. As you rightly said, there are some things that they need to think about. Whoever is smarter thinks about it.

Dmitry Kiselyov: As for the new NATO members, Finland and Sweden, what have they exchanged for? Swedish Foreign Minister Tobias Billström suddenly told the Turks that Sweden was against NATO bases on Swedish territory. What, they didn’t understand where they had joined, at all? What happened to them?

Vladimir Putin: I don’t know if you have to ask them. We had fairly good and stable relations with these countries, and I think that they benefited more from their neutrality, because it gives certain advantages, at least as a platform for negotiations in order to reduce tensions in Europe.

In general, we had a perfect relationship with Finland, just perfect. We didn’t have a single complaint against each other, especially territorial, not to mention other areas. We didn’t even have troops, we removed all the troops from there, from the Russian-Finnish border. Why did they do it? In my opinion, this is based on purely political considerations. I really wanted to be a member of the Western club, under some kind of “umbrella”. Frankly speaking, I don’t understand why they need it. This is an absolutely senseless step from the point of view of ensuring one’s own national interests. Nevertheless, it is up to them to decide, they have decided so.

We didn’t have troops there, now we will. There were no systems of destruction, now they will appear. What for? Our economic relations were very good. They used our market, we bought a lot from them. What’s wrong with that? But now the situation will change. With many of their goods, they are not very needed in other markets, ours are not enough. I don’t understand.

Dmitry Kiselyov: In the meantime, the United States is coming…

Vladimir Putin: You know, this is a household item, but nevertheless. In recent years, Russian rubles have been accepted in Helsinki, and even more so in the border areas of Finland. Including in Helsinki, in large supermarkets, you could buy whatever you wanted for rubles. There are all the ads all around in Russian.

Dmitry Kiselyov: Now the border area is going bankrupt.

Vladimir Putin: Yes. What am I talking about? On the other hand, from the point of view of the economy, it was very good – real estate prices were kept at a fairly good level. From the point of view of the economy, it was good, but apparently there were forces, very right-wing conservative, nationalist, who did not like it very much – such a rapprochement with Russia. Some even thought that this was excessive: “Why are these Russian houses and apartments being bought? Everything here is in the Russian language…”

Not only do I think, I know, that such Russophobia has begun to grow at the everyday level. Maybe some political forces inside the country have decided to take advantage of this domestic lurch, maybe. The combination of these factors led to this decision. I think so, but I can’t say for sure. In any case, this certainly does not improve the security situation in any way, both in bilateral relations and in Europe as a whole.

Dmitry Kiselyov: But in the meantime, there is an active presidential election race going on in the United States. It can’t do without you. You are invisibly participating in it, because each of the candidates from the Republican and Democratic parties mentions you in their speeches and argues. In general, it seems that you do not leave the pages of newspapers and TV news headlines and are an argument in everyone’s election campaign. And you add fuel to the fire.

Vladimir Putin: How’s that?

Dmitry Kiselyov: I would like to say that one of the candidates is preferable to us. But if a foreign president says that one of the candidates in another country is preferable, then this is a classic interference in the elections. In general, to what extent are you interfering in the American elections in this way, saying that Biden is preferable to us? And in general, to what extent is this true? Is it trolling or what is it?

Vladimir Putin: No, you know, I will tell you one thing that will show that nothing has changed in my preferences here. First.

Second. We do not interfere in any elections in any way and, as I have said many times, we will work with any leader who is trusted by the American people, the American voters.

But here’s the curious thing. In his last year as President, Mr. Trump, the current presidential candidate, reproached me for sympathizing with Biden. That was more than four years ago. That’s what he told me in one of our conversations. I’m sorry, I’ll say like him, it’s just a direct speech: “You want Sleeping Joe to win.

He told me so when he was still President. And then, to my surprise, they started persecuting him for allegedly supporting him as a candidate. Well, it’s complete nonsense.

As for today’s pre-election situation, it is becoming more and more uncivilized. I would not like to comment on this.

But I think it is obvious to everyone that the American political system cannot claim to be democratic in every sense of the word.

Dmitry Kiselyov: To be honest, your preference for Biden sounds rather strange to me personally. After all, in 2011, Biden came to Moscow and persuaded you not to run for president.

Do you remember this story? At the time, he spoke about it while meeting with the Russian opposition at Spaso House. And Garry Kasparov wrote about this, that Biden told this story, that he came to the Russian White House to Prime Minister Putin and in every possible way dissuaded him from running for President and began to build the “Arab Spring” in our country. In other words, Biden didn’t really like you back then. You have such a historic duel with him. Or did it just go away for you?

Vladimir Putin: To be honest, I didn’t pay much attention to this.

Dmitry Kiselyov: It’s gone, isn’t it? You didn’t even pay much attention to it.

Vladimir Putin: Some kind of duel…

D. Kiselyov: That is, for him it was serious, but for you it was not.

V. Putin: This is just a sign of interference…

D. Kiselyov: Yes, this is 100 percent blatant interference.

V. Putin: … in our internal political processes. We have talked many times, and I have said many times: “We will not allow anyone to do this.”

D. Kiselyov: Okay.

If we avoid interference and election battles, in fact the escalation continues. It seems that both superpowers – Russia and the USA – are playing what in America is called a chicken game: this is when chickens run at each other, but there it is a game when guys in cars fly into each other’s heads, and who will turn first. It looks like no one is going to be the first to fold. So, is a collision inevitable?

Vladimir Putin: Why? Here in the United States they announced that they are not going to send in troops. We know what American troops are like on Russian territory. These are the interventionists. This is how we will treat it, even if they appear on the territory of Ukraine, they understand this. I said that Biden is a representative of the traditional political school, and this is confirmed. But besides Biden, there are plenty of other specialists there in the field of Russian-American relations and in the field of strategic deterrence.

Therefore, I don’t think that everything is rushing so head-on here. But we are ready for this. I have said many times, for us it is a matter of life and death, but for them it is a matter of improving their tactical position in general in the world, but also in Europe in particular, maintaining their status among their allies. This is also important, but not as much as it is for us.

D. Kiselev: Interesting, you said that we are ready for this. Philosopher Alexander Dugin, a specialist in geopolitics, calls for direct and practical preparation for nuclear war. “And the better we are prepared for it, the less likely such a war is,” says Alexander Dugin. How can you even be prepared for this? Are we really ready for nuclear war?

Vladimir Putin: From a military-technical point of view, we are, of course, ready. They [the troops] are constantly in a state of combat readiness. This is the first.

Second. This is also a generally accepted thing – our nuclear triad is more modern than any other triad, and only we and the Americans have such a triad.

We have made much more progress here. Ours is more modern, with all the nuclear components. In general, in terms of carriers and charges, we have approximately parity, but ours is more modern.

Everyone knows this, all specialists know this. But this does not mean that we should measure ourselves by the number of carriers and warheads, but we need to know about this. And those who need it, I repeat – experts, specialists, military – they know this well.

They are now setting the task of increasing this modernity, novelty, and they have corresponding plans. We know this too. They are developing all their components, and so are we. But this does not mean that, in my opinion, they are ready to start this nuclear war tomorrow. They want to – what to do? We are ready.

D. Kiselyov: Maybe, to make it even more convincing, we should conduct nuclear tests at some point? After all, we have no international restrictions for this.

Vladimir Putin: There is an agreement banning tests of this kind, but, unfortunately, the United States has not ratified this agreement. Therefore, in order to maintain parity, we withdrew this ratification. Since the treaty was not ratified by the United States, it did not finally enter into legal force because it did not receive the required number of ratifications, nevertheless, we adhere to these agreements.

We know that such tests are being considered in the United States. This is due to the fact that when new warheads appear, as some experts believe, it is not enough to test them only on a computer, which means they need to be tested in their natural form. Such ideas are floating around in certain circles in the United States, they do exist, we know about it.

And we are watching too. If they conduct such tests, I don’t rule it out, it’s not necessary, we need it or not, we still need to think about it, but it’s possible that we can do the same.

D. Kiselyov: But are we technically ready for this?

Vladimir Putin: Yes, we are always ready. I want it to be clear that these are not ordinary types of weapons, this is the type, type of troops that is in constant combat readiness.

D. Kiselyov: Vladimir Vladimirovich, but in difficult moments, I don’t know, last year at the front in connection with Kharkov or Kherson, did the thought of tactical nuclear weapons ever cross your mind?

Vladimir Putin: Why? It was at the proposal of the then command of the group that our side made the decision to withdraw troops from Kherson. But this did not mean at all that our front there was falling apart. There was nothing even close to this. This was simply done in order not to incur unnecessary losses among personnel. That’s all. This was the most important motive, because in conditions of combat operations, when it was impossible to fully supply the group located on the right bank, we would simply suffer unjustified losses of personnel. Because of this, it was decided to relocate to the left bank.

The correctness of this choice was confirmed by what the Ukrainian command tried to do in certain areas of the left bank, in the same settlement of Krynki: they simply threw their people there, like into a meat grinder, and that’s all. They’ve been running around there barefoot lately, in the literal sense of the word. They tried to throw ammunition there by high-speed boats and drones. What it is? They were simply sent to slaughter.

I once asked the Chief of the General Staff, there is nothing secret here, I said: “Listen, who do you think makes such decisions on the other side? After all, the one who makes the decision understands that he is sending people to certain death?” He says: “They understand.” I say: “Who makes the decision, why are they doing this? It’s pointless.” – “It makes no sense from a military point of view.” I say: “Which one?” “I don’t know,” he says, “probably the top political leadership, based on political considerations, that they have some chance of breaking through our defenses, there is some chance of getting additional money, citing the fact that they have there is some kind of bridgehead on the left bank, there is some chance to present your position beautifully at international meetings.” The command passed, all lower-level bosses automatically issue further orders.

But, by the way, the prisoners who were captured there surrendered, they show that they didn’t even know what situation they were getting into. Let’s say they send new units there and say: “There is a stable defense there, come on, continue, help.” They couldn’t even get to the left bank anymore.

D. Kiselev: Tragedy.

Vladimir Putin: Natural. From a human point of view, absolutely.

Therefore, why do we need to use weapons of mass destruction? There has never been such a need.

D. Kiselyov: So this thought never occurred to you?

V. Putin: No. What for? Weapons exist to be used. We have our own principles, what do they talk about? That we are ready to use weapons, including any weapons, including those you mentioned, if we are talking about the existence of the Russian state, about damaging our sovereignty and independence. We have everything spelled out in our Strategy. We didn’t change it.

D. Kiselyov: Vladimir Vladimirovich, when the outgoing President Yeltsin invited you to run for president, your first reaction was: “I’m not ready.”

Vladimir Putin: Exactly, this is direct speech.

D. Kiselyov: Since then, you, of course, have undergone a great evolution. If you had to write a telegram to yourself at that time, what text would it contain?

Vladimir Putin: You see, it’s like “A Yankee in King Arthur’s Court” or something like that. It is impossible to answer this question because the question was asked at that time, in the historical and economic context in which the country was located, in the internal political situation from the point of view of internal security. And all this together prompted me to the answer I gave: “I’m not ready for this.” Not because I was afraid of anything, but because the scale of the tasks was enormous, and the number of problems grew every day like a snowball. Therefore, I said sincerely and not because, I repeat, I was afraid of something, but because I thought that I was not ready to solve all these problems, God forbid, I would do something even worse. That’s what we were talking about. Therefore, I said absolutely sincerely and, if I went back, I would repeat the same thing.

D. Kiselyov: What was decisive then? You went after all.

Vladimir Putin: Probably conversations with Boris Nikolayevich.

The most important thing is that in the end he answered me: “Okay, okay, I understand, we’ll come back to this later.” And we returned to this several times.

In the end, he said that I am an experienced person, I know what I do, what I offer, and he told me some other things. It’s probably awkward to praise yourself, but I said such positive words. Later he confirmed this again, in a completely positive way, I won’t talk about it now.

And when the work started, everything was completely different there. You know, when you work, you think: this, this, this is needed right now, this now, this tomorrow – and off and on. When you get involved in work, it’s a completely different story.

D. Kiselyov: There is no time to be afraid anymore.

Vladimir Putin: It’s not a matter of fear, it’s a matter of understanding, the ability to solve these problems. Remember what 1999 was like in the economy, in the security sphere, in finance – in everything.

D. Kiselyov: You once said that preparing to enter Leningrad University was a turning point for you. This was the situation when you had to go for broke, realizing: either I will do it now and cope, and then I will carry out the plans that I want (and you were already planning to work in the KGB), or I lost, and then everything is different and there is no chance. So, is Russia now also in a position where it is necessary to go all-in?

Vladimir Putin: Firstly, I did not have such a position then. Yes, I wanted to work in state security agencies.

D. Kiselyov: It was the admission, it was such a turning point, this feeling, right? Either this or this?

Vladimir Putin: Not really. I just came to the reception and said: “I would like to work. What is needed for this?

The alternative was simple, they told me: I need to either get a higher education, preferably a law degree, or serve in the army, or have at least three years of work experience, but it’s better to serve in the army. If I hadn’t gotten into university, I would have joined the army.

Yes, this might have been a longer path to the goal that I set for myself, but it was still there. There is always an alternative.

D. Kiselyov: But you acted with tension.

V. Putin: Yes, of course, because I studied at a school with a chemistry and mathematics focus, but here I had to take humanities subjects. I had to leave one thing and do another.

Yes, of course, there was tension. It was necessary to independently learn a foreign language, German in this case, it was necessary to study history, literature, and so on.

D. Kiselyov: Russia is now also at a crossroads: either it works out, or…

Vladimir Putin: Russia is not at a crossroads. It is on the strategic path of its development and will not deviate from its path.

D. Kiselyov: To what extent do you feel the support of Russian society in its new capacity? After all, a new quality of Russian society has emerged.

Vladimir Putin: It was there, it just manifested itself. And it’s very good that we gave this deep Russian society the opportunity to express itself. I have a feeling that people have been waiting for this for a long time, that an ordinary person will be in demand by the country and the state and the fate of the country depends on him. It was this feeling of an internal connection with the Motherland, with the Fatherland, of one’s importance in solving key problems, in this case in the field of security, that raised the strength of the Russian and other peoples of Russia to the surface.

D. Kiselyov: Are you fueled by this?

Vladimir Putin: Always. The point is not even that someone is being fed, the point is that I see the demands of society. This is the most important thing – to meet the demands of society.

D. Kiselyov: But it’s time to admit that you play a key role not only in Russia, but also in the world, because billions of people pin their hopes on you for international justice, for the protection of human dignity, for the protection of traditional values. What is it like to feel such a scale of responsibility?

Vladimir Putin: To tell you honestly, I don’t feel this at all. I simply work in the interests of Russia, in the interests of our people. Yes, I understand what you are talking about now, and I am ready to comment on it. But in such a way that I feel like some kind of arbiter of the world’s destinies, there is no such thing. Believe me, it’s not even close. I am simply fulfilling my duty to Russia and to our people who consider Russia their Motherland.

As for other countries in the world, this is very closely related to how we are treated throughout the world. This is interesting. This is a phenomenon, that’s for sure.

What would you like to draw attention to? Here you are absolutely right, many people in the world are looking at us, at what is happening in our country and in our struggle for our interests.

This, in my opinion, is what is important. Why is this happening? Not because we are formally members of BRICS or we have some kind of traditional relations with Africa. This is also important, but the point, in my opinion, is completely different. It lies in the fact that this so-called golden billion for centuries, 500 years, practically parasitized other nations. They tore apart the unfortunate peoples of Africa, they exploited Latin America, exploited the countries of Asia, and, of course, no one forgot about this. I have a feeling that it’s not even about the leadership of these countries, although this is very important, but ordinary citizens of these countries feel in their hearts what is happening.

They associate our struggle for their independence and true sovereignty with their aspirations for their own sovereignty and independent development. But this is aggravated by the fact that the Western elites have a very strong desire to freeze the existing unfair state of affairs in international affairs. They have been accustomed for centuries to fill their bellies with human flesh and their pockets with money. But they must understand that the vampire ball is ending.

D. Kiselyov: Are you hinting at their, as you put it in your address, colonial habits? You’re talking about this.

Vladimir Putin: This is how everything happens.

D. Kiselyov: But now you have painted a completely fair picture, when people see some kind of hope in Russia. How did it happen that Western propaganda, with all its power, its colossal resources and tools, could not pupate Russia, isolate it and create a false image for it, although it tried to do so in the minds of billions of people? How did this happen?

V. Putin: Because what I just said is more important for people. People all over the world feel this in their hearts. They don’t even need any pragmatic explanations for the events taking place.

D. Kiselyov: That is, despite the wave of this dirt?

V. Putin: Yes. In their own countries they also fool people, and this has an effect. They – in many countries – believe that this is in their interests, because they do not want to have such a huge country like Russia on their borders. The largest in the world in terms of territory, the largest in Europe in terms of population – not such a large population in global terms, cannot be compared with either China or India, but the largest in Europe – and now also the fifth largest in the world in size economy. Well, why do we need such a competitor? They think: no, it’s better, as some American experts suggested, to divide it into three, four, five parts – it will be better for everyone. They proceed from this.

And part, at least, of the Western elites, blinded by their Russophobia, were delighted when they brought us to the point after which our attempts to stop the war unleashed by the West in Ukraine began in 2014 by force, when we moved on to conducting a special military operation. They were even happy, I think. Because they believed that now they would finish with us, now, under this barrage of sanctions, practically a sanction war declared on us, with the help of Western weapons and war at the hands of Ukrainian nationalists, they would finish with Russia. This is where the slogan came from: “Inflict strategic defeat on Russia on the battlefield.”

But later the realization came that this was unlikely, and even later that it was impossible. And the understanding came that instead of strategic defeat, they were faced with powerlessness, and powerlessness, despite the fact that they relied on the power of the all-powerful United States. We were faced with powerlessness before the unity of the Russian people, before the fundamental foundations of the Russian financial and economic system, its stability and before the growing capabilities of the Armed Forces of the Russian Federation.

And then they began to think – those who were smarter began to think – that it would be necessary to change some kind of strategy in relation to the Russian Federation. Then the idea arose to resume the negotiation process, to find some way to end this conflict, to look for where Russia’s real interests lie. These are dangerous people, by the way, because people who are guided by such base principles are easier to fight.

Do you remember what they used to say in Rus’? What was the happiness of some people at the everyday level? Full, drunk and with tobacco on his nose. Yes? It’s easier with people like this when you’re full and drunk, that is, full, drunk. The nose is covered in tobacco because they used snuff. Now my nose is covered in cocaine. It doesn’t matter, with such people it’s easier, but with smart people it’s more difficult – they are more dangerous, because they influence the consciousness of society, including ours, they will throw out all sorts of their “wants” under the guise of “carrots” for us.

You already drew attention to this when you asked about the possibility of a negotiation process. But nonetheless. This is where contradictions arose within the Western community. This is an obvious thing, we see it.

We are not going to engage in splits there; they will do that themselves brilliantly. But we will certainly strive to ensure that our interests are respected.

D. Kiselyov: I can’t help but ask. These attacks on the Belgorod and Kursk regions are military actions that are taking place in our regions. They act more brazenly – do they feel something? What causes this?

Vladimir Putin: The explanation is very simple. All this is happening against the backdrop of failures on the line of contact, on the front line. They did not achieve any of the goals they set for themselves last year. Moreover, now the initiative has completely passed to our Armed Forces. Everyone knows this, everyone admits it. I don’t think I’ll say anything new here. Against the backdrop of those failures, they need to show at least something, and, mainly, attention should be focused on the information side of the matter.

On the state border line, the enemy tried to attack primarily with sabotage groups. The latest report of the General Staff: somewhere up to 300 people, including the participation of foreign mercenaries. The enemy’s losses amounted to more than 200 people – about 230. Of the eight tanks used, the enemy lost seven, of nine armored vehicles – nine, of which seven were American-made, Bradley. Other armored vehicles were also used, but mainly for transporting personnel: they bring them up, drop them off and immediately leave. This is on the Belgorod section of the border. A little further south, in my opinion, in one place – there are much smaller forces there. Nevertheless, the main goal, I have no doubt about it, is to, if not disrupt the presidential elections in Russia, then at least somehow interfere with the normal process of expressing the will of citizens. First.

Second. This is the information effect that I have already mentioned.

Third. If at least something works out, to get some chance, some argument, some trump card in a possible future negotiation process: we will return this to you, and you will return this to us.

But I said that it is easier to talk to people who are guided by the principles: well-fed, drunk and with their nose in the known material, because you can calculate what they are going to do. They will also try in some other areas, but we see it.

D. Kiselyov: We mentioned the episode when you saved children from a fire, but you already have grandchildren. Which country would you like to leave to your grandchildren?

V. Putin: You know, at the first stage we need to fulfill everything that was stated in the Address to the Federal Assembly a few days ago. We have big plans. They are of a very specific nature in the areas of economic development, social development, support for motherhood, childhood, families with children, and support for pensioners. We have been talking very little about this lately or not talking about it, but here too we are sure to lay down the appropriate resources. This concerns the indexation of pensions, various benefits, and long-term care for people who need it.

I would like to say that people of the older generation are the ones thanks to whom we today have a fairly strong, stable statehood and economy as well. Because, despite all the vicissitudes and difficult trials for the economy in the 90s, it survived thanks to their heroic work after the Great Patriotic War and during the economic recovery. Therefore, we should never forget about this – the merits of the older generation. We must always remember this when ensuring their proper well-being. The future belongs to children, which is why I already spoke about programs in the field of motherhood and childhood.

All this is done only on the basis of economics. I hope that our system will be more technologically advanced, more modern, and will be based on modern achievements in science and technology, information technology, artificial intelligence, robotics, genetics, and so on. Our agriculture is developing so well! And there we also need modern technologies. They are actively used and will continue to be used.

Of course, the country will be self-sufficient in ensuring its security and defense. Together we will have to multiply all this many times over – and the future will be secured.

D. Kiselyov: Thank you, Vladimir Vladimirovich. Your confidence is infectious. Good luck in your noble deeds.

Vladimir Putin: Thank you.

D. Kiselyov: Thank you.