Following nearly two years of conflict with Ukraine and numerous Western sanctions, the Russian economy is not developing in the direction it had hoped.
Russian President Vladimir Putin gave a speech at VTB’s annual investment conference “Russia Calling!” Putin began by listing Russia’s recent macroeconomic successes: GDP grew by 5% year-on-year in October and by 3.2% in January-October.
According to Putin, the economy is already bigger than it was before the war began:
So, over the ten months of this year, Russia’s gross domestic product grew by 3.2%. Today it is already higher than it was before the Western sanctions attack.
He went on to say that by the end of the year, growth will be at least 3.5%, well ahead of official forecasts and those of other international financial institutions (IFIs). And this good economic news is being felt on the streets: real wages in Russia are up 7% year-on-year and real disposable income (the money in people’s pockets) is up 4.4%.
Putin said that even Russia’s adversaries are noticing these changes, but he went on to say that the world has entered a new challenging period:
The world has entered an era of fundamental changes and serious challenges. This concerns not only individual companies and industries, but also entire world countries and regions.
The Russian President went on to talk about the West as the source of the breakdown of world trade and the abolition of globalization:
Everybody should be in equal conditions, everybody should be placed in such equal conditions, and borders should be opened! Borders should not be closed in any case! How is that?! This contradicts ideas of global development. As soon as competitors appeared – bang! They started closing their borders immediately, at their fingertips, at a moment. That’s all; these are all the principles.
Russia’s new multipolar approach has paid dividends, as its trade with the non-aligned and other BRICS countries has flourished. In November, Russia’s trade with China surpassed its target of $200 billion a year, offsetting much of the decline in trade with Europe.
“Thank God, our relations with China have been extremely effective. We set the task of reaching a $200 billion trade next [year] or in the coming years. I think nobody has doubts that we will hit $200 billion as early as this year.”
According to the latest trade statistics, exports from China to Russia rose by 50.2% to about $100.33 billion in eleven months, while imports of goods and services from Russia rose by 11.8% to $117.84 billion. Mutual trade has already surpassed the $200 billion mark.
“As for China, we are ready to co-operate in all areas, we have no restrictions. This applies, by the way, to military technologies as well,” Putin stressed.
To emphasise Russia’s expanding international ties, Putin has just returned from a trip to the Middle East, where he held talks with the leaders of the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA). At Putin’s meeting with Crown Prince Mohammed bin Salman (MBS) a day earlier, Russia and Saudi Arabia agreed to expand cooperation within the OPEC+ oil cartel, as well as other projects.
“The two sides agreed on the importance of expanding cooperation in the following areas: oil and gas, such as procurement, supply and standardisation of equipment in the field of oil and gas, research and development services in the field of oil, gas and petrochemicals, assessment of the use of modern technologies in this field between companies of the two countries,” a joint Russo-Saudi statement said issued following the meeting.
On the day of the conference, Iranian President Ebrahim Raisi arrived in Moscow on an official visit to continue talks on deepening cooperation. The President of the Islamic Republic of Iran noted that Russian-Iranian cooperation “still has room for development.”
These relations are rapidly moving beyond simple trade deals as both Russia and China attempt to institutionalise clubs that bring together countries in the global South. Russia is working to improve its ties not only with the East, but also with the South and the Middle East, adding to its already good relations with many African countries.
