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Bidding Farewell To The American Century




Like Cicero in the Roman Republic, there are always a handful of chroniclers who can see and articulate clearly the social, cultural, and political realities of empires in terminal decline. They call out the bankruptcy of an inept and corrupt ruling class, blinded by hubris, as well as a populace that has checked out of civic life and is entranced by bread and circus spectacles. In his trilogy BlowbackThe Sorrows of Empire, and Nemesis: The Last Days of the American Republic, Chambers Johnson does a masterful job of showing how and why we are disintegrating. So does Andrew Bacevich, who, in his newest book of essays, On Shedding an Obsolete Past: Bidding Farewell to the American Century, writes about the debacles that have beset the American empire since the Vietnam War, a conflict he fought in as a young army officer. Bacevich warns that Americans’ inability to be self-critical, to dissect and understand the litany of disasters that have followed on the heels of Vietnam, including decades of fruitless warfare in the Middle East, will have terrible consequences for us and much of the rest of the globe.

Andrew Bacevich is a retired army colonel and Emeritus Professor of History and International Relations at Boston University. He is the cofounder and president of the Quincy Institute for Responsible Statecraft, and the author of numerous books, including The New American MilitarismThe Limits of Power: The End of American ExceptionalismAmerica’s War for the Greater Middle East, and After the Apocalypse: America’s Role in a World Transformed.

Studio Production: David Hebden, Cameron Granadino
Post-Production: Adam Coley
Audio Post-Production: Tommy Harron


Chris Hedges:  At the end of any empire, there are always a handful of chroniclers who, like Cicero in the ancient Roman Republic, see clearly the looming disintegration of empire. They call out the bankruptcy of an inept and corrupt ruling class blinded by hubris, as well as a populace that has checked out of civic life and is entranced by the bread and circus of spectacles. Chambers Johnson in his trilogy on American empire: Blowback; The Sorrows of Empire; and Nemesis: The Last Days of the American Republic does a masterful job of showing how and why we are disintegrating.

So does Andrew Bacevich, who in his newest book of essays, On Shedding an Obsolete Past: Bidding Farewell to the American Century, writes about the debacles that have beset the American empire since the Vietnam War, a conflict he fought in as a young Army officer. He warns that our inability to be self-critical, to dissect and understand the litany of disasters that have followed on the heels of Vietnam, including the 20 years of fruitless warfare in the Middle East, will have terrible consequences for us and much of the rest of the globe.

Joining me to discuss his new book is Andrew Bacevich, the president and co-founder of the Quincy Institute for Responsible Statecraft. A West Point graduate and retired Army colonel. He is also professor emeritus of History and International Relations at Boston University. His other books include The New American Militarism; The Limits of Power; America’s War for the Greater Middle East; and After The Apocalypse: America’s Role in a World Transformed.

Andrew, I want to begin with what you call the Church of America the Redeemer. You say this is a virtual congregation, albeit one possessing many of the attributes of a more traditional religion. The church has its own holy scripture, authenticated on July 4, 1776 at a gathering of 56 prophets, and it has its own saints, prominent among them, the good Thomas Jefferson, chief author of the sacred text – Not the bad Thomas Jefferson, who owned and impregnated enslaved people – Talk about the Church of America the Redeemer, and what happens when you don’t pay fealty to that church?

Andrew Bacevich:  Well, if you don’t pay fealty to it, I think you probably get ignored and end up being somewhat frustrated, which would be, I think, the way I would describe myself with regard to my writing efforts. But what’s the Church of the Redeemer? Well, I guess the essay itself is another way of approaching and commenting on the notion of American exceptionalism, which rests on a conviction that we are, indeed, the chosen people, the new chosen people, and as the new chosen people, that we have a divinely inspired mission. And the mission is to transform the world in our own image. This, I think, is something that, in many respects, we can trace back to the founding of the republic, even to the colonial era. I think it is something that really achieved maturity beginning in 1945 and has persisted down to the present moment despite the accumulation of evidence that says that we’re not exceptional, and that the prophets that we look to in many respects have feet of clay.

Chris Hedges:  I mean, 1945, you could argue that after World War II, of course, in many ways, at least for some parts of the world, and particularly Europe, America was the redeemer. And yet, since Vietnam, this kind of rhetoric is at complete odds with the reality of how we project power and what we do in the world. And I want you just to address that disconnect between the language we use to describe ourselves to ourselves and what’s actually happening.

Andrew Bacevich:  What a great question, and I can’t give you a satisfactory answer. The persistence of myth when facts and reality contradict the myth is a bit of a puzzle. You’ve put your finger, I think, on the key point, and that is that even if at the end of World War II, and arguably for the next couple of decades, it would be at least plausible to be patting ourselves on the back as the savior of the world, that notion has become implausible since Vietnam. There was an effort to revive it in the aftermath of 9/11 when George W. Bush embarked upon his great crusade, the one that we called global war on terrorism. Certainly the expectations that informed the invasion of Iraq in 2003 traced their origin back to the claims made at the end of World War II and early in the Cold War. But we saw in Iraq that the facts simply demolished those expectations.

So you put your finger on the main question, I think: why does the myth persist? Again, I don’t have a very good answer, although I think that, to some degree, it persists because those who wield power in the United States, whether we’re talking political power, economic power, those who wield power have an interest in sustaining the myth. Because as long as the myth persists, so does their elevated status.

Chris Hedges:  Well, if their reference point is Vietnam or the 20-year debacle in the Middle East, the myth itself implodes. And so, in a way, it has to be anchored in the past, because it’s impossible to anchor it in the present.

Andrew Bacevich:  But in a way it doesn’t implode. I mean, it ought to implode.

Chris Hedges:  Right.

Andrew Bacevich:  Let’s talk about the Afghanistan War. Longest war in our country’s history – Not the biggest, by any means, if we look at the number of Americans and other than Americans killed, wounded. The most expensive, I think, arguably, in terms of dollar cost. 20-year effort, ends in abject failure. And one might say, well, obviously, clearly then the nation is going to step back and reflect deeply on the cause and consequences of this failure. But as you know and I know, that didn’t happen. I mean, it is astonishing how quickly both our political elites in Washington and the country more broadly have turned aside from Afghanistan. And now today, as you and I speak, we’re all gung-ho to wage a proxy war, underline a proxy war in Ukraine, as if the debacle of Afghanistan, the parallel debacle of Iraq, never happened.

Chris Hedges:  Well, there was a story, I can’t remember if it was Churchill or somebody went to Paris after World War II, and the French were talking about lessons of the war, and it was all about World War I, which of course they won. But it has something of that kind of utter denial of reality because reality is just so unpalatable. And I wonder if that’s a feature of all late empires, where no one’s held accountable, there’s no self reflection, and it’s a collective self-delusion. Does that characterize… I think you could argue it characterizes any late empire.

Andrew Bacevich:  Yeah, I’m not a student of comparative empires, but if we take the little I know of a couple of cases, one would be France. France, in the wake of World War II, determined to cling to its empire in Indochina and in Algeria, an effort that came nowhere near to succeeding and simply exacted great costs, both of France and of these former colonial territories. That was an empire that didn’t learn, that was an empire that didn’t read the writings on the wall.

I think you can say the same thing about the Brits. Certainly, in the wake of World War II, British leaders recognized that the pre-war British Empire was unsustainable, but they exerted themselves to try to maintain a privileged status. And that didn’t work. And I think here the most illustrative case is the Suez crisis of 1956, when the Brits tried to reassert control of the Suez Canal, and more broadly were attempting to reassert indirect control of Egypt, and I suppose more broadly of the Middle East. And of course that flopped terribly. So yeah, it’s not just us. I think you probably can make a case that empires cling to the past even when the signs clearly indicate that there’s no way to resuscitate the past.

Chris Hedges:  I want to ask you a question as a historian. You quote the great historian, Carl Becker, “For all practical purposes, history is for us, and for the time being, what we know it to be.” And then you go on and say, “The study of the past may reveal truths, Becker allowed, but those truths are contingent, incomplete, invalid only for the time being. Put another way, historical perspectives conceived in what Becker termed the ‘specious present’ have a sell-by date.” Can you explain that idea?

Andrew Bacevich:  Well, and that’s not the past that Americans want to conjure up. We want to be able to pick the parts of the past that are relevant. I think, absolutely, the classic example of this is the run-up to World War II, the narrative that everybody knows: the failed effort to appease Hitler, American reluctance to intervene in the European war, once it began, on behalf of Great Britain. These are the shake-your-finger lessons that have persisted since then down to the present moment.

Another way, I think, of saying that is that our prevailing notions of history are exceedingly narrow and exceedingly selective. And basically the process of selection is one that aims to reassure ourselves. To reassure ourselves that the myths that we believe in can be sustained. That disappointments, whether it’s the disappointment of the Vietnam War, whether it’s the disappointment of the Afghanistan war, that those are mere merely passing moments, and that if we exert ourselves, if we try hard enough, if we send our soldiers off to enough wars, that we can somehow turn this thing around. I think that’s very much what’s going on with regard to the US proxy participation in the Ukraine War, that, by God, if we can defeat Russia, then we’ll be back on top. We’ll be number one. Let the Chinese see what we’ve done to the Russians, and then let’s see what they say at that time. But it all involves this… Recognize the truths, the realities that I want to and ignore the ones that I find inconvenient.

Chris Hedges:  You write that the process of formulating new history to supplant the old is organic rather than contrived – And this is the point I found really interesting – It comes from the bottom up, not the top down. What do you mean by that?

Andrew Bacevich:  Well, I think I was suggesting what it ought to be. It ought to be organic, that we ought to recognize voices that, perhaps, have been ignored or taken less than seriously. I think here an example is the 1619 Project, although it cuts both ways. I’m a critic of the 1619 Project. I think that the effort to – And people will accuse me of being unfair to the supporters of that project – But I think the notion of contriving a new narrative of American history that basically revolves around the African American experience goes too far. That doesn’t say that it’s wrong. I think it’s not wrong. And I think the positive aspect of the 1619 Project – And it’s achieving great success in that regard – Is that it does belatedly provide due acknowledgement of the place of Black Americans in our history, going all the way back to the founding of Anglo America in the early part of the 17th century.

So Black Americans are no longer a footnote. They’re no longer the people we say, well, we credit them for the creation of jazz. Or, wasn’t Jackie Robinson a wonderful guy? That they now become integral to the larger narrative. I guess my problem is that integral to the narrative should not mean taking over the narrative, that there is another story. And I think a proper appreciation of history would certainly acknowledge the role of African Americans since the founding of Anglo America. But also, we have to keep all the white guys in, and all the white women, and all the ethnic groups, and everybody else. It’s a complex story and we shouldn’t try to oversimplify it.

Chris Hedges:  Well, I don’t want to get into a debate on the 1619 Project. However, it’s not just about Blacks or African Americans, it’s about the institution of slavery as a social and an economic force and the reverberations of that institution, which white historians have sought to erase.

Andrew Bacevich:  Well, I’ll disagree with you a little bit. I don’t think they’ve sought to – Well, they tried to erase it until sometime in the 20th century, then I think it was acknowledged, but it tended to be treated as a peripheral issue. And the 1619 – Maybe I’m wrong – The 1619 Project says, no, it’s not peripheral, it’s central. And frankly, I’m willing to acknowledge central. I’m not willing to acknowledge dominant.

Chris Hedges:  Well, but it took until the ’50s till you got historians like Kenneth Stamp, Leon Litwack –

Andrew Bacevich:  John Whit Franklin.

Chris Hedges:  And then you had W. E. B. Du Bois, of course, but Du Bois was kind of pushed out of that narrative.

I want to talk about this, of what you call the present American moment. And you raised this question about, when it’s clear that a war is a mistake – We know from the Afghan papers that the policy makers and the military leaders understood that they were never going to quote-unquote, “win,” in Afghanistan. The same thing that they understood, we know, from the Vietnam War through the Pentagon Papers. But you ask why those in power insist on its perpetuation regardless of the costs and consequences. And that’s a question I want you to try and answer.

Andrew Bacevich:  It’s because they’re in power. They want to remain in power. And if George W. Bush had gone on national TV circa what, 2004, 2005, he went on TV and said, I got a great idea. It’s called the surge, and we’re going to persist. If he’d gone on TV and said, boy, we screwed up. This is a disaster, and I’m responsible for this disaster. Well, this would’ve been an act of great courage on his part, but it would’ve been quite surprising, because President George W. Bush, like every other president down to and including President Biden, sought power, achieved power, and will cling to power as long as possible. Not because they’re evil people, but because that’s the way politics works. And I think that’s one of the reasons why there’s so much dishonesty that permeates our politics, because the perceived penalties of honesty are unacceptable.

Chris Hedges:  But why does Obama perpetuate it? He didn’t start it. It wasn’t his war.

Andrew Bacevich:  Well [laughs], we’d have to ask him, I guess, but I think my answer is that we see frequent references to the president of the United States as the most powerful person on the planet. I think that’s wildly misleading. Whoever is US president actually wields pretty limited power. You and I could make a pretty long list of the things that presidents can’t do, might want to do but are unable to do because they are constrained. Constrained by circumstance globally, constrained by other nations, but they’re also constrained by circumstances at home.

And I think President Obama, who I hold in high regard, was an acutely intelligent politician who understood the constraints that he labored under and, to a large degree, accepted them. Now, we might regret that. We might say, God, I wish Obama had pushed harder to bring about the kind of change that he seemed to want. But I think that, at the end of the day, whether ’cause he was being advised or whether this was his own thinking, he conformed, he went along, he accepted the constraints. And I think that’s a reality of American politics. I suppose it’s a reality of politics wherever you are.

Chris Hedges:  You draw parallels between the Vietnam War and Iraq. I’m just going to run through them quickly and then have you comment. You say both were avoidable, both turned out to be superfluous. Both were costly distractions. In each instance, political leaders in Washington and senior commanders in the field collaborated in committing grievous blunders. Thanks to that incompetence, both devolved into self-inflicted quagmires. Both conflicts left behind a poisonous legacy of unrest, rancor, and bitterness – Although perhaps more so Vietnam. And finally, with both political and military elites alike, preferring simply to move on, neither war has received a proper accounting. To what extent has that inability to learn the lessons of Vietnam contributed to the debacles that we have repeated since Vietnam?

Andrew Bacevich:  I think to a very great extent. Now, I wouldn’t have said that, I think, 20 or 25 years ago. My own appreciation of Vietnam has substantially evolved, so that several of those items that you ticked off reflect the position I have more or less recently come to. When I was a serving soldier, very much accepting the framework of the Cold War as the proper lens to examine and think about international politics, it was possible to conclude that the Vietnam War was necessary. If you took seriously what turns out to be bogus, but if you took seriously the notion that there was this thing called monolithic communism that posed a threat to the well-being of the United States and of our allies, then you can make the case that it was necessary for the US to employ US forces to try to prevent the collapse of the Republic of Vietnam.

From where we are today, all of that is utterly bogus, and really makes you want to weep. I mean, that our leaders fell for such a load of crap, sold it to the American people, who bought it. We’re conscious of the anti-war movement. Okay, let’s be conscious of the number of American soldiers who were told to go fight in Southeast Asia and said, yes sir, yes sir, and followed orders. 58,000 people were killed, and we’re just talking the Americans. The number of Vietnamese killed, of course, was orders of magnitude greater, and for what? For nothing.

I’m meandering here, but I guess my point is that sometimes, at least for somebody like me, it takes a while to come to a proper understanding of the event and to put it in a historical context that is, if not entirely true, at least closer to the truth than what back in the day we were getting from Lyndon Johnson and Robert McNamara and Dean Ruskin and William Westmoreland. But sometimes it takes a while to figure all that out.

Chris Hedges:  Well, but those who do figure it out at the time – And I think this really represents your marginalization – Those who do figure it out in the moment and decry it are pushed to the margins.

Andrew Bacevich:  I think that’s true. I think that’s true. The power of the establishment, the influence of the establishment, the power of those myths that we referred to a little while ago, makes it very difficult to advance an alternative point of view and have it be embraced and accepted. And I think we have seen that over and over and over again with the most pernicious results.

Chris Hedges:  Well, you have a media that won’t disseminate it. We’re getting to the end, and I just want to read a passage you write towards the end of the book, “I am by temperament a conservative, and a traditionalist wary of revolutionary movements that more often than not end up being hijacked by nefarious plotters more interested in satisfying their own ambitions than pursuing high ideals. Yet, even I am prepared to admit that the status quo appears increasingly untenable. Incremental change will not suffice. The challenge of the moment is to embrace radicalism without succumbing to irresponsibility.” Can you explain what you mean by all that?

Andrew Bacevich:  [Laughs] I mean, I guess the pertinent question is what does this radicalism look like?

Chris Hedges:  Well, exactly.

Andrew Bacevich:  What does this radical –

Chris Hedges:  Yeah, there you go.

Andrew Bacevich:  I’m not sure I know, Chris. It took me a while to reach the conclusion that incremental change just isn’t going to hack it. I think that probably it was the Trump period that brought me to that conclusion. I’ve never believed that Trump himself is as important as the many in the mainstream media seem to want to pretend. But I think that the Trump moment, this nationalist populist reaction from the right signals that the republic is in serious danger. And I don’t know that incrementalism – Joe Biden is an incrementalist – I don’t know that incrementalist offers a sufficient response to what we experienced when Trump was riding high. But I don’t have the six-point plan that is going to move the country back in a better direction. I wish I did, but I don’t.

Chris Hedges:  Well, doesn’t it look something like FDR, the New Deal?

Andrew Bacevich:  Well… I don’t know. I mean, yes in the sense that’s, in my estimation, I think in many people’s estimation, he was far and away the most effective reformer of the 20th century down to the present moment. And that he himself was not a radical. In many respects he was a reformer. He had to reform the system in order to save the system. And he did that with not perfect skill, but very considerable skill. On the other hand, Chris, it’s not 1933. We are not the nation that we were in 1933 – 1933 being the year that the New Deal began. And so, as much as I admire what Roosevelt accomplished, and I genuinely do, I’m not sure that the New Deal actually serves as a proper blueprint.

Chris Hedges:  Well, because we’re post-industrial –

Andrew Bacevich:  Primarily in the realm –

Chris Hedges:  We’re a post-industrial society. That would be a big difference.

Andrew Bacevich:  That’s one big difference, I think. And also, the New Deal was designed to benefit white people.

Chris Hedges:  Well, yes.

Andrew Bacevich:  It was a predominantly white society, and Roosevelt treated African Americans as an afterthought. They were not excluded from the benefits of the New Deal, but certainly African Americans – Or, we say African Americans, or Brown Americans, or Native Americans, or Asian Americans, their interest did not figure in a large way in Roosevelt’s agenda. And today, a reform program would have to be far more inclusive, I think, than was the New Deal.

Chris Hedges:  Great. That was Andrew Bacevich, On Shedding an Obsolete Past: Bidding Farewell to the American Century. I want to thank The Real News Network and its production team: Cameron Granadino, Adam Coley, David Hebden, Darian Jones, and Kayla Rivara. You can find me at

World News

Australian National Review – Putin’s Response To WSJ’s Ann Simmons When Asked If He Wants To Rule The World





Putin’s Response to WSJ’s Ann Simmons When Asked If He Wants to Rule the World

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Vladimir Putin’s annual news conference


The President’s news conference was broadcast live by Rossiya 1, Rossiya 24, Channel One and NTV, as well as Mayak, Vesti FM and Radio Rossii radio stations.

Television channel Public Television of Russia (OTR) and its site ( provided live sign language interpretation of the news conference.

The host broadcaster of the event is the National State Television and Radio Broadcasting Company (VGTRK).

* * *

President of Russia Vladimir Putin: Good afternoon, colleagues, friends.

Let us begin our traditional end-of-year meeting that we call a news conference.

As always, I will spend just a few brief seconds to sum up the results of the outgoing year. A lot has been said already, but I have the latest data reflecting the most recent results, some just a couple of days old.

Before the beginning of Vladimir Putin’s annual news conference.

In the first nine months of 2018, GDP increased by 1.7 percent, while the Economic Development Ministry expects the annual increase to total 1.8 percent. Industrial output was growing at a faster pace, totalling 2.9 percent in the first ten months of 2018, with the annual results expected at 3 percent, up from a 2.1 percent growth in 2017. In addition, processing industries have been growing at a somewhat faster pace of 3.2 percent.

In the first three quarters fixed capital investment increased by 4.1 percent. Cargo shipments and retail trade are on the rise, having increased by 2.6 percent. Consumer demand growth has been apparent. This is a positive factor. After a lengthy interval, the population’s real income has shown some, albeit very moderate, growth. According to the latest statistics, real incomes will increase by 0.5 percent. I hope that this momentum will be maintained, since real pay levels are on the rise, having grown by 7.4 percent in the first nine months, which is expected to give us 6.9 or 7 percent by the end of the year.

Inflation remains at an acceptable level, although it has increased a little in the past week, by 0.5 percent, I think. Therefore, we will be able to reach the Central Bank’s reference rate of 4 percent and will have an inflation rate of 4.1 percent to 4.2 percent – somewhere just over 4 percent.

The unemployment rate is going down, which is good news. If last year it hit a historical low of 5.2 percent, this year it will be even lower – 4.8 percent.

The trade balance surplus is growing. In 2017, if you remember, it was around $115 billion. Over the three quarters of this year we already achieved $157 million. As of the end of the year, we expect it to reach $190 billion.

Our finances are growing stronger. Our gold and foreign currency reserves have grown by over 7 percent. In the early 2018, they amounted to $432 billion while now they stand at almost $464 billion.

For the first time since 2011, we will have a budget surplus. We are about to reach the federal budget surplus of 2.1 percent of the GDP. The National Welfare Fund has grown by around 22 percent.

The average annual insurance component of the retirement pension stood at 13,677 rubles in 2017. By the end of this year, it will be 14,163 rubles.

Life expectancy has also increased slightly compared to 2017, from 72.7 to 72.9 years.

These are the general results that I wanted to mention in the beginning. Let’s not waste our time and proceed to your questions and my attempts to answer them.

Presidential Press Secretary Dmitry Peskov: Let us begin by giving some priority to the Kremlin pool. Its members worked with us throughout the year, following the President both in Russia and abroad.

ITAR-TASS, the state news agency.

Veronika Romanenkova: Thank you.

The year 2018 arguably went by under the sign of new national projects that you launched with the May Executive Order. They are expected to cost an enormous amount of money. However, some experts, members of the State Council, as was mentioned in Yalta only recently, have questioned the feasibility of these national projects and whether they are needed. How well thought out are the performance assessment criteria for the national projects? For example, the Accounts Chamber Chairman said that there is no way to assess their effectiveness. What can you say to counter this?

Before the beginning of Vladimir Putin’s annual news conference.

Vladimir Putin: I will have to begin by saying a few words on whether these projects are needed, since you said that some question this.

I have said it on numerous occasions, and I will repeat it today. We need a breakthrough. We need to transition to a new technological paradigm. Without it, the country has no future. This is a matter of principle, and we have to be clear on this.

How can this be done? We need to focus the available resources, find and channel them to the essential development initiatives. How can these efforts be organised? By simply distributing money, and that’s it?

First, we had to find this money. It took us the entire year 2017 to articulate the objectives and find the resources. Both the Government and the Presidential Executive Office contributed to this effort. By the way, when some call for more changes within the Cabinet, we have to understand that it was the Government’s financial and economic block that developed the national development programme to 2024. For this reason, they are the ones who must take responsibility for the plans they made. There is no way around it.

So how should this effort be organised? By simply distributing money? After all, as much as 20.8 trillion rubles are expected to go into the national projects alone, and another 6.5 trillion will be invested in a separate infrastructure development plan. Of course, the allocation of these resources has to be set forth in documents of some kind on achieving breakthroughs. You can refer to these development plans any way you wish. We call them national projects. After all, it makes it clear that there are goals that have to be achieved. If there are no objectives, you will never achieve the final outcome, no matter how you manage these investments. It is for this reason that the 12 national projects were developed alongside an infrastructure development plan. Let me remind you of the main vectors.

Healthcare, education, research and human capital come first, since without them there is no way a breakthrough can be achieved. The second vector deals with manufacturing and the economy. Of course, everything is related to the economy, including the first part. But the second part is directly linked to the economy, since it deals with the digital economy, robotics, etc. I have already mentioned infrastructure.

Why did we have this meeting in Yalta, Crimea, to discuss with our colleagues from the Government and the regions how we will proceed in these efforts? Because there are questions on how to assess performance under these projects. We need effective controls, while making sure that all efforts by the federal centre to monitor what is happening in the regions are effective. It is true that there are challenges in this regard, but we are working on them. So what is the tricky part? The tricky part is that funding mostly comes from the federal centre, and this applies to all programmes, while most of the efforts are undertaken in the regions. The regions must be ready to work constructively. Instead of simply hiking up prices in response to an increase in the available funds, they must focus on achieving concrete results that will be clearly visible. This is the first point I wanted to make.

Second, we need to understand whether they will be able to succeed. This is a real question. Some argue that this would be impossible. But this is what we hear from those who must deliver. Instead of having these thoughts they need to work on delivering on these objectives, and if they feel that they are unable to do so, they have to clear the way for those who are positive about their ability to deliver and are ready to work. To tell you the truth, I have not seen anyone who did not want to do it or said that it was impossible. These messages come from outside observers.

Without ambitious goals we will never achieve anything. For this reason, I do hope that the federal centre and the regions will be able to work together in a consolidated and positive manner. Yes, some indicators have to be adjusted. Our colleagues from the regions have submitted their proposals to this effect, and I have high hopes that the Government will take them into consideration and adjust specific indicators so that we can move forward effectively…

Before the beginning of Vladimir Putin’s annual news conference.

Pavel Zarubin: Rossiya TV channel.

I would like to expand on a topic that has already been raised. Many economics experts, including Alexei Kudrin, assert that in reality, the Russian economy has been growing just by one percent on average over the past ten years, and if so, this is essentially marking time, or stagnation. You set the goal of making a breakthrough, a leap, but for this, even if we take the lowest estimate, the growth rate should be at least four to five times higher. The Government promises to achieve the goal, but that same Government acknowledges that in the next few years, GDP growth rates will not exceed even 2 percent. In this regard, here are my questions: what does the Government rely on in its forecasts, in the planning of its work? Is a breakthrough possible at all, in this context, or will the economy continue operating like this: we make some money on oil surplus, put it aside, then spend it when there is a need for it? In general, are you satisfied with the Medvedev team?

Dmitry Peskov: Friends, I would ask you please to respect each other – ask only one question each.

Vladimir Putin: Look, economic growth has been one percent per year for a certain period of time. But, first of all, it was while Mr Kudrin was Deputy Prime Minister, so you must not blame the mirror for showing a crooked face, as they say. This is the first point.

The second is, one should not just count mechanically. I have great respect for Mr Kudrin, he is my friend and a good professional, and as a rule, I listen to his recommendations. He is a reliable specialist, a good one. But look, from 2008 to 2018, the economy grew by about 7.4 percent. In simple maths – yes, it equals one percent, a little more. However, let us not forget how the economy developed. There were higher growth rates, alternating with recessions associated with the global crisis. In 2009, after the crisis in the global economy, not in ours – Russia was not the cause of the global financial crisis of 2008–2009, it came to us from the outside – the decline was about 7.8 percent. Then little by little, we were crawling out of it for many years.

Then, in 2014–2015, another meltdown occurred – a collapse in the oil prices, our main exports. That is why I am saying we should not simply count mechanically.

However, of course, the country’s GDP, the GDP growth rate is one of the main indicators. But we will not be able to achieve the GDP growth rates necessary for this breakthrough unless the structure of the economy is changed. This is what the national projects are aimed at, and why such enormous funds will be invested, which I have already said – to change the structure and build an innovation-based economy. The Government is counting on this, because if this happens, and we should all work towards this, then the growth rates will increase and there will be other opportunities for development.

By the way, you mentioned the projected 2 percent growth for the next two years. Yes, in the next years, 2019–2020, two percent each, but from 2021, the Government is already planning 3 percent, and then more. Therefore, I strongly hope that we will manage to do all this. Some fluctuations are probably possible, but, I repeat, the most important thing is that we need… Do you see what we need to do? We need to join another league of economies, and not only in terms of volumes. I think that taking the fifth place in terms of volume is quite possible. We used to rank fifth in terms of the economy, in purchasing power parity, and we will do it again, I think. However, we need to ascend to another league in terms of the quality of the economy. This is what our national projects are aimed at.

Pavel Zarubin: Are you satisfied with the Medvedev team?

Vladimir Putin: Overall, yes.

Question: Good afternoon.

Mr President, in my city of Volgograd we had a wonderful year. We celebrated the 75th anniversary of the Battle of Stalingrad. You made it a federal holiday and we really appreciate it. You also paid us a visit.

Vladimir Putin’s annual news conference.

We successfully hosted the World Cup and our region indeed began to breathe and develop.

There is a lot that still needs to be done. I think the economy will be extensively discussed. But Volgograd residents have a big wish and a great favour to ask. In 1998, the Kacha Higher Military Aviation School of Pilots, which had a very long history, was shut down.

It was established at the Tsar’s decree in 1910 and we were truly proud of it and want to be proud of it further. We want the military traditions to live on. Please consider re-opening it.

Vladimir Putin: In which year was it shut down?

Remark: In 1998, unfortunately. It had the Order of the Red Banner and a long history.

Vladimir Putin: You see, it is already 2018. It happened 20 years ago and I do not quite know what is left of this legendary school.

You are right, it was indeed a legendary school. But the Russian Defence Ministry plans personnel training resources based on whether there is a demand for specific types of personnel in the Armed Forces.

Therefore, we need to look at what can be done not only to remember it but perhaps to preserve the remaining traditions. I will make sure to look into this and consult with the Defence Ministry.

Maria Balyuk: Mr President, good afternoon. My name is Maria Balyuk, I represent the Prime news agency.

Mr President, the budget in the current year and the next year will have a surplus. However, starting January 1, a number of decisions are coming into effect that may cause a significant increase in prices of a wide range of goods and services.

For example, the VAT will increase to 20 percent, which has already triggered a two-stage increase in the housing and utilities rates next year. There is also the new tax for self-employed persons in pilot regions. Please tell us how these measures agree with the state’s economic policy.

Vladimir Putin: Housing and utilities rates in two stages, and what else?

Maria Balyuk: And, for example, a tax on self-employed people in pilot regions.

Isn’t this amount of new measures too much of a burden on Russians and the economy?

Vladimir Putin: You said about the surplus.

Yes, this is indeed a good indicator of the Government’s economic block performance. As I said in my opening remarks, for the first time since 2011 we will have a budget surplus of 2.1 percent. And this is good.

Let us not forget that as an oil producing country and a country that derives much of its revenue from selling oil and gas, we also have what is called a non-oil-and-gas deficit. This is what the country earns from selling products and services other than oil and gas.

Let me remind you that this non-oil-and-gas deficit was 13 percent in 2009, which is a lot. In the early 2000s, it was at about 3 percent, but the global economic crisis forced us to use our oil revenues to meet our social commitments and finance the Armed Forces, so we had to tap into the oil revenues.

Vladimir Putin’s annual news conference before the beginning of Vladimir Putin’s annual news conference.

In this situation, the non-oil-and-gas deficit surged into the double digits almost reaching13 percent, I believe. This was a very serious challenge for the Russian economy. We have now reduced it to 6.6 percent, and next year it is expected to decline to 6 percent and remain at this level for the next few years.

This is a very important indicator of economic resilience for the Russian Federation. Therefore, the increase in the VAT rate, among other things, is due to the need to maintain the non-oil-and-gas deficit at a certain level.

Second, in many countries VAT is 20 percent or even higher. It used to be higher in Russia as well, but we reduced it at a certain point. Now we have returned to a 20-percent tax rate.

However, the effective VAT rate for the overall economy will be below 20 percent since almost all benefits remain in place: for pharmaceuticals, children’s goods, and so on, including for IT companies. Many benefits have been preserved. With this in mind, the effective rate will be actually lower.

Finally, I do hope that the rate hike will be only a one-off measure with a possible slight increase in prices and inflation in the beginning of the year, after which the inflation will go down.

The Central Bank also seeks to prevent inflation from picking up. Only recently, the interest rate was increased by 0.25 percentage points.

While there are definitely both benefits and disadvantages to this decision, all this is done in order to prevent inflation and prices from growing. For this reason, I believe that the overall decision was correct and balanced, creating additional budget revenue and the possibility to deliver on our development plans as part of the national projects.

As for increases in housing and utilities tariffs, over the past years they grew by about 4 percent per year. It is true that next year there will be two hikes: the first one will be at about 1.7 percent, and the second one I think will be about 2.4 percent, but in total this still makes up 4.1 percent.

Why will the increase be spread out in two stages? The reason is that with a higher VAT, prices of some goods and services are expected to increase, and we need to make sure that the utilities sector does not come under stress.

For this reason, in order to shield companies in this sector from these developments and ultimately in the interests of the people, we decided to proceed in two stages. That said, the overall increase should not exceed 4.1 percent.

In some regions, where the utilities infrastructure requires major upgrades and bigger hikes are required, this can be done as an exception, and subject to federal Government approval.

Yekaterina Gagarina: Good afternoon, Mr President. My name is Yekaterina Gagarina. I represent the Rossiya TV channel in Novosibirsk.

The importance of the Akademgorodok 2.0 [Academic Town] project that you supported during your visit to Novosibirsk is obvious not only to Siberian scientists. This project is unique for the entire country.

But behind the technological component of this project there are a number of tasks of a similarly large scale. They include building housing, roads, kindergartens and schools. My question is what if our scientific ambitions crash at daily living problems? Will the scientists have somewhere to live?

Vladimir Putin: I would not want them to crash.

I understand that it is a very important part of the entire process. Of course, we will be working on this with the regional officials. When I visited Novosibirsk, I also spoke about this with my colleagues.

The first objective of the federal government is to honour its obligations related to the facilities which trigger the development of Akademgorodok – which, by the way, is the opportunity to earn money on these high technologies. The social component will definitely be carried out after this.

But if any additional action is required to resolve the scientists’ social issues, of course, we will try to do it. By the way, the mortgage sector has been growing lately. We will support it as well. It is growing very fast for everybody. The growth of the mortgage sector stands at over 20 per cent.

Vladimir Putin’s annual news conference before the beginning of Vladimir Putin’s annual news conference.

Full transcript 


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