The President addressed, via videoconference, the first working session of the heads of delegations of the G20 member countries, invited states and international organisations.
Speech at the first session of the G20 Summit
President of Russia Vladimir Putin: Chairman Draghi, colleagues,
I shall speak on the topics that were put forward by Italy for today’s discussion: the global economy and global health.
I should say straight away that this theme largely concerns what we are all working on, and Russia’s position, as I saw from the previous speeches, mainly overlaps with what our colleagues spoke about here.
Last year the economic authorities of the G20 member countries and many other countries decided to significantly increase their budget deficits against the backdrop of the deep crisis caused by the pandemic, which allowed for launching global economic recovery. However, such extraordinary measure accompanied by securities buyouts by central banks should be limited in time. In fact, this is what was said here earlier.
In Russia, for example, the budget deficit rose to four percent of the GDP in 2020 against the background of large-scale support measures for the population, small and medium-sized businesses, and the healthcare system. This allowed us to achieve a recovery of the labour market. In the current year we have normalised our macroeconomic policy to the point that the budget will be in the surplus. We have not only achieved that, but we have also tightened out monetary policy.
Overall, the situation in G20 countries is slightly different. While in 2017–2019, the average budget deficit was around 3.8 percent of GDP, it grew to 11.2 percent in 2020 amidst the pandemic. This year, although slightly lower, the budget deficit remains rather high at 8.7 percent. I would like to note that the United States will account for 40 percent of the G20 countries’ budget deficits combined in 2020–2021. I am saying this because we all understand very well that the state of the US economy is what determines the state of the global economy.
Excessive stimulation has resulted in the general lack of stability, growing prices of financial assets and goods in certain markets such as energy, food, etc. Once again, significant budget deficits in the developed economies are the main cause of these developments. With these deficits persisting, there is a risk of high global inflation in the medium term, which not only increases the risk of lower business activity but reinforces and exacerbates the inequality that was also mentioned today.
That is why it is important to prevent aggravating stagflation and instead do what can be done to normalise the budgetary and monetary policies, improve the quality of demand management in the economy and update economic priorities – and primarily prioritise overcoming inequality and boosting public welfare.
We have always welcomed and continue to welcome the efforts of the G20 to support the poorest countries. I agree with those who have already said that sustainable growth of the global economy is, of course, impossible unless this issue is addressed. By the way, the developed countries, including many of the G20 states, have recently been affected by inequality and poverty. It is important to deal with this problem by means of economic and budgetary policy.
I would like to point out that, despite the decisions of the G20, vaccines and other vital resources are still not available to all the countries in need. Among other reasons, this is due to competition, which is dishonest, in my opinion, as well as protectionism and the fact that certain countries, including G20 countries, are not ready for mutual recognition of the vaccines and vaccination certificates.
There is an urgent need for the World Health Organisation to expedite the pre-qualification of new vaccines and drugs – that is, to evaluate their quality, safety and effectiveness. I am convinced that the sooner this is accomplished, the easier it will be to resume global business activity, including tourism, which has been hit the hardest.
I propose instructing healthcare ministries of the G20 to address the matter of mutual recognition of national vaccination certificates within the shortest possible term.
Experts believe that COVID-19 will continue to be a threat for a long time. I think WHO representatives will speak about this today as well. Considering that the virus continues mutating, we should develop mechanisms to boost vaccines promptly and consistently.
I would like to remind you that Russia was the first country in the world to register a COVID-19 vaccine, Sputnik V. Currently, this vaccine is approved in 70 countries with a total population of over 4 billion people, and it has demonstrated high safety and effectiveness. In addition to the double-dose Sputnik V, we also developed and widely use a single-dose vaccine, Sputnik Light, which can boost the effect of other vaccines. We are working with our colleagues from Europe on having this vaccine available there and offering it to our partners.
Large-scale efforts to counter the coronavirus require higher-quality and more affordable medical care in all countries and, therefore, wider international cooperation in healthcare. In view of the current situation, the role of the World Health Organisation is becoming increasingly important and its activities, of course, deserve our full support. It is unacceptable to make attempts to impinge upon the prerogatives of the WHO, which operates under the aegis of the United Nations. In this context, I fully agree with the President of France, Mr Macron.
In addition to the pandemic, other crises on the regional energy markets have shown once again how essential it is for the modern world to have a stable and reliable energy sector. I would like to say a few words about this. Supplying affordable energy to consumers is extremely important and our colleagues have just talked about it. I would like to add that the stability of global energy markets directly depends on the responsible conduct of all market participants, both energy producers and energy consumers, with due account for each party’s long-term interests.
Russia supports having an in-depth pragmatic discussion of this matter, based on purely economic considerations.
Creating conditions for an equal and non-discriminatory cooperation for all nations is the main prerequisite for a steady and long-term recovery of the global economy, higher quality of life and better public welfare. As we understand, this is the key goal for the G20 as a forum of the world’s leading economies.
Thank you very much.