Vladimir Putin took part in the plenary session of the 24th St Petersburg International Economic Forum.
This year’s forum, with the theme A Collective Reckoning of the New Global Economic Reality, is one of the biggest events since the start of the pandemic. Heads of state and government, heads of major Russian and international associations, companies and banks, leading experts and politicians are taking part in discussions at the SPIEF in person or via videoconference.
Federal Chancellor of the Republic of Austria Sebastian Kurz and Emir of the State of Qatar Tamim bin Hamad Al Thani attended the plenary session via videoconference. President of Argentina Alberto Fernandez and President of Brazil Jair Bolsonaro sent video messages to the participants.
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Stanislav Natanzon, plenary session moderator: Good afternoon, ladies and gentlemen.
I am happy to welcome you all at the St Petersburg International Economic Forum.
This is the first global event of this level that people are attending in person, or at least it is a ‘hybrid’ event, to use the new buzzword. In any case, it is good to see you again. I think we have quite a backlog of topics for discussion, and I really hope the conversation today will be vibrant, frank and intense.
By tradition, we will first give the floor to the leaders and then we will have a discussion.
Mr President, please, you are the first to have the floor.
President of Russia Vladimir Putin: Your Highness Emir Tamim, Mr Federal Chancellor Kurz, ladies and gentlemen, friends,
I welcome all the participants and guests of the 24th St Petersburg International Economic Forum.
As you know, since the beginning of last year, most meetings at many traditional venues have been cancelled or were attended remotely because of the pandemic. We are happy that after this long break, Russia is hosting the first major international business event and providing a platform for representatives of the global business community to communicate with each other, not only using modern telecommunications, but directly. At the same time, we have certainly done our best to ensure the participants’ safety and adopted the most stringent sanitary protocols.
I repeat, the very fact that this massive forum is being held is certainly a positive sign. This once again shows that partner-like ties and contacts between entrepreneurs, investors and experts are gradually becoming customary and normal once again.
We are also witnessing the same positive global economic trends. Despite the all-out 2020 slump that, according to experts, was the greatest since World War II, one can already safely say that the global economy is returning to normal. The global GDP is expected to post unusually high growth rates this year, the biggest rise since the 1970s. As you know, experts are talking about six percent growth.
This, of course, was an effect of the large-scale and extraordinary decisions made by economic authorities worldwide. By the way, practice showed that traditional monetary policy measures would not be enough to overcome the current crisis. The budgetary policy that was actively supported by central banks in developing countries for the first time has played a key role in the rapid economic recovery.
We should understand that leading economies have many resources and tools for stimulating business activity. The statistics speak for themselves: In 2020, industrial countries’ budget deficits increased by an average of ten percent of their GDPs, while in developing countries, the growth was about five percent. And we know that these budget deficits largely finance anti-crisis measures. Of course, it is good that such solutions are available, and this is, certainly, a positive aspect. Unfortunately, there are also some negative sides to this.
As a result, we can see that global economic recovery is proceeding unevenly, given the different capabilities of different countries. This is fraught with greater disproportions and wider gaps in living standards both within certain countries and between them. And this breeds serious political, economic and social risks for the development of the modern interdependent world and for our common security. I have already spoken about this at the World Economic Forum in Davos this past January.
A case in point is our efforts to fight the pandemic. Unless we ensure broad, universal access to coronavirus vaccines on all continents, the threat of the pandemic, its new outbreaks will remain with us. Pockets of infection will survive, posing a threat to the entire planet.
What do we see now? According to the IMF, countries with a high level of income and 16 percent of the world’s population have access to 50 percent of the vaccines produced. As the result, only 10 percent of the world’s population have been fully vaccinated or received the first jab, whereas hundreds of millions of people have no access to vaccines simply because their countries do not have the required technology, production facilities or money to buy the vaccines. And the assistance being provided to these countries by those who can afford to do it has been negligibly small so far.
Regrettably, as the saying goes, it is every man for himself in the fight against the coronavirus on the global scale. The necessary volume of assistance is not being provided where it is badly needed now, or, which is absolutely absurd, politically motivated bans are imposed on the purchase of tested and effective vaccines that have been proved to be completely reliable. In the current situation this looks like unwillingness to protect one’s own citizens from this threat. This is indeed taking place; we have seen this happen.
As you know, Russia is contributing to the efforts against the coronavirus. We have created four vaccines, and these achievements of our scientists have been recognised throughout the world. For example, Sputnik V has been registered in 66 countries with a combined population of over 3.2 billion.
I would like to point out specifically that we have not only created unique technologies and promptly launched vaccine production in Russia, but we are also helping our foreign partners localise their manufacturing as well. So far, Russia is the only country doing this.
As I have already mentioned, today every adult in Russia can receive a vaccine in maximally comfortable conditions, voluntarily and free of charge. I would like to use this occasion to once again urge our citizens to make use of this opportunity to protect themselves and their loved ones. As I have said, the Russian vaccine has been declared the safest and most effective vaccine in the world, with an efficacy of over 96 percent. According to our regulatory bodies, not a single death has been reported among those who received the vaccine. I have already said this, and I can judge from my own experience: you can get a small fever, and this is the only side effect, while the protection is very strong.
In addition, I would like to ask the Government, regions and business to work jointly on the vaccination of people who come to Russia as migrant labourers. Many of them work in our construction industry, in trade and services, as well as in housing and utilities.
The domestic pharmaceutical industry is ready to continue increasing the production of vaccines. We fully meet our own requirements and can give foreigners an opportunity to come to Russia for vaccination. Given the efficiency of our vaccines, I know that the demand for them is high. Moreover, it is now common practice for people from various countries, including entrepreneurs, heads of large European and other companies, to make special trips to Russia to be vaccinated against the coronavirus.
In this context, I would like to ask the Government to analyse all aspects of this issue before the end of this month so as to organise paid vaccination for foreigners in this country, taking into account, of course, security requirements and sanitary control.
Obviously now, at the stage of post-crisis recovery it is important not only to ensure sustainable growth but also to benefit from the emerging opportunities and effectively develop competitive advantages as well as the scientific and technological potential. In the process, it is very important to preserve and strengthen business and investment ties between countries.
Multilateral projects are primarily capable of reviving and developing the global economy and we are grateful to our partners for the cooperation that is continuing during the epidemic and despite the difficult situation in international relations.
Incidentally, I would like to tell you in this connection that the laying of the first line of the Nord Stream 2 gas pipeline was completed today, two and a half hours ago. The work on its second line continues.
In fact, the line pipe, including the offshore section, has been laid. The pipe in Germany is in place. Now parts of the pipe must be lifted and welded on the Russian side. That is all. Anyway, pipe laying is over.
The readiness of the Russian line of the gas route to the Slavyanskaya compressor station was also ensured this week. Why am I talking about this? Because this station is one of the most powerful compressor facilities in the world and is a point of departure for the new gas pipeline. Slavyanskaya has been supplied with gas.
To sum up, Gazprom is ready to fill Nord Stream 2 with gas. This route will create direct links between the Russian and German systems and will ensure energy security and reliable gas supplies for the Europeans, like Nord Stream 1. I must add that this project is profitable economically and fully conforms to the most stringent environmental and technical requirements.
We are ready to implement similar high-tech projects with our European and other partners in the future, and we hope that the logic of mutual benefit and mutual profit will inevitably prevail over all sorts of artificial barriers in the current political environment.
Now allow me to say a few words about some of the priorities on our domestic business agenda.
Thanks to the prompt and timely measures taken, the Russian economy and labour market are already approaching their pre-crisis levels. We have managed to save millions of jobs and avoid a sharp drop in people’s incomes. True, we have encountered problems. Unemployment increased and real incomes declined; we all know this. But none of that was anywhere near the disaster that could have happened, given the circumstances. That, at least, we have managed to avoid.
We have prevented a sharp drop in incomes, as I said. Our decisions to support businesses, workers, and regions have worked. The targeted assistance provided to Russian families and people who lost their jobs also came highly useful.
Indeed, difficulties with employment remain. We will probably talk about this later. We also know that the pandemic is not the only reason for the challenges we are facing such as a relatively high unemployment rate among young people or strained regional labour markets. We know we cannot blame everything on the pandemic, and we understand that some of these problems have a systemic nature stemming from unresolved structural problems in our economy.
The Government should enhance its programmes to promote employment in those constituent regions where unemployment is still high. At the same time, I emphasise, we need to continue taking targeted action, and propose solutions that take into account the economic specifics in each region. Furthermore, I am instructing the government to launch a permanent nationwide programme to support employment of young people, including measures to promote youth entrepreneurship.
It is obvious that the main, systemic response to the employment problem, and the key condition for raising people’s incomes is economic growth. This is obvious, and everyone understands it. New, high-quality jobs are needed in all sectors and regions of Russia.
World history shows that the relaunch of the economy following serious shocks has always been connected to boosting investment in infrastructure, territorial development, new technologies and personnel training.
I would like to thank the Russian regions that did not take a break or find excuses amid the most difficult pandemic environment that required great concentration of resources and attention, but continued to work on improving their business climate, maintaining dialogue with businesses and attracting investors. These regions have been rightfully distinguished by the National Investment Climate Ranking. Thus, Bashkortostan, Nizhny Novgorod Region and the Khanty-Mansi Autonomous Area are listed among the ten best regions to invest in; Samara, Sakhalin and Chelyabinsk regions have shown good dynamics.
We will provide systemic assistance to the regions in improving the business environment. I would like to ask the Presidential Plenipotentiary Envoys to boost efforts in this area and the Government to focus on supporting the regions that have difficulties with raising investment. It is necessary to help them introduce the best management practices and improve the level and quality of work with investors.
This task is quite concrete: a transparent, predictable and comfortable environment must be provided for businesses, private investments and new projects in all Russian regions by 2024.
In particular, each region will need to outline priority development areas; this information will be open to businesses, as well as the region’s urban development and infrastructure plans for building utility lines, roads and communication systems, so that it would be easier for businesses to pick the best place for their new production site or other facility.
It is necessary to eliminate excessive links in the chain, various superfluous formalities and approvals, first of all, for the most sensitive areas such as connection to the grid, construction permits, and others.
We are consistently removing dated requirements at the federal level. Thus, starting September 1, almost 4,000 more building codes and regulations will no longer be mandatory. That will leave only 3,000 mandatory requirements in construction of the more than 10,000 we had previously. But there is still room for simplification.
I would like to note that this huge and painstaking work to streamline regulation took two years. Again, we will keep at this, while at the same time maintaining high requirements for the quality and reliability of construction.
I am asking the regional heads as well as the customers of major facilities at the federal and regional levels, and heads of our state-owned companies and private businesses to keep in mind that all construction permits will need to be prepared in line with the updated regulations and should take into account the rapid changes in construction technologies, and use advanced, highly sustainable building materials. All this will need to be considered.
In general, each region must offer an understandable, comprehensive algorithm for the investor to go all the way from project concept to the opening of a new industrial facility or a property as efficiently and quickly as possible, without wasting time or sustaining unnecessary costs.
I will once again stress the importance of cooperation between the Government and the regions. I would like to note that the performance of the federal ministers responsible for economic matters will also be evaluated by how quickly the situation improves in those regions where, as I said, there are still problems with the business and investment climate. Please do not pretend that this does not concern the federal government. This applies to everyone. We need a common result, and we need to work with the regions that need support.
Again, we should not have any so-called backward regions thrown on the sidelines of economic growth. Each constituent entity of the Russian Federation has investment and economic potential. We need to unlock and effectively use it in the interests of all Russians, for the good of all Russian families.
A programme of infrastructure loans that will give the regions an opportunity to attract long-term loans at a low interest rate will become a new instrument for their development. We have already spoken about this, discussed these matters and made public statements to the effect. In all, the actual investment in infrastructure under this programme must be no less than $500 billion in the next two and a half years.
I would like to ask regional governors to be very attentive to drafting projects for this type of funding. It is necessary to spend funds primarily on creating a comfortable environment for people and upgrading cities and other residential areas. This is a major factor of economic growth and investment appeal in the modern world, in the economy that surrounds people.
Based on the best international standards and the experience of rating the investment climate, the Agency for Strategic Initiatives drafted, in cooperation with experts and commissions of the State Council, a national rating of living standards in the regions of Russia. It is an important indicator and I would like to tell you about our first results in this respect.
Moscow, Tyumen Region, Tatarstan, the Khanty-Mansi Autonomous Area and St Petersburg are in the lead for obvious reasons. They are our traditional business centres. They have long invested serious funds in infrastructure for people. Importantly, more and more Russian regions are guided by high standards and are demonstrating good dynamics in many areas. Thus, the Republic of Mordovia has one of the best education systems; Udmurtia has very comfortable conditions for launching and running businesses, while Novgorod Region leads in social protection.
I would also like to mention such an interesting integral rating indicator as the commitment of people to their region, a desire to live and work there and link the future of their children with it. Sevastopol and Kaliningrad Region are at the top in this respect.
I would like to emphasise that the rating of the quality of life in the regions makes it possible to assess the situation objectively, to see which regions have the most experience and the best practices. Moreover, this rating is primarily based on the opinion of residents themselves. This feedback allows regional managerial teams to plan work better and to focus efforts on the most sensitive problems, such as, of course, more affordable housing.
I am aware that here, at the forum panels, and in the country in general, the issue is being discussed about what will happen next with reduced-APR mortgage lending, which, as you may recall, is now available at an APR of 6.5 percent. Indeed, this programme has become one of the key anti-crisis measures to support individuals and the economy. To date, over half a million households have applied for and received this loan. An additional 2 trillion rubles, approximately, have been attracted to housing construction.
As you may know, the programme will expire very soon, on July 1. To reiterate, this was an anti-crisis programme, meaning that it was temporary.
At the same time, abruptly terminating it is, of course, not an option. We must keep in mind the important role that easy-term mortgage lending is playing in the current circumstances for resolving our people’s housing problems and developing the construction industry, which, as we are aware, is the driving force behind related industries. Therefore, I propose extending this programme in all regions for another year, that is, until July 1, 2022. We will raise the rate slightly in doing so. Some changes will be made, including setting the easy-term mortgage rate at 7 percent APR. The maximum loan amount will be set at 3 million rubles and it will be applied throughout the country.
At the same time, I would like to let you know about a new decision designed to make mortgage loans more affordable for families with children. Here is what it is about. As you may be aware, a systemic special mortgage programme for families that had a second and subsequent child after January 1, 2018, is already in place. I propose expanding this to all families with children born after January 1, 2018, even if there is only one child in the family so far. That is, to reiterate, with the birth of their first child, a family will be able to take out a mortgage loan at a rate of 6 percent and buy housing on the primary market or refinance an existing mortgage loan. The maximum amount of such a loan for Moscow and St Petersburg, as well as the Moscow and Leningrad regions, where real estate prices are objectively higher, will be 12 million rubles, with 6 million rubles available in the other constituent entities of the Federation.
We hope that a better quality of life and improved infrastructure in Russian regions will make them more attractive for promising projects, for more private investment, and will open up additional opportunities for large companies as well as small and medium-sized businesses, serving as an important support for the economy, and in many ways contributing to a modern, competitive business environment. Competition is the main driver of growth and, importantly, a market mechanism that keeps prices down.
Last year, we made a fundamental, systemic decision to support small and medium-sized businesses. We halved insurance premiums for small businesses from 30 to 15 percent. We will certainly not go back on this. Moreover, we are ready to take further steps to support entrepreneurship. I will mention some of them now.
Firstly, I propose launching a new mechanism to support SME lending as soon as this year — something we call umbrella guarantees.
Here is how it works. Our development institution, the SME Corporation, will issue guarantees for loans from partner banks. In fact, it will take on some of the risks and make loans more affordable for SMEs. According to estimates, this will allow entrepreneurs to attract additional resources for development, at least 600 billion rubles by 2024.
Secondly, I know that businesses, especially small ones, sometimes complain about the high bank charges on their trade and other operations.
We have already extended the faster payment system, which enables transactions with lower charges, for non-cash payments between individuals and entrepreneurs. However, so far, this system has not been as widely used by businesses as it could be.
As a reminder, by September 1, all the so-called systemically important, backbone banks in Russia must connect to the fast payments system. I also think it would be right if the largest of them do this in the very near future, by July 1.
In addition, I have one more proposal that I think will be a pleasant surprise for those who are involved in this type of business, small and medium companies. I am suggesting that they be fully reimbursed until the end of the year for the commission they pay for using the Fast Payments System (FPS) when they sell their services or goods to individuals, to people. I repeat: the cost of FPS will be zero for these companies.
I discussed this issue with my colleagues and the Governor of the Central Bank. It will be necessary to support financial institutions through the budget and avoid discouraging them.
My third point: companies that are now using the simplified taxation plan must transfer to the general tax schedule if they go beyond the employee limit or the revenue limit. Of course, in this case a business will have to shoulder an additional fiscal burden, and this can impede growth and compel entrepreneurs to use tricks, like the artificial division of a big company into small ones.
The restaurant business is a case in point in this respect. I suggest these companies participate in the pilot programme at the start of next year to work out the process for a more comfortable transition from the one tax schedule to the other.
With respect to some details, the companies in this programme will pay no VAT if their revenue is below 2 billion rubles a year. Importantly, they will retain the right to pay a reduced insurance premium rate of 15 percent even if their personnel count grows to 1,500 people. Currently the threshold is 250 people.
Colleagues, let us see what effect this has on keeping businesses legal and encouraging companies to grow. As for making businesses legal, I think all interested people understand what I am talking about: all cheques must go through the cash register; employment must be official and purchases must be legal as well, that is, recorded in the cash register. (Applause).
Thank you. I suppose we speak the same language. For my part, I will do all I can to see that the state meets its commitments.
I will add that we have already agreed to relieve of filing a tax declaration those entrepreneurs that are working under the simplified tax scheme and using cash registers. I would like to draw the attention of my colleagues in the Government and Parliament to the relevant draft law that was adopted in the first reading last year: it has stalled since then. Please finalise this as soon as possible.
Fourthly, small and medium-sized businesses must be relieved of antimonopoly oversight that is clearly excessive. Many existing threshold numbers have not been revised for a long time now and do not match today’s economic realities, since the economy and the companies keep growing.
For example, antitrust oversight covers all companies with annual revenue of over 400 million rubles. I propose doubling this amount to 800 million rubles, thus sparing a large number of growing companies burdensome and unnecessary reporting and paperwork. I propose setting a similarly higher threshold for oversight of mergers and acquisitions. That is, if a deal does not exceed 800 million rubles, it will not require the approval of antimonopoly authorities.
And, finally, my fifth point: measures to drive demand for the output of entrepreneurs across all sectors of the economy are especially relevant now. In this regard, I propose increasing the share of goods and services that our large companies, as well as state and municipal customers, must purchase from small and medium-sized enterprises, including non-profit organisations. It should be at least 25 percent.
We have held numerous discussions on this matter. I want to draw your attention right away to the fact that we are talking about companies that operate under Federal Law 223 and the companies that work with state and municipal authorities under Law 44. I am aware there are many subtleties here. And I know well that Russian industry does not even make certain products. However, the bar must be set where I said, and the Government will finalise the finer points.
In addition, it is imperative to cut the time it takes to pay for delivered goods and services from 30 to 15 business days, which is also important. Small businesses and socially oriented NGOs must see this time go from 15 to seven days.
Of course, real companies, not all sorts of sham or affiliated operations, should benefit from these preferences. I want the oversight authorities to keep this in mind. At the same time, I am instructing the Government to make sure that procurement for state needs involves mainly Russian manufacturers, of course, in compliance with internal competition rules, in this case.
Ladies and gentlemen,
As I have said earlier, international cooperation must be instrumental in overcoming the socioeconomic consequences of the pandemic. It is all the more important for us to pool our efforts in the face of common, systemic, long-term challenges that do not depend on the situation in the market or political disputes and setups, but determine the future of entire societies in a decisive way.
What am I talking about now? What am I referring to? Primarily, the climate agenda. Scientists estimate that over 2 trillion tonnes of greenhouse gases have accumulated in the Earth’s atmosphere because of human economic activity. Every year, the volume goes up by 50 billion tonnes, gradually warming up the planet.
I often hear that Russia is not that interested in resolving global environmental problems. I can say that this is nonsense, a myth, and sometimes outright distortion. Like other countries, we feel the risks and threats in this area, including desertification, soil erosion and melting permafrost. Many of those here work in the Arctic and know that we have entire cities built on permafrost in the Arctic. If it all starts to thaw, what consequences will Russia face? Of course, we are concerned.
We are consistent supporters of the UN Framework Convention on Climate Change, the Kyoto Protocol, and the Paris Agreement. I must emphasise that there is no separate Russian, European, Asian, or American climate. All our countries bear a common responsibility for today’s world and for the lives of future generations. We must set aside political and other differences and avoid turning the transition to «hydrocarbon neutrality» into an instrument of dishonest competition where attempts are made to change investment and trade flows in someone’s specific interests under the pretext of the hydrocarbon footprint, and where limited access to advanced ‘green’ technology becomes a factor in deterring individual countries and manufacturers.
How do we see Russia’s contribution to countering climate change? I am sure environmental and climate projects in our country will play a leading role in global efforts in climate conservation by virtue of Russia’s size, place and role in the world. We have set a goal: in the next 30 years the accumulated amount of pure greenhouse emissions must be lower in Russia than in Europe. This is an ambitious goal, but I am confident that it is feasible. I would like to ask the Government to draft a detailed plan of action on this before October 1 of this year. We will discuss this issue at a separate meeting.
What are our areas of focus?
The first one includes projects designed to reduce emissions throughout the economy. I have already mentioned that the Russian energy sector is increasing its share of low-carbon sources primarily through building nuclear and hydroelectric power plants and using renewable sources of energy. We have the world’s largest gas reserves, and while gas — we will probably discuss this later — is, of course, carbon, it is the purest kind of carbon, and we will be unable to do without it during the transition period.
Incidentally, using its nuclear industry as the foundation, Russia is already creating infrastructure for the production of hydrogen to be used as a raw material, fuel and energy source in metallurgy, the production of cement, and transport, among other areas.
We will also keep reducing emissions from hydrocarbon production and utilising associated gas. By the way, we probably utilise more gas this way than any other oil-producing country. We will thoroughly modernise the thermal power industry and electrify gas transport infrastructure. We also plan to further improve energy efficiency in the residential sector and heat supply systems, to switch public transport to natural gas, electric and hybrid engines, and to reduce material consumption in construction. In a word, we are talking about end-to-end technological retrofitting of our entire economy and infrastructure.
Clearly, such projects need market incentives in order to be launched successfully. To this end, we are starting to issue state-subsidised ‘green bonds.’ Also, we have developed performance criteria for environmental projects or a ‘green taxonomy’ in the parlance of experts.
Of course, reducing emissions is not enough to overcome the challenge of global warming. Greenhouse gas sequestration is essential if we want to achieve carbon neutrality. It is important to reduce existing levels of greenhouse gases in the atmosphere, and our main goal is to learn to capture, store, and make productive use of carbon dioxide coming from all sources.
Now, regarding a second area in this context: an entire industry, a fundamentally new market for so-called ‘carbon units’ is being created almost before our eyes. Many people, especially those in power production, are aware of this, but I will explain. This is the amount of harmful airborne emissions that can be absorbed by a section of land or forest. So, if you have done some additional work on your land to increase its ability to absorb the emissions in the air, you have created a number of carbon units. Many countries and associations are already planning to accept these units from exporters to offset the emissions from the production of imported goods.
Russia has enormous potential for emission absorption with its forests, tundra, agricultural lands and marshlands. Our country has a fifth of the world’s forests; they occupy almost 10 million square kilometres. Specialists and scientists believe that they are already absorbing billions of tonnes of carbon dioxide equivalents every year.
I repeat, the importance of Russia’s potential in natural compensation is enormous, simply huge in terms of the planet’s climate sustainability. Clearly, by virtue of its natural advantages, Russia can maintain a special place in the global market for carbon units. To achieve this, we need to use the forests and lands more effectively and enhance their absorption capacity. We must increase reforestation areas, fight wildfires, and expand pristine nature reserves, sanctuaries and national parks. In effect, we are now doing all this and intend to continue to do this in the future while introducing new soil-recovery agro-technology.
Importantly, we can work towards three objectives at the same time. Firstly, by investing in technology, the protection of forestry and land improvement, we will enhance the environmental wellbeing of our people, and the cities and territories they live in. Secondly, we will create jobs in the new high-tech industry of greenhouse emissions mitigation, and third,ly we will provide our exporters with an additional dimension for competitiveness in foreign markets.
This concerns many of you here in this hall. I would like you to see this as a direct message to Russian companies that are buying or starting to buy carbon units abroad or are planning to do this in the future. Instead, it is better to invest funds in climate projects in our country. Eventually, those who engage in this will receive many benefits, economic benefits. This effort will be more effective and oriented towards the future.
I would like to note that, based on our estimates, revenue from this new climate industry in the Russian market could soon surpass $50 billion a year, which is another important figure. In a word, this is a good, beneficial destination for investment by both domestic and foreign companies. We invite our interested partners to take part in this work. We will create the necessary conditions for this.
I would like to discuss several issues that are of critical importance for climate projects in Russia. It is necessary to work through in detail the criteria underlying these projects, to determine the sites and areas that are best suited for launching them, and the kind of technologies to use.
It is also imperative to create a transparent and objective system for assessing the outcome of climate projects. This is a critical part of what I am saying now — that is, to identify the current absorbing capacity of the sites and what it will be after the project is implemented. Actually, it is about calculating the delta in the form of the «carbon units» that I just mentioned.
All the while, it is important to monitor the emission and absorption of greenhouse gases based, among other things, on observations from outer space, digital technologies, and AI methods.
The construction of such a national system that makes use of the potential of Russian science is already underway in Russia. We are creating a network of «carbon testing grounds» to monitor carbon dioxide emission and absorption in real time, as well as the state of environmental systems, the quality of water resources and other variables.
We are also creating a pilot carbon market in Sakhalin Region. This experiment will come as a step towards achieving carbon neutrality and creating a nationwide carbon unit market.
I am aware that a system of this kind is about to be launched in other countries as well. Here is another important matter, which concerns mutual recognition of greenhouse gas emission and sequestration. This requires a transparent climate statistics system, mutual understanding between states and, of course, joint scientific research. We are open to this cooperation.
I am instructing the Government, by July 2022, to fully form the regulatory framework for implementing climate projects in Russia at the level of federal laws and departmental bylaws and guidelines, so that businesses, domestic and international alike, can draw up and implement their plans in this area relying on clear and easy-to-follow rules and criteria.
Colleagues, let me close by saying again that, despite the challenges presented by the global pandemic, life is gradually returning to normal. To reiterate, our meeting in St Petersburg is a case in point. Next week, St Petersburg will be hosting matches of the 2021 UEFA European championship which is getting underway.
On this note, I would like to convey my greetings to our great friend, the Emir of Qatar. It was his birthday yesterday. Our best wishes to you, Your Highness. I am confident that Qatar will host the FIFA World Cup 2022 with great success.
Such major events and forums truly unite and bring people from different countries closer. Businesspeople, of which there are many here, are well aware that in-person contacts based on mutual trust move forward, in many respects, business projects and initiatives, and, therefore, the global economy.
Russia will do its best to create every opportunity for these contacts to take place, for sharing experience and demonstrating the latest achievements in science and technology.
Thank you for your patience and your time, and I wish the forum every success.
Thank you very much.