Rubles instead of “toxic” currencies
Putin wants to further decouple Russia from the West
07.06.2024, 17:12
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Russia’s government wants to further increase the distance to the West. To do this, Putin wants to deepen economic relations with the BRICS countries. Instead of imports, Moscow wants to strengthen domestic production and make it more competitive, the Kremlin chief announced.
Russian President Vladimir Putin wants to make his country increasingly economically independent from the West. Russia must reduce its imports, use non-Western currencies more in trade and significantly expand its domestic financial markets, Putin said at the International Economic Forum in St. Petersburg. Trade with Asia is currently increasing and almost 40 percent of Russian foreign trade is now conducted in rubles. In contrast, trade conducted in dollars, euros and other Western currencies is declining.
According to Putin, Russia will try to increase the share of transactions settled in the currencies of the BRICS countries. The group includes countries such as Brazil, Russia, India, China and South Africa. The Kremlin chief also said that the development of a payment system independent of the USA is continuing. The system must be independent of political pressure in order to process payments between states. Russia itself is largely excluded from the Western system and has developed its own credit card system.
“Last year, the share of payments for Russian exports in the so-called ‘toxic’ currencies of unfriendly states was halved,” Putin said, repeatedly alluding to mostly Western countries that have imposed sanctions on Russia because of its war of aggression in Ukraine. “The share of the ruble in export and import transactions is growing – it is now approaching 40 percent,” he stressed.
War spending boosts economy
Russia must reduce its imports by building up competitive production and increasing investment in fixed assets by 60 percent by 2030, Putin said. He added that the value of the Russian stock market should double by the end of the decade and then account for two-thirds of Russia’s economic power. Gross domestic product is currently growing despite Western sanctions. The government in Moscow expects growth of 2.8 percent for 2024. Last year, at 3.6 percent, growth was even stronger than in the USA or the European Union.
The recovery was fuelled by high spending on defence and security as a result of the war. However, economists argue that the growth is based on state-funded arms and munitions production. This conceals problems that are preventing the population from improving their standard of living.
Despite the limited economic contacts, many entrepreneurs from Western countries are attending the economic forum, including from the USA and the EU. At the beginning of the meeting, which has been running since Wednesday and ends this Saturday, Russian politicians and entrepreneurs stressed that the country is preparing for a long military conflict. The war economy could now shape the economy of the nuclear power for years to come, it was said at events at the forum.