Chief editor of Business FM Ilya kopelevich talked to the President — Chairman of VTB Andrey Kostin during SPIEF-2019.

A few words about plenary panel. With great respect to the leaders of other States, it is still politically Russian-Chinese, and it is symbolic on the background of a fairly acute stage of the American-Chinese are very serious contradictions which are experienced by the whole world economy. What is your forecast, what are the estimates of the tone in which it answered questions on this topic, the President of China, XI Jinping? Andrey Kostin: It is different, I think, from past years, at least, the last, because a significant portion was devoted to the assessment of the current global economic system. Even, I would say, the rule of law or rules that have been established, or, as Putin said, the lack of rules in this area. It is certainly not as ambitious as his famous speech in Munich, however, the President is not without reason referred to it — many things in common, especially the point that today the situation has changed, those rules that existed in world trade, the global economic system established after the Second world war and at that time the interests of the largest States in the West, the United States has changed. Therefore, they have evolved on the basis, as stated by the authors of this system, competition, equality. But it was the equality of the unequal, that’s it. It was equal conditions for unequal partners. When these conditions has leveled off and countries such as China, and Russia is seriously tightened, these rules no longer hold Western countries, primarily the United States, and they went to the game with no rules. Began to apply the methods of trade wars, sanctions, to prevent competition from developing States. The President said on this subject: if these rules are not satisfied, it is necessary to develop a new one. But in any case, they should be based on the principles of recognition of sovereignty and its own path of development. I think that maybe in a less obvious way then, said XI Jinping after that, it was in tune with what Putin said China is definitely not trying to turn out of his way to make considerable concessions. Today I think we’re close enough in our approach to the situation that exists in the world, especially in relation to US policy. I think it is a correct assessment of the present moment. Putin even called and mechanism, yet the mechanism of the “twenty” today, more than established. Even when Russia was in “eight” is too narrow for the solution of global problems. He threw the touchstone, it will be interesting to see the reaction of the West, he said, let’s start with this sphere, which don’t have to cause irritation. It is deeply humanitarian sphere: health, environment, which should not affect any sanctions or trade wars. I don’t think the West will react to it, especially since it is also the sphere of high competition, the market the same medication. Let’s see how the Americans react. It will be interesting. I often heard expert opinion: China in any case, agree with US, because the volume of trade and mutual dependence and interest so deep that they will not break. Your prediction: over there it is a massive trade war between these countries? And we better: that they agreed or differed greatly? Economically. Andrey Kostin: I Think it’s unlikely we would especially like to heat up the conflict. In the end, it can affect the growth of the global economy. By the way, the slowdown of the Chinese economy is bad for us, because our export industry is largely working for the Chinese. Honestly, it’s a double-edged sword. On the one hand, we are interested in making China a more clearly defined their position [against US]. We see that China is in no hurry even in the field of Finance, we do not find support from Chinese banks in terms of interaction in terms of sanctions. The Chinese at times, maybe worse feedback than the American or European banks, to our requests. Probably more clear the position of China against the United States would have been beneficial to us, the problems in the Chinese economy is absolutely unfavorable to us, if a trade war will degrade them, we are just going to lose money, orders, and so on. China — a great power. It seems to me that not all conditions to negotiate. But trump, see also so — and-so comes over, then drives off. Even the situation with the head of the DPRK Kim Jong-UN shows that the fraternizing, it swears. We will see what conditions the United States will be ready to go on, but the Chinese are tough negotiators, they just won’t budge. Although they seem to now have more to lose than the Americans. But America loses and Trump need to be elected. So, simply replace Chinese goods are American — I don’t know… there Is, of course, a global war against Huawei, it is also evident, not only in the us but also in global markets. This is also the Chinese just can’t swallow. What was done in relation to Huawei, even tougher than in respect of “RUSAL”. Again, it paused. Andrey Kostin: Well, the only daughter of the founder and Vice-President sitting in jail, so put, probably, Yes. The bounce is already gone in orders. In this situation, buyers do not take the products because they are unsure of the supplies. This is a very serious blow. Here is really a much more robust sanctions, is simply incomparable with the fact that we are in April 2017 through Google, Microsoft, Apple needs to stop in which case full cooperation with Huawei, it means that the company will not be able to produce a full range of products. Suppose, if something similar happened with our companies. Would ban the the list of companies to cooperate with Russian. Can you imagine that? Andrey Kostin: “RUSAL”, “System”, Vekselberg’s company is also very strict sanctions. Was also suspended the situation. Don’t know what will happen to the company, “GAS”, the situation is very serious. We also tasted the Chinese fully, it will be interesting to watch their reaction. A small note to the above: before the forum came the EY study about investment in the Russian economy in the first place the Americans in the past year, the share of their investment and the volume increased, and the Chinese, on the contrary, became less. Andrey Kostin: I never cease to talk about it: we don’t feel changes for the worse from the business — neither American nor European. Where restrictions us congressmen, of course they do, but what can they actively cooperate. Talk about the subject. Business FM receives letters of entrepreneurs. It, of course. Andrey Kostin: Who gets it? Radio gets us some time when we tell these stories, a stream of emails. We are not a “publicity booth”, we read, watch, contact, then there is verified history. I can say that the most common complaint from business, small and medium is complaints about the blocking of accounts. To block the account we have can be very many. Can on can the bailiffs can just Bank on the basis of those rules, which Rosfinmonitoring has established. Then many businesses did close because they don’t have second, third accounts, the fifth in other banks, they just are not able to pay the bills, to pay salaries, to bear the necessary expenses. How you know this situation? And do you think that you need to solve it somehow? Andrey Kostin: If the bailiffs, there clearly is a legislative measure. All exact, all legal. There are still compliance, there are requirements of the Federal financial monitoring service on suspicion… Andrey Kostin: Yes. You know, we also do this right. I sometimes have to intervene. And I questions quickly solve. I’m usually on the side of business, of course. But the banks should have the right to lock accounts when the Bank clearly sees that transactions related to money laundering. It requirements to us. We have control, we should do it. Another thing is that sometimes, maybe, these requirements are excessive. We believe that the same demands for information that we sent to Rosfinmonitoring, redundant. I don’t even think that the Central Bank and Rosfinmonitoring able to handle all of this great information. I think that there is much to move and improve. But, you know, even today in the world it is a General trend. Today in Swiss Bank even worse. We see that not all trends are positive. Maybe it is not necessary to copy all? Andrey Kostin: Yes, but today the world has become. Today the attention to the translation is very hard. This, of course, complicates the work. But, you know, I think if the company is working with the Bank, a well-known and some time works, I don’t know that the Bank just took and stopped some action… Maybe not a Bank. The bailiffs because they themselves block. They even without the Bank block. FNS through a Bank, but also they are often, and block everything everywhere. The fact that there is one person who has the right to block the account. Andrey Kostin: That’s true. Maybe you need at least one channel to enter? Andrey Kostin: If there is a court decision, perhaps there are organizations that have the right to do it. But I don’t know. I repeat, we try not to do it. I receive complaints, I always do very quickly. Of course, the account is death for the company if it continues for a long time, especially a few days maybe or a week. But this we try to handle the situation. I think you just have to ask. We have a channel going to the Bank. But where it is legal as police officers, we, of course, can not do anything. Another internal issue. The plan was announced the establishment of a regional airline. That is to say, it is considered a much-needed direction in the General development of infrastructure in the country — regional air transport. Andrey Kostin: Yes. VTB and Sberbank were to participate in this… Andrey Kostin: We shouldn’t have. Shouldn’t but were going to. Andrey Kostin: I have said many times, and no I didn’t get broadcast. I said there were no instructions. The idea was expressed by the Gref, which I supported. We decided to try it. While it is impossible in terms of what we have found enough interested parties, we, the banks, not fly, we have no pilots. We haven’t found the company-the operator which would like to do it. We have not seen yet a very fervent response from the transport Ministry, which has its own program of subsidizing transportation. I reiterate that the government is interested in one aspect is the use of national technology. But, unfortunately, we have equipment yet. There are turboprop aircraft Il-114, which are in the process of developing a finished set yet. We will work slowly. Although this topic is still not paramount. Yes, non-core. But, you know, it is very interesting nonetheless. Andrey Kostin: It is interesting, Yes. In Soviet times there was regional air transport, as buses air. Now they are not. Now through Moscow from two neighboring regions fly. Andrey Kostin: well, it’s only public-private partnership, because even in the United States we have studied the subsidies, even in a country where even trying anything not to subsidize, there is subsidizing regional traffic. In Soviet times, because all the budget was, just never thought about it. Here to was the economy, private companies, even banks do not pull it at a loss will not work, so there must be a system of subsidies. But it is, in principle, we have. It can be done. We offered our financial resources to buy the necessary equipment and the transfer of its lease. View. I think the question is not yet ripe. We did not find the necessary level of support among that group of actors that are involved, so you can, of course, but I’m probably old to be retrained on the pilot. So while the situation is. While we have suspended further work on it. By the way, you mentioned that there was a need for public-private partnership that is absolutely necessary for the industry to recreate actually. Generally, one of your main panels on the forum was devoted to this. Andrey Kostin: Yes. And VTB, in fact, in PPP the most experience. So many great projects. Andrey Kostin: Yes. There are already completed projects. And what is the future of this form of work? What are the main directions should be in your opinion? Andrey Kostin: We are currently working on the construction of another toll road in St. Petersburg. I think that if we can construct, in principle, the problem of traffic in St. Petersburg will be largely solved. The same principles about how we built Western high-speed diameter. This concession, I think, the most advanced, because when we refer to PPP, a system in which we build, and then the state pays is, rather, a form of credit. More interesting, of course, the concession. Then significant cost savings for the state in terms of what half need. As for the Federal budget is possible only for a quarter of the cost of creating a product. So we will work. I believe that it is also dual control. You know, when is privately owned, or commercial structure, better call so and state structure, they are each other’s control. We control, so the commercial structures and the state in the face of the city, let’s say, controls us. This is very true. This corruption opportunities lower and the efficiency higher, so we are absolutely behind this principle. But not always we have the support of officials who say: we have the money now is, we are all built. I think that we need to overcome. We need to get business more actively in national projects, including in infrastructure. There are other projects that are active, for example, the state is developing — small and medium business lending. I already talked about this also mentioned today. I once cursed, I say, do not want to lend. I really want to lend to small and medium businesses. We already have a trillion inacreditavel, but I did my own survey. You know, not in the first place loans. They have in the first place the taxes are excessive. The second administrative power and pressure. Only three loans are. And loans, speed loan is sometimes more important than even bet. Although the government’s decision to allocate subsidies in the amount of 2.5-3.5% is also important. But, again, you only need a comprehensive solution. Today for small business, social tax, property tax, and they are often unaffordable. We need some way to unload it from taxes if we want to have a small business blossomed, as in some countries blossom. He is still very small, and unfortunately, I even see you have a page says: “In Moscow the death rate exceeds the business birth rate is actually three times”. So, more businesses dying than are created in these plans. What? Here even loans will, they will die with credit. It is not much easier than with no credit die. Maybe whitewash them a little pressure because today was a good phrase Vladimir Mau’s Sberbank Breakfast. He said that the severity of Russian laws is always compensated by optionality of their execution. Andrey Kostin: It’s Saltykov-Shchedrin, Yes. Now, in General, the enforceability very much advanced. Andrey Kostin: Advanced. And the laws have largely remained the same severe. There is another example. Andrey Kostin: But, you know, they again go into the shadows, because… Maybe we don’t want them to catch up? Let him grow up first. Andrey Kostin: …small companies were again in the envelopes [to pay]. Example is. I have one friend, he has a small business. It was 15 years ago bought an apartment on the first floor in Moscow and made an office there. Legal. Now ten times overestimated the value of the apartment, ten times! And ten times he almost slapped more taxes. Here you have an example: though white, though black. How can he denigrate? Not even he appreciates, and taxes are rising. Remember, you know what? Mesh is not given once for fishing. The hole in the mesh was supposed to be a certain size to fry not to pull out. They have not grown. Andrey Kostin: As Cuba was. Here, it may be that we are a very fine sieve made? Andrey Kostin: in Cuba: to prevent development of medium enterprises, only smaller, was only four tables in the restaurant to have, but no more. And too rich people become. But we have some other principles now? Andrey Kostin: Yes.

The material was prepared with the support of technical partner at SPIEF-2019 — JSC “Sony electronics”

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