3 Annual Big Press Conference Part 6
June 20, 2003
President of Russia V.Putin
VLADIMIR PUTIN: You know, I dont really like the word oligarch used to describe big business representatives in Russia. In the sense that we usually use this word, an oligarch is a person with stolen money, who continues to plunder the national wealth, using his special access to bodies of power and administration.
I am doing everything to make sure this situation never repeats in Russia, and among big business representatives today, I do not see anyone who acts in this way. Perhaps some of them try. Probably everyone involved in business always looks for ways to earn more money, and to do this as effectively and cheaply as possible. Societys task, our common task because both the state and the media should keep a very close eye on this is to make sure this situation does not arise in the country.
As for patriotism, capital as such is not patriotic in itself. Capital always flows to where the best conditions exist for its use, whatever you might say or desire. So our task is above all to create such conditions, and not cry about the fact that capital is flowing out.
As for the outflow of capital, here two qualities of the outflow need to be distinguished. The first is the criminal outflow of capital. We are actively working on this both within the country and with our partners abroad. As you know, yesterday Russia became a full member of the FATF an organisation which combats the laundering of dirty money. And I think that this is a good sign, it is an acknowledgement of Russias efforts in this direction. Russia really does a great deal in this area.
The second quality is the legal outflow of capital. According to our assessments and assessments by international experts, in 1999 the yearly outflow of capital from Russia was $24.8 billion, and in 2002 according to preliminary data, it was $11.2 billion, i.e. this figure has dropped by more than half. This is a good sign. It shows that Russia is gradually creating conditions for investment here, in Russia.
We are seeing a certain inflow of capital. I should tell you that after the Federal Republic of Germany I may be mistaken here, but not by much the second country for investment in Russia is, strangely enough, Cyprus. I assure you, that this is the return of Russian capital that was taken out of the country in the past. And Russia is not unique here. In all regions of the world, at all times, if after a period of outflow of capital, acceptable, favourable conditions for investment are created in a country, the repatriation of capital begins. We are seeing this return, so far in small volumes, but noticeable ones. And this is a pleasing fact, a positive phenomenon.
QUESTION (Krasnodar): Vladimir Vladimirovich, there are two problems in Russia a good harvest and a bad harvest, because either way prices on flour and bread rise.
Last year intervention on the grain market was delayed, and this year in Kuban and the entire south of Russia there is a drought, and urgent aid is required.
My question is this. If the market mechanism fails, why is state aid ineffective? How can we make sure that it is not late, that it comes on time and in the necessary amount?