The following is the transcript of a CNBC Exclusive interview with Vladimir Putin, President of Russia, conducted on occasion of the Russian Energy Week International Forum 2021, 13 October 2021.
Should you choose to use anything, all references must be attributed to CNBC and Hadley Gamble.
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Hadley Gamble (HG): Thank you for having us at Russian Energy Week. I want to ask you about succession plans, every good CEO has one. Do you really want to be President when you are 84 years old?
Vladimir Putin (VP): I prefer not to answer such questions, this is my traditional response. We will wait until the upcoming elections for that. The conversation in this regard is to stabilize the situation. The situation must be stable and safe in order for power structures and world structures to work safely and responsibly. The situation allows me to run for another 6 years but I haven't taken a decision in this regard.
HG: I want to ask you about the situation in the Middle East: You have mentioned several times your relationship with Saudi Arabia via OPEC+, how do you see the region today? Are you worried about the departure of the United States?
VP: I think that the Middle East is a promising region of the world. I always see the liberation of the UAE and Saudi Arabia make energetic steps to diversify their economies. (incomprehensible) of these countries to think about the future. I'm confident they will achieve results because they are goal-oriented.
Concerning our efforts to stabilize the world energy market, the interaction is tough, we protect our positions, but so far we have managed to reach mutually acceptable solutions. And our partners they (incomprehensible) in their production our partners they may seem strange but they also invest in green energy. We're discussing massive investments in new technology and new sources of energy. I think this is a very promising area of our coverage in the future.
HG: Mr Novak a few months ago suggested that we are going to see oil contracts denominated in something other than US dollars. Possibly in crypto, when do you think we will see that happen?
VP: It's early to say so. Cryptocurrency may be a unit of contact. But it's (incomprehensible). To transfer money to some other place maybe, but it's too early to talk about the trade of anything in sources of crypto. Cryptocurrencies are not supported by anything, yet. It may exist as a means of payment. But I think it's too early to say about the oil trade in cryptocurrency and the trade in other primary energy sources. Everything develops and has the right to exist - it may have the right to accumulate, we'll see. But it's too early to talk about it today.
HG: Does that mean though in your views with regards to crypto, people like Elon Musk, the value of what they hold is worthless?
VP: I believe that it has high value but it cannot be used in oil trade. But in order to make cryptocurrency it demands tonnes of energy. And so far we must use traditional hydrocarbons.
HG: I know that your central bank governor - in our conversation this summer she essentially said to me you are moving away from dollar-denominated assets when it comes to trying to diversify away from the US dollar. Is that so sanctions have less of a bite to the Russian economy?
VP: I believe the US makes a huge mistake in using dollar as the sanction instrument. And it does so because it impedes US transfers in US currency, or sanctions in production. So we can't acquire money in dollars and what does it lead to? We are forced - we have no other choice but to move to transactions in other currencies. This is the first thing I wanted to say.
And second: other countries who have their reserve currencies or use dollars as a means of payment are also concerned by the situation. The dollar may be used against them. And so they do the same: they diminish the role of the dollar in the reserves and they move away from using it as a means of payment. This is the result. As a result even close partners and allies of the US move away from dollars as a means of payment. This is a fact.
And we also do the same. We diminish the role of the dollar in our reserves and means of payment and we try - we're not always successful - but we try to move to making transactions in national currencies. In this regard we can say that the US bites the hand that feeds it. This dollar is a competitive advantage - it is a universal reserve currency and the United States today uses it to pursue political situation and pursue political goals, and they harm their economic and strategic interests as a result.
HG: Do you see the US dollar devolving into a currency that isn't the world's reserve currency? Do you think that can happen?
VP: It undermines its position as a world reserve currency. Both transactions and reserves in US dollars shrink. But we are not interested in moving completely away from transactions in dollars. And we are satisfied as of yet to pay in dollars for energy sources for oil first and foremost.
But if political policy of US continues then we have no choice and we will do nothing but the US will undermine the situation. The US national debt is growing. And once again the US Congress raised the limit for the national debt. It means issues. What does issues mean? A growth of inflation. And today the US faces record high inflation growth. So these are economic reasons that undermine trust towards the dollar.
Everyone has a question: "what's next"? What will they do with this colossal debt? Will they manipulate somehow the dollar? Will it diminish the value of the dollar? What will they do with the debt? These are fundamental questions – it has nothing to do with us. It's about the Federal Reserve system and the policy of the US administration. The United States is the largest economy in the world - a very high-tech one. And the whole world economy depends on the health of the US economy. And we are interested in seeing no such shocks. But it doesn't depend on us. And we closely follow the situation and analyze it to make necessary steps to ensure our long-term interest.
HG: A question for you on China. President Xi says you're his best friend. Does it concern you what you're seeing from the United States with regards to the AUKUS agreement? Do you think that that's heightening tension with China creating the potential for a new Cold War?
VP: I also believe that the Chinese president is my friend and we have been working a lot with him. We achieve good results. Both political cooperation and in economy. I believe it benefits both Russian and Chinese populations. And it's a great balance in international relations.
On the creation of closed blocks, as you've mentioned, the AUKUS block. It, of course, undermines regional stability. Because it's good to be friends, but it's bad to be friends against someone. It undermines stability that we'll talk about, and we all care about that. And the situation is what we see. But I hope that it will not develop in an unprecedented way and will not create additional problems in the region.
HG: Before I let you go: In terms of your greatest concern, you mentioned inflation, we now have the prospect of stagflation. We talked about AUKUS, we talked about tension in the South China Sea. What's happened in Afghanistan? Now we have a gas crisis, a cornucopia of issues facing the world. What is your greatest concern today?
VP: Our main problem, our main issue and goal is to increase the revenues of our citizens. This is our main challenge. And we're not going to use simple linear methods to solve it in order to do so. We need to ensure economic growth and to increase its quality. These are our long-term tasks. We're not going to use populist means to do so.
On the basis of economic growth, we're going to improve the social situation to increase the revenues of our citizens and to deal with the second very important task - the demographic situation. And it entails a lot of social issues, healthcare, education, supporting families with children. In order to improve the situation we set out the national development goals.
This is a big problem. So these two very important issues - demographic one and increasing the revenue of our citizens, improving their quality of life - this should be solved on the basis of economic growth. That's what we are going to do in the near future.
HG: What about Mr. Navalny? Are you interested in improving his quality of life?
VP: The citizen that you've mentioned is now in prison—
HG: Not great quality of life.
VP: Not the best you're right but he's not alone. There are other people who also violated Russian legislations, and we are not going to create any exclusive conditions for those who use the political activity as a cover up for their activities. So I think that I've answered your question.
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