Oliver Stone - The Putin Interviews

OS:You’re paying, what is it, 83 percent of the Chechnyan budget? [92] Claim: “You’re paying, what is it, 83 percent of the Chechnyan budget?” Supporting: Oliver Stone is quite correct that Russia is providing over 80%, and up to 90%, of Chechnya’s budget. “Russian Anger Grows Over Chechnya Subsidies,” Michael Schwirtz, New York Times (Oct. 8, 2011). Retrieved at: http://www.nytimes.com/2011/10/09/world/europe/chechnyas-costs-stir-anger-as-russia-approaches-elections.html

VP:It’s not just about the Chechen Republic. Our financial and economic policy is aimed at evening out the standard of living and the income of all constituent entities of the Russian Federation and all the citizens of the Russian Federation wherever they live. Certainly we are not doing that to the fullest. There are certain regions where standards of living are higher, in other regions standards of living are lower. The level of manufacturing or of income is either higher or lower depending on the region, but from those regions that are capable of making a contribution to the federal budget, we’re trying to redistribute incomes to those regions that are lacking their own income. We’re trying to help them catch up, as far as their level of production is concerned.

OS:The food prices went up 20 percent in 2015. Inflation was running at 13 percent.

VP:12.9 percent, to be more precise.

OS:[laughter] You’ve said that 2016 will be better, but what happened in January was that oil slumped below $30. It’s a hard promise to keep that 2016 was going to get better.

VP:That’s true, but there are two ways to go about it. One way is to fulfill all of the promises without thinking of the consequences, using the reserves that I’ve mentioned. But the second way is to seek the expansion of non-raw materials sectors of the economy and fulfill the social obligations we have using the generation capacity of our economy. I believe that we are following a balanced approach. We are trying to fulfil our social promises, our social obligations first and foremost. But in a manner that will not destroy the economy, should not undermine it. Meanwhile, we are trying to provide support to those industries that have been most affected by the crisis.

OS:Well, worker unrest is an issue. People haven’t been paid in some regions. A great amount has been written about it in the West. People have not been paid—sometimes for one, two, three months.

VP:Well, there are these technical issues related to the arrears in payment—paying the salary, but it’s minimum. There are no real problems with paying the salary. There are only issues related to irresponsibility, to negligence, to making decision too late, but economically and from the point of view of the budget, there are no problems whatsoever. [93] Claim: “ OS: Well, worker unrest is an issue. People haven’t been paid in some regions. A great amount has been written about it in the West. People have not been paid sometimes one, two, three months. VP: Well, there are these technical issues related to the arrears in payment—paying the salary, but it’s minimum. There are no real problems with paying the salary. There are only issues related to irresponsibility, to negligence, to making decision too late, but economically and from the point of view of the budget, there are no problems whatsoever.” Contradicting: It does appear, as Oliver Stone relates, and contrary to what Putin says, that there is a problem with some workers not getting paid in Russia. See, “Unpaid Workers Unite in Protest Against Putin,” Andrew E. Kramer, New York Times (April 21, 2015). Retrieved at: https://www.nytimes.com/2015/04/22/world/europe/russian-workers-take-aim-at-putin-as-economy-exacts-its-toll.html?_r=0 And if someone writes about that, saying that is a serious problem, then they are simply doing what’s called wishful thinking.

OS:What is the Russian Central Bank about? What is that doing?

VP:The central bank is adhering to a very balanced monetary policy. And it meets the understanding of international financial organizations including the International Monetary Fund.

OS:How so? I was told there were no debts to the IMF.

VP:No debts—I’m not talking about our debt right now. I’m talking about our monetary policy. We are in contact with Madame Lagarde and our colleagues from the IMF. We inform them about what we’re doing. We listen to their recommendations. And I know full well that the leadership of the IMF gives a good assessment to the policy of the Central Bank of Russia. Yes, their assessment is positive. [94] Background Information: It is true that Russia has quite recently received very high praise from the IMF for its economic policies. See, “Russia’s economy moves back to positive zone of growth – IMF Chief,” Tass News Agency (April 17, 2017). Retrieved at: http://tass.com/economy/941775 Also, because the central bank is taking balanced decisions on time related to the regulation of the national currency rate. And also related to the transition to a market approach to regulating the national currency exchange rate. As of now, the central bank has transitioned to a floating rate of ruble. It has led to depreciation of the ruble, which makes imports more expensive inside Russia. So that is not very good, not very comfortable for those who want to buy different products from abroad or China.

That’s not really good for those companies, for those enterprises that try to modernize thanks to products imported from abroad. So that is the negative side of the ruble depreciation. But there is also a positive side, which creates apparent benefits in the internal market for Russian producers. It also creates a better environment for Russian exports both in agriculture and also in manufacturing.

And if you compare these advantages and disadvantages, you will see there are more advantages than disadvantages. And in this sense, the policy the central bank is pursuing can be viewed as a balanced one and as justified. Furthermore the Central Bank is closely monitoring the situation in the banking sector. It is working coherently to improve the banking system in Russia. That is very important, to make this banking and financial system more viable, more competitive.

OS:Well, you still talk as if the IMF is a partner of Russia’s, and in some ways I know your struggles, but you act as if Wall Street wants Russia to succeed and I question that. And I would ask you: is Wall Street actively working to destroy the Russian economy in the interest of the United States?

VP:I’m not talking about Wall Street right now. But if we talk about the administration of the United States, then certainly the US administration has been viewing, especially recently, Russia as a rival. But we do hope nevertheless that such international institutions as the IMF, the World Bank, and a number of others are performing the functions they have been established to perform. And I refer to them having to have a positive influence on the world economy. Besides, we approach with some level of criticism all the recommendations that we receive. We do not have any obligation to these international organizations. And yet it is with respect that we view these recommendations and the ones that we believe are useful to us, we use.

OS:Who’s “we?” That’s a good question, because sometimes every government in the world, through history, the banks and the government can differ in their interpretation of events and what to do.

VP:When I say “we,” I mean the Russian leadership. I personally did have some difficult relations with the IMF when I became Chairman of the Russian government at the end of 1999.