tv Bloomberg Surveillance Bloomberg June 19, 2015 6:00am-8:01am EDT
and eu leaders called emergency leaders. bloomberg television will have complete coverage and on subdued global gdp global -- does global recession mean the fed must wait until 2016? good morning, this is bloomberg "surveillance" and we are live. it is friday, june 19. i am tom keene and joining me is brandon. the ecb, brendan, meets with in the minutes within -- brendan: the most important meeting happening right now is a teleconference that the ecb is called the but they really need to figure out to they continue to extend emergency liquidity assistance to grace? -- to grace? two grrece? if they pull that plug, there is no telling what happens. tom: who initiated capital controls on iceland or maybe now greece? brendan: they have sat down with
the government and say, well maybe this is something we should think about. the legal authority comes from the government. tom: there was the update on the many moving parts of greece. let's get straight to our friday top headlines. here is vonnie quinn. vonnie: domestically, the suspect in the south carolina church massacre will be in court today. dylann roof is suspected of killing nine people. his roommate said he wanted to start a race war and have been planning an attack or six months. one survivor spoke to sylvia johnson and she shares that story with abc news. sylvia: it was just horrible. it was just blood all over the place. she played dead in order to survive in order to get him not to shoot her. vonnie: federal authorities are investigating the killings as a
hate crime. european central bank is holding an emergency session over the greek debt crisis today. greek moves closer toward an exit from the euro with finance ministers meeting yesterday. last night in athens, thousands gathered outside parliament demanding that the country find a way to stay in the euro union. alexis tsipras is confident a deal can be reached. european leaders meet in an emergency summit monday. now, the fight over president obama's agenda -- trade agenda shifts to the senate. house approved a measure giving him fast-track authority but the bill passed with mostly republican votes. one week after a democratic rebellion, was killed proposals. shares of martha stewart living shared after one fourth of the company could be close. "wall street journal" reporter that they could be by martha stewart living and the company publishes lifetime magazines.
dustin johnson shot 85 under par to share the lead after 18 holes of the u.s. open and tied with stenson. 25 of the players shot under par outside of seattle. bad year for tiger woods. he shot his worst at 10 over 80. he is ahead of only two players. stenson's caddy is already having a sling on his arm from falling over. brendan: tiger woods lost this. that is a metaphor. tom: u.s. open always really a sport that will be really some serious drama with freight cars going by. let me do a dated check and get through this quickly. we have a packed show for you this morning. the euro at 113 .12. oil back under $60 a barrel.
i would check their on the u.s. from a .71 down to .06 for over the last bills. grease shields a little bit lower this morning. russia, of course, the 18th street petersburg international economic forum calling mr. putin's personal job is. this is russian reserves gold and the bottom line, rush has created a lot of wealth. here is the oil boom the song recently. china influenced, no doubt. a $100 barrel will come up and we recover. it is that they like the glue we would -- with -- the gloom with greece. brendan: the question was always, can they handle their own currency and do they have the reserves to do it? no, they don't but it does not matter in the face of these sanctions. tom: if they get russia devaluation or depreciation, the russian people are not as affected by the sanctions in the geopolitics. brendan: one huge issue was
pension payments and they can just hold onto those and pay them with the ruble. tom: coverage throughout the morning. ryan chilcote is in st. petersburg and later today, mr. putin and mr. suppressed -- and mr. tsipras are scheduled to speak. we will bring you this live. charlie rose will have an extended conversation with mr. putin. ryan, over to you. ryan: i caught up with the chief executive of the country's largest independent oil producer. first off, the former fineness -- finance minister floated the idea of moving this country's next presidential election of by one year for the end of 2016. what does vladimir putin think about that idea? if he wins the election, he will be in in power 16 years, the election if he was to win it. the second thing is, we have seen the european union move against russian state assets in
western europe. as possible compensation for what they see as the confiscation of the you goes oil company -- of the yukos oil company. what does the russian president think about that we see any aspect of western companies frozen? the all the branches to ukraine would be welcomed by investors and he will be talking to charlie rose and we will hear from the greek time minister. he has been cool as a cucumber, at least in terms of his appearance in public. has not spoken adult so far publicly. not about creditors demands, getting a deal done -- we will use his speech to the business leaders as an opportunity to talk to creditors and investors at dynamic duo, tom, we will have the leaders of greece and russia, two of the most talked about leaders in all of europe. both of them making big speeches this morning. tom? tom: thank you so much and he
will join us again in the 7:00 hour. vladimir putin and charlie rose rose interview, look for that today in our u.s. 8:00 hour. i should say the east coast. tsipras of greece, so many want to know what he has to say. we are told in eight minutes that this was out in the blur of speaking that we will also have him speaking as a which is a perfect way to bring in hans nichols. ecb will go into an emergency session and minutes. greece is running out of money and options have become fewer and fewer. one thermometer of the german 10 year yield in this morning showing some of the angst out there as hans nichols is in luxembourg. informed by ideas of what matters right now. hans: right now, it is what he will say in the next eight
minutes. he was remarkably silent yesterday after the meeting and during the meeting. according to people familiar with the matter, he is holding his fire. we also have this question of what could potentially happen with capital controls. we just heard from yanis varoufakis denied pernicious leaks because according to one report out there, in that meeting yesterday, they talked about the possibility of capital controls. now, mr. yanis varoufakis is insisting that it was not discussed and it is another effort to put pressure on greece. the relationship between yanis varoufakis and his counterparts is completely broken. if that was not cleared two weeks ago, it is clear today. brendan: what european official has most recently publicly mooted the possibility of a greek exit from the eurozone? hans: the most recent -- last night we had bloom who said we were heading in that direction. dijsselbloem is the dutch part -- dutch finance prime minister
and he is leading the negotiations. this morning, we heard from the austrian finance minister and he talked about it once again that this could be a likely outcome. he has been through the teller in all of this or the most negative. one inches in thing he also had advice for holidaymakers. he said don't worry about going to holiday in greece. you will probably still be able to take money out of the atms. guys, if that is a finance ministers idea, and the situation, i would hate to see what their addition -- what the idea of slamming it is? tom: it is important to speak with someone of months, if not years of experience in restructuring debt. carl lineberger's with high frequency economics and joins us i telephoned this morning. carl, i want to go to texas to literally wrote an essay yesterday in project syndicate that i got me the -- that i got maybe you wrote it. the greeks have a tough choices now it is the imf turn to admit
that the policies it has imposed for five long years created a disaster. or the other creditors, the toughest choice is to admit, as the imf knows, that their greek debt must be restructured. dr. weinberg, when we wasting the restructuring call for? car:l: good morning, tom. i think we are looking at that very soon. i think this goes to the creditors committee but in the next few weeks if not the next few days, the tone of the meeting yesterday was a breakdown in negotiations and efforts to over a default. if the default is not diverted goes to the creditors committee and it is black and white as to mapping the next step. the creditors will restructure. as far as the piece that you just quoted. sounds like he is on the same page as greek finance minister yanis varoufakis. just spent a good half-hour reading on his website his clarification of what he said yesterday. that is pretty much it. the greek view is it is not
working what has been them before and we have to do something different. we are rejecting the policies that got us to where we have been over the last five years and there is probably some narrative that but it is not what the european finance ministers are prepared to accept in order to convert a default. i think we have got to default out of this. brendan:$ work -- he worked at the diversity of texas before returning to politics. european leaders did not have a plan b what should it look like right now? carl: i think the most important thing they should do in their own interest and i'm not considering the interest of the greek people or anyone else but their own interest -- keep greece within in you even if they default. if everybody is saying, well greece asked to leave if they default, they will get thrown out, blah, blah --i cannot see anywhere where it was written that was a short. of greece stays in, that is everybody's chance of getting as
much money back as they can help for. it greece was shown the door, if they leave the euro system and central banks, the ecb is on the hook for a lot of money and that money will never come back. if they float their own currency, it will be much harder for them to pay back their debts. i think the most important outcome of all of this, regardless of the recession of the debt itself on a which in my mind is of secondary importance right now, the biggest is to keep greece within. vonnie: european leaders feeling more pressure today to come up with a solution. carl: with russia, i don't see -- vonnie, good morning, i'm thinking that the russians are pretty broke them selves, the reserves are dropping precipitously and they don't have a lot of scratch to apply to greece right now. i think the more fruitful place for him to go would be beijing. china has been a vested interest in keeping greece within. tom: let's leave it there. carl weinberg, thank you so
much. high frequency economics. rush out with a headline. russia -- brendan: we just had an e-mail from michael who said the greek central bank can actually and hasn't their own authority to impose capital control. not necessarily something that has to go to parliament. tom: we need to hear from you. i to it a question out of "surveillance" is straight to the point. will russia bailout greece? you just heard carl weinberg say, no, it may be china. we will come back and talk about the amazing call on a global slowdown straight from our absolutely nailing that call. stay with us on this busy friday. bloomberg "surveillance." ♪
let's get to the top headlines. vonnie: in china, stocks have had their worst break since the global financial crisis in 2008. the shanghai index entered a correction falling more than 6% today. it sounds 13% for the week. this concerning that china's longest bull market has led to unsustainable prices. twitter once you do know it is not just a gathering place for celebrities, politicians and journalists very louvered news is reporting that twitter is developing a marketing campaign to show the public how to use the services. it is also coming up with a new feature that will organize content around live events. brian williams will reportedly take a big pay cut when he goes back to work. nbc is devoting millions to msnbc for exaggerating his war experiences in iraq. they are confirming that lester holt will permanently take over for williams as anchor of nightly news. tom: let's move to the global
gdp. we will stay on greece and russia as well in most is a global friday. it has been an accurate call, to say the least. the president of global strategy absolutely nailed the direction of global economic slowdown. the new mediocre is with us and as a backdrop for global tension. i know brendan wants to get back over to greece and russia. you have comments on that. first of all, let me go to the elephant in the room. will we see with your call a hard landing in china? >> it is not clear that they are going to have a hard landing, tom, but from my meetings in beijing, shanghai and hong kong 10 days ago, it's seems clear that the economy is slowing a lot more than the gdp number of 7.75. i don't think it is a hard landing yet in the picture. the reason is that they still have close to $4 trillion worth of foreign exchange. i believe it can bailout stock markets and companies. tom: in part of that is the
global exchange, fx can solve anything. do you look for a currency war and currency depreciation to be the solution of choice? komal: i think currency depreciation also in china is a policy conclusion. it is not unlike greece which once leaves the eurozone will have a problem where the ruble has depreciated since the middle of 2014. the chinese have so much fire power in terms of foreign exchange holding that whether they depreciate that is very much left to them but they are playing a game. making sure people do not take money out of the country and therefore, i do not think you will see a straight-line depreciation. it did not happen during the 1997 asian crisis when the chinese held ground to the exchange rate and i think pretty much that is what they anticipate. brendan: does having that in
your pocket prevent you from making reforms that you desperately need to make? tom: secondly russia as well. brendan: russia as well but china, the last month, failures included in the -- there was clearly weren't there to be done. if you can bailout your own the stock market to whatever you want, is that preventing them from doing that work? komal: what i found, i was in asia when the decision to raise -- it is clearly a conflict for the government that they face between reforms which should allow some of the companies to go bankrupt, the local governments to go bankrupt and default on their debts. what -- that would have a negative consequence, so the government keeps moving between the two objectives. between reform and economic growth. which is why you see the stock market shooting up both on the shanghai exchange and today, lung, falling very shortly --
today, alone, falling very shortly. i think you will see that continue to persist. that is not going to go away with the government. tom: we will come back. headlines estate with this fed call in 2016. we will talk about that in this hour as well. that may set you up for a busy morning on bloomberg television. the president of russia will speak today in the vicinity of 705 to 715. we will bring you all of that important speech and then we hear from alexis tsipras. he is in st. petersburg and this is ask the ecb meets in a critical meeting for his nation's future. and then, charlie rose interviews vladimir putin in the clock hour today. all of that for you worldwide on bloomberg television. stay with us this friday morning. bloomberg's "surveillance. ♪
tom: good morning, everyone. bloomberg's "surveillance." vonnie quinn and brendan greeley hear from us -- here with us. noah feldman, who are brave about on law and legality, are uber drivers employees or not? they said that uber is not supervising the driver, so uber is not the employer. the wise nine-year-old said uber can fire the driver of the drivers raiding gets too low which sounded more like uber was the boss -- who is right? i defy you to give a better answer than a kid in elementary school can. this is a great essay. brendan: the recently are having this fight is because particularly in the u.s., we relied so much on employers to do so much. if we had a safety net that did not rely on employers, we would
not have to have this fight with starbucks, uber, all employees that employ service workers on whether or not they have employees. tom: i would say 99 out of 100 of uber drivers who are asked, if you have used uber and l.a., in worldwide -- are they working for the company or not? komal: i always have a great conversation with cooper drivers. they are always doing something interesting. they are a student, architect, in los angeles, you come across leading actors. what they seem to indicate is that they are free agents. it looks like i can work when i want and i go back to it. they don't behave like they are invested to an employer. tom: i would suggest that that is our mr. feldman came down. he is the legal expert and he nudged at the end of his caliber on you as a that california walked a step back from saying no, they are an employee and they will be independent contractors. brendan: let's step out of this conversation.
this is a state solution. let companies the lexical, let them hire independent contractors, but let's provide benefits if we will do that and make these decisions. tom: i thought it was just great how his two kids got into it as well. where are we? futures up -- brendan: coming up, we will talk about communicating and the feds forecast, volatility, all of the things that depend on one another. that is coming up after the break. this is "surveillance" on bloomberg television. good morning. ♪
the works for some time. the roommate of suspect dylann storm roof says he was a committed segregationist who had been planning something like this for months. roof is now in jail and arrested more than 200 miles away from the killings of nine people in the stork like church. he will be in court today. -- people in an historic black church. he will be in court today. eurozone leaders will meet at an emergency summit monday and the ecb has its own emergency session today. last night in athens, thousands turned out to urge the government to reach a deal that would keep greece in the euro unions. prime minister alexis tsipras says an agreement will still be reached but he will not accept the deal that requires more austerity measures. they did not sound optimistic. >> we hope for the bus but we now must be prepared for the worst. in the united kingdom, we have taken the measures to increase our economic security so that we
can deal with the risks like this from abroad and clearly now, we must go on. vonnie: greece's creditors are showing their exasperation after listening to the greek finance minister. ims managing director lagarde says she wants a dialogue with adults in the room. there are less than two weeks before diplomats reach a deadline for negotiating a deal on iran's nuclear program. president obama's national security advisor susan rice tells bloomberg, with all due respect the u.s. will not accept just any agreement. >> the only deal we are going to get is a good deal. if we don't get a good deal there will not be a good deal. if we are able to get the deal implemented and finalized that meets the same parameters that we agree it will be a good deal. it will cut off all of iran's potential pathways to bonds. vonnie: congress would have 30 days to review any deal and iran said they would accept limits on the new program in exchange for the west lifting sanctions. fitbit was a hit in trading day.
the fitness tracker device sword rising 48%. fitbit's sales almost tripled last year and the company is profitable. ceo told bloomberg that this year they will spend three times as much on research and development as it did last year. for the third time in six seasons, chicago holds a parade to honor the stanley cup winners. black cop fan players and it never gets -- blackhawks fans say it never gets old. another seems likely in oakland for a parade for the nba champions -- golden state warriors. tom: the debate on should be in oakland? vonnie: san franciscans right over the bridge. tom: stanford, berkeley oakland, san francisco -- brendan: it is the big day and they could be on the wrong side of it. tom: we are doing the fed here right? brendan: the bank of england
started a blog under governor mark carney who pioneered the central banks opened in canada. not to the fed. these are all in it -- now to the fed. these are all innovations to let the fed slowly let us what their plans are. global strategist is not buying it. komal: ford guidance simply has not worked. if you look at what happened with the bank of england and to mr. carney, as long as 1.5 years ago, he was talking about raising interest rates and then it turned out that economic conditions did not allow that to happen, so he had to repeatedly postponed any rate hike which we have not had at all since. in the case of the federal reserve, we have had economic growth forecast since 2009 that reached forward guidance is based. every year, that growth forecast and it is you know when the fed makes a forecast it will not be hit.
essentially, what the forward guide does is it ends up in forward confusion and what you have for the markets is a lot of volatility that tom has been talking about this week without actually helping the market to be like itself. brendan: how do you get this right? do you really want to go back to alan greenspan we had no idea what the fed's plans were? komal: you do not want to be giving speeches but you want to give some indication of where you are headed. to be able to have the dot plot on interest rates which eventually may or may not be followed and repeatedly indicating that the quantity has come to an end and we have assumed that interest rates for going to go up in 2014, we are approaching the end of 2015 without it. those are the points we can all do without and the markets would be better off without such """ guidance. brendan: is there any way to let
the markets know we don't know what we are going to do? i feel like markets do not believe the fed. you do know what you are going to do but you are not telling us. komal: i think that if the fed does give any guidance and essentially, you and i are investors in the market and we are allowed to play the game as we see best -- we would have less volatility than with forward guidance. tom: one volatility is part of the game, part is a parlor game of when the federal act. you are still in 2016. morgan stanley has come back to a more constructive december what are the ramifications if the september crowd has to capitulate or even worse, have to capitulate to where you are? no one is prepared to that komal:. they ought to be prepared to because all the people who have been calling for rate hikes in the past have been postponed.
the 10 year yield will once again go below 2% and going toward 1.50%. even though it hit 2.50% -- 2.51% recently, we are back to the 2.20% area. i don't see any bids with inflation remain so low. global growth is disappointing. tom: then you would have dollar weakness by definition and that is where you fold. komal: that is exactly right. that is what you have today. you have a currency war involving japan, involving the eurozone, involving the united states, and it is not ending. tom: this is crucial in that these moving parts have scenarios or outcomes and greece is clearly an outlier. so far, he has been really right. brendan: he has been really right but the problem with communication -- you were talking about your gp call versus the feds gp call.
necessarily, does the fed have to be a little more optimistic than it should be? i mean -- komal: i don't think it should be because as a market participant, you want your official agency, whether you call it the fed what the bank of england or a finance ministry to be as close to being realistic as possible. you don't want your fed to be a cheerleader. and then eventually disappointing the market every time because it does not work out. he could then, the markets lose faith in the forecasters. if that is any good -- is that any good? which is why, i think to be clearer on what it is, if they want to be dependent, the way to do it is to say, if the data falls in this category, we will raise interest rates. if not, we will keep them unchanged. brendan: this is amazing. we had another hour, we could talk about the bank of india who
is not a cheerleader but a task master. tom: in dealing with currency depreciation. brendan: exactly and dragging the country along behind him. coming up the robots are coming for your job, my job. we will talk about the soaring popularity of rowboat advisors who are bouncing portfolios for you. your job is over. go home. this is bloomberg's "surveillance." good morning. ♪
tom: itom: guess it is to stop us, the international economic forum since 1997, it has become a focal point and you must attend to keep mr. putin happy if you are in the business world in st. petersburg. ryan chilcote is there and mr. putin will speak in a bit. we will bring that to you worldwide when mr. putin starts to discuss. right now, as to greeley was speaking and we will bring that to you worldwide as well. brendan: i was speaking live, tom. we can all be replaced by robots. the software system that automatically rebounds as portfolios and also victim of today's single best chart. this is according to consulting firm kearny. we are looking at an obvious growth pattern. tom, what is going on here?
if the vanguard came for fidelity, are rowboat advisors coming -- are roboadviosrsors coming? tom: john bogle figure. you don't need an algorithm by index or lower fees. the real question is -- to algorithms work and it is funny how they don't. brendan: join you have to rebalance among indexes? you can't beat the market, but don't you have to pick which market you are in? tom: you have to pick which one you are in and the rebounds is one of the most intellectual debates. this is back to the trust company work. it is a big incident -- big institutions have to rebalance and as you and i know, it is a raging debate. komal: it is a raging debate. it is not only between active and passive management but going toward what brendan said, when you rebalance it on a periodic basis, what is the basis on
which you will do the rebalancing? and if you have set troops ahead of time and they look respectable then you continue with that and i think that process can work. tom: this can be larger than the dow. something as simplistic as i -- don't buy the worst but by the second worst. brendan: i don't want to get into epistemology, but is in and like a model in the sense that it carries certain assumptions and those assumptions can be right until you get way out into the tail active value model and then they are very, very wrong? tom: it's a brilliant question but i would say algorithm is more discreet and that is what robo-investing wants to do. it is more mathematical place. komal: the problem with the awkward and is as we found not in 1988 with hedge fund failures and supposedly risk-free investments, and we found that again in 2008, when we had the financial crisis the target funds which were supposed to
work well did simply work. the so-called once in a century and once in a million seem to be happening every 10 years and that is the problem for algorithms. tom: very quickly, this debate comes up with market is not correct and go down. no one is talking about robo0n investing when you are down 10%. brendan: there is the smile that you missed. that is the one. tom: we have photos. vonnie: we do. let's take a look at photos making news. number three, mourners laid flowers in front of the emmanuel ame church after wednesday's mass shooting that killed nine people. members of the u.s. house representative and senate and staff added in a prayer circle in front of the u.s. capitol to honor those gunned down. dylann roof is suspected of planning the attack six months ago. tom: a fabulous overview of
history of this building and this church. fabulous history overview. this iconic ame church. brendan: i think that america will spend a long time wrapping its head around this. vonnie: number two -- in china a section of highway ramp collapsed late last night around 3:00 a.m. tom: this is not an earthquake? vonnie: no just collapsed. the number of vehicles that felt still remains unknown. we do believe one death and for injuries have been confirmed so far. hopefully, it will not rise to much. brendan: there was a great views last year in "the new york times" talking about chinese contractors coming to poland to build roads and the frustration they had building using their own methods and poland. asa no, no no. we will do this right and we expected to be had already. vonnie: zoo keepers all over the world are re-creating this scene of chris pratt entertaining his
raptors squad. they have taken the roles extra seriously to stand in for the velociraptors and you have penguins, giraffes, and even chickens. brendan: and tigers and rhinos. my favorite one is the penguins. kangaroos? what is not funny about 10 euros? -- what is not funny about kangaroos? i love the world. tom: ok. later on, we will move to russia. vladimir putin speaking in our east coast 7:00 hour. we will bring you all of those comments. and then mr. tsipras will speak later on 7:30ish. charlie rose will sit down with russian president at 8:00 a.m. this morning. putin and tsipras and then charlie rose on bloomberg television this morning. good morning. ♪
to expect big fines in the european union and investigations. the a you regulators have accused google of squeezing out competitors in the comparison shopping markets. the regulators say the final be set at a level to ensure deterrence. the fcc has come to the rescue of anyone who hates automated phone calls. regulators have agreed that some companies do not have to connect so-called robocalls to the consumer does not won them. in the past, but companies were worried about breaking rules that said they had to connect every call. fifa's disgrace is not confined to the courtroom. soccer scandal over the governing body is also a box office slot. fif'a's film is the biggest failure ever. it cost $29 million to make and it was pulled from distribution after taking in literally just $918. tom: brendan greeley -- brendan: i had a hazardous conversation with people that we
cannot believe that hundred 18,000 -- believe that it is not $918,000 -- no, $918. 62, 62, 62. the joke on the russian internet last fall. that is the age of vladimir putin and it was supposed been a trifecta of the russian collapse. we have proper kaplan of the harvard business school on the desk with us. -- we have robert kaplan of the harvard business school with us. you have met vladimir putin and you know that economy very well. rumors were greatly exaggerated. but failed to happen? robert: -- komal: one, russia is a lot more resilient, the sixth largest country in the world, so it is not comparable to iran or syria in terms of u.s. or european sanctions. that is the first big difference. the second is, russia started
2014, brendan, with about $530 billion worth of reserves and now they have about 310 billion. the officials in moscow told me that they were prepared to deal with sanctions continuing into 2017. vonnie: if i can come in with data, gdp in the last quarter, -2.2% and 15.8%. ordinary average russians are not feeling what they are saying, are they? komal: it is clear the situation is very difficult and i came from my last visit in february bonnie, i gave away my forecast that is actually worse than the consensus. i looking for -5% for 2015. the consensus is probably more around -3%. clearly, the price of the inflation in prices and the fall in real grades which is starting to take place is helping. what is hoping is that the russian population is declining from 149 million to 143, 144
million. that in turn means looking at population as reduced and the real rates do not drop as much as what inflation. tom: economic background, mr. putin will speak and then he will speak with charlie rose. we wanted to know exactly what he will say and what should we listen for? robert kaplan from us hbs. what would you emphasize that we should listen for this morning? robert: which audience is he speaking to? tom: which is important for any ceo. robert: it is particularly important if you are running russia and you have the degree of control that he has. he is dealing with very, very difficult economic times domestically. it is tough for businesses to raise capital, the ruble is declining. they can hide some of these impacts for a while but not domestic. he is -- his first audience, i
believe, is always with the mystic audience because he has got to retain control. and because he has such tight control that is the reason he is able to manage this and he needs to some extent position russia as a victim, a little bit us versus them and that appeals. tom: so maybe on ukraine, the southern broader border that he will talk -- robert: he will talk what is happening to them is unfair and how western powers are treating them unfairly. tom: do you bring in nato on that? do you think he will bring up nato? brendan: we have been hearing from russian officials for the last part two days just how unconscionable this act of bringing in tanks of poland as a needless provocation. i would expect him to say something -- i want to ask about the event itself. robert tom and i were talking about how it clearly wants to be
a doll those. -- it wants to be a dabos. are these for the egos of the leaders of the countries or do they provide a valuable forum? robert: when this conference was ecstatic it was with higher oil prices, pre-ukraine, pre-sanctions and it actually made some sense that they may be emerging leader among growing economies. the sanctions ukraine has taken the air out of this and this is why this seems a little harder now than it may have five years ago. brendan: i want to talk a little bit about getting the gap out of russia. russia has been working with germany to get the pipeline online and now of course, they are in discussions with greece. this bears on what we are talking about. what does the russian economy look like? is this politics or economics and they talk to greece about this pipeline? komal: i think it is partly
politics, partly economics. on the political side, clearly it agrees with russia and let's say sanctions should not be extended when they expire in about one month time. that would be a big victory for russia. i don't think it will happen. it is one of the hopes the russians have an very much on the political side. on the economic side, despite the drop in reserves and the problem that oil shares have with loyal -- lower oil prices they still have a substantial and not of foreign exchange reserves when you compare with the crises of 1998 and 2009. they have the ability to help greece. the point here is that i don't think they will come to be -- come to the assistance of greece just for them to turn around and give that money to the imf on the european union. once there is a default and you actually need new money to purchase medicine support greece, for instance, that is when russia's money becomes important. tom: thank you so much. we appreciate this.
tom: greece stares into the unknown. will yanis varoufakis and tsipras link? they will hold emergency meetings through the weekend. vladimir putin speaks and leadership lessons for tsipras for prudent and for our next american president. good morning, everyone. this is bloomberg's "surveillance" and we are live from new york. it is friday, june 19 and we have vonnie quinn, brendan greeley. brendan, a most eventful hour. brendan: i want to listen to for what he says about the american movement and a plan to move heavy brigade into eastern europe. that is what he sees as a provocation and we see it as an obvious move and that is what i am waiting to hear. tom: let's go to st. petersburg now. ryan chilcote there as we await comments by mr. putin. ryan which audience will mr. putin speak to?
ryan: he will be speaking to a russian audience of course. he is always speaking to a russian audience, even outside of russia. it is geopolitics and the subject of the day is really they need you making -- is the eu making a move on assets. this is the compensate the investors to the $250 billion -- the eight year with moving on russian state assets and possibly going to seize them. we just heard from the foreign minister saying, hey, this is tit for tat. tom: very good. thank you so much. joining us this morning, the former secretary of defense -- the excuse me here, i'm gasping. mr. secretary, when i look at this moment for vladimir putin speaking to russia and america but more than anything, to europe. this new nato we have training right now -- where will nato be in six months? >> it is unlikely to be where it
is today. frankly, i have been disappointed in terms of the capability that nato has and the response ability the united states has to carry it. it used to be on a 50-50 share basis and now we are up to 75 close to 85% of the burden. i don't see much changing. the movement of the troops going into the baltic area, i think that is minimal in terms of any shift and balance of power but it is a signal to prove that don't start trouble in the baltics of you have done in crimea. tom: you were secretary of defense for a democratic president and you have been critical of this democratic president. a lame-duck presidency in the final year hot should they provide leadership in responding to vladimir putin? >> i think he has to send a signal that we are ready to enforce our obligations and make sure that putin does not intimidate the other nato countries. sending some small amount of assistance and more troops to the region is a strong signal
and one that has to have the backing of our european friends. tom: robert kaplan from harvard business school joining us this morning. he has a wonderful military perspective. the secretary of defense speaks of nato for eastern europe, how does a vladimir putin perceived the new effort by nato? robert: i think he is saber rattling. i think he is laughing. i would love to hear european and on whether putin is bluffing or not. that is my perspective. the secretary once said recently, putin was punching way above his weight. tom: do you agree with that mr. secretary? >> i would say he is punching above his weight because he thinks the united states is full of weakness and we are unable and unwilling to respond as we did little in ukraine and did little in terms of taking military actions in syria. i think he is trying to push the envelope to see how far he can go. izzy punching above his weight?
he's got big economic problems and i think that message will be the single or one that he is trying to give. brendan: my economy is coming back, time for you to get back in business. tom: oil will save the day. brendan: there are a lot of countries hoping oil will save the day. you were secretary of defense in 1997 -- 1987 when russia signed an agreement with no heavy troops east of germany. that was a different russia, a different world. is that the agreement worth anything now? is it even worth remembering? >> as far as europeans are concerned, we have not been provocative to russia in that sense. we have encouraged countries who are capable of joining nato but i don't think we are in the position to try and provoke president putin. he sees it as provocation but i think his actions in both jordan -- tom: i want to go to st. petersburg. let me ask the heartfelt question -- was bill clinton ever on time for a meeting?
william cowan he was really on-time but he had a good reason for his delay. he always made sure he touched every person in the room. tom: let's go to st. petersburg mr. putin taking a page out of putin -- clinton script -- why is vladimir putin always late, ryan? ryan: i think it is intentional clearly. you cannot be that consistently late without knowing her he was 70 minutes late for the pope late for angela merkel. he is always late because he knows people are willing to wait for him as investors are right now. i will say about the discussion -- about that discussion i was listening, putin saying what is going on in eastern ukraine and in general with the standout with the west is also a waiting game. he thinks he has much more of an appetite to wait it out then the rest. that is why he thinks he is not punching above his weight and he thinks he can see this thing through. tom: ryan chilcote, stay there,
please. robert kaplan from us -- here with us from harvard. are they friends i know? robert: let's put it this way -- he needs time and everything other than the reserves we talked about earlier, everything else is going against them. oil, sanctions, currency raising capital. he needs to change the subject and he needs to keep his population stable while the rates this out and hopes for higher oil prices and other things that might improve the economy. tom: he needs the people behind him as well. what is the difference? william: so far, he has his people behind him but another fact is whether or not there will be an agreement with iran. whether the united states and the five plus one with iran and the nuclear deal. if that happens, sanctions will tend to come off iran and he will benefit from that as well
and he will say, pulled the sanctions out for because i hope bring the deal about. vonnie: at one point he said he was a fan but he was not living in reality. is he making rational decisions? william cowan at the is making poor decisions long-term. long-term, russia will not be able to complete in terms of economically in the country. right now, short term is not good for the country. brendan: one decade ago, the russian military was under staffed, underfunded, demoralized -- that is one thing that vladimir putin has really focused on. professional lives in his military. has he gone far enough quick enough? robert: i think he is still understaffed and underfunded. his morale and russia is possibly riding high, although, i don't think you can completely trust the figures in terms of popular support that is coming out of russia. also, you see that russia is bleeding cash. their cash reserves are
decreasing and in that sense, time is not on their side. brendan: has he professionalized his military and improve the quality in the last decade? william: we have not releasing them in action other than the border of the ukraine. just remember, what does russia have to offer the world? oil gas and weapons and i think that is where he has put his investments. making sure they are comparable or even close to the united states. vonnie: if the world was not paying attention, with he stopped his antics? william: no, i think he will continue his antics. i think he feels that he has been in the next on the world stage and given the back of the hand by the united states and that russia is entitled to much more respect. i think that is one of his motivations to say, we are imported. i've important. pay attention. tom: i think this is very important. sanctions and european sanctions
against russia. have they worked? robert: i think it is very impressive for the sanctions have been doing. they have taken a cut out of the russian economy in addition to oil price. if the iranian sanctions do come off you would see more supply -- come off, you would see more supply in the system and you could see oil prices more. william: i think they have had a significant effect. tom: i don't think it has been said enough, the sanctions are still there. brendan: he feels vladimir putin diminished. i see the same thing going on in russia as i do in europe. which is that they play a much bigger role in these -- is that nato plays a bigger role than it should. are we talking about egos colliding in st. petersburg? robert: in particular, when you have a leader -- most leaders do not lead their ego get too far out of check because they have to run for reelection and they do not have that much confidence
about getting reelected. this is one leader who has a lot of confidence in his grip. his ego is very important and his image first how his population sees him and his strength -- they identify or you would like for them to identify with them. ego and how he is perceived is very important to him. tom: we welcome all of you this morning to bloomberg's "surveillance" and particularly to those in europe and across russia. we are waiting to hear putin from st. petersburg. we have the former secretary of defense and our twitter question of the day brings russia back to greece -- will russia bail out greece or will china bailout greece? we need to hear from you. stay with us from new york city bloombergs "surveillance." ♪
tom: good morning. an international morning and international relations warning. we have been looking to russia to wait for a speech by vladimir putin. charlie rose with the conversation in mr. putin and the 8:00 hour but kuhn is so often late. he was late for the pope, late for us. i cannot believe he is doing that. right now, the ecb in an emergency session within the hour. grease running out of money and we go to hans nichols and luxembourg.
what will we learn from draghi in the ecb? hans: we will learn how much capital has gone out of greece have a big gap is in the last 24-40 eight hours because wednesday with the last increase. and then we will learn whether or not draghi and the rest of the governing council wants to extend the lifeline to the great bank. that is no sure thing. there are some members of the ecb. let reluctant to get involved with state financing of sovereign government. tom: the one institution we are not hearing from is the imf. what will they do today? but with the imf and lagarde do this weekend? hans: well, hopefully, they will have a set of proposals from greece that are actually digestible. numbers you can plug into a spreadsheet and see if the math adds that. that is what yesterday at the summit collapsed --yanis varoufakis made these proposals but they're back in the envelope proposals according to
ministers. they want to have official proposals that are analyzed at the technical level and then blessed and then maybe you could have a conversation about the political agreement. tom: thank you so much in luxembourg this morning. robert kaplan with this and william cohan, secretary of defense in a time of kosovo on the others. -- it is the balkan states at the end of the day and we forget about the politics of the region. why is greece imported to germany and far more importantly, why is greece imported to the united states? william: they are important as a member of nato. while it was not supported -- openly supportive of the efforts to keep the ports open so we could supply the activity, it is important as a country, to the euro if it were allowed russia to bail out or call on russia to bail it out. i would pose serious problems for russia.
tom: there is more going on than the economic debate this morning. we have gone through that. let me start the agenda for you as we wait for vladimir putin to speak. a speech by alexis tsipras as well from greece. these are both from st. petersburg. finally, scheduled for the 8:00 hour, charlie rose in a conversation with vladimir putin. stay with bloomberg television and bloomberg radio. ♪
tom: good morning, everyone. bloombergs "surveillance." we welcome all of the morning wide -- worldwide. ryan chilcote in st. petersburg. ryan, we wait and your st. petersburg audience waits. what will putin say about ukraine? what will you expect to hear? ryan: i would expect the russian president to say that western europe the united states should be talking about -- talking to
the ukrainians about what they need to do to calm the conflict down as much as russia. he still believes that the ukrainians are not adhering to the deal that he and the ukrainian president agreed to with the french and german leaders act -- leaders. he just keeps going on about that and i'm sure we will hear about that today. tom: very good. ryan chilcote will be with us to the morning as you look at the comments by mr. putin and by mr. tsipras. we went to digress for a moment. something very important that we know is of value. we are with robert kaplan of harvard and the former secretary of defense william cowan. you had an intern in 1974 -- she has been pretty good, hasn't she? robert: she has done very good. christine lagarde, one of the most impressive and capable women in the world. tom: i think our audience would like to know what was she like as an intern many years ago and what it was like to see her now
with all she has accomplished with her law firm in chicago and service for the french government? robert: i saw a very young tall, elegant young woman who was very gifted with language. she taught me a lot about france. i hope i was able to teacher politics. tom: within that, though, and the reach she has, she faces a unique responsibility now with the imf. americans distrust the imf. how should we trust her institution? robert: i think we should trust her because she is really gifted capable, fair-minded but fair. i would think we should put enormous confidence in her. brendan: we have been talking about one thing for this hour has been military power versus economic power. part of it is these international institutions like
the imf -- how important is this fight over it with imf breaches or whether or not the u.s. joins the asian infrastructure bank? >> i think that the struggle going on now with greece is a struggle for influence and territory. i think that what putin is trying to do is pull greece into its own sphere of influence. in the 1940's and 1950's, greece almost went over to the old soviet sphere of influence. we were able to stop that and put back into europe. i think now is trying to bring them back, and i think the real danger would be if putin could convince tsipras to default on the loan and thereby, tried to pull greece more into their influence. vonnie: secretary cohen, we had carl weinberg on earlier suggesting that china might want to play a role. it is the chinese leadership taking notice of all of this? william: i am sure they are taking notice and they certainly have the resources, but i think china is very cautious at this point.
right now, they are concerned about being in the regional power in the asia-pacific region. at some point in time, they will want to extend that but right now i think they are more focused on internal problems and building a much stronger not only economic power, which is already powerful, but military power in the region. >> china may now want to step on russia's toes either. this is russia's area. russia is leaving asia to china and i think you will see some respect. tom: did all of you guys play risk as kids? shaking the dice? brendan: you took the australia strategy right? [laughter] you make a late game move. tom: this is not much different. these interdependencies -- brendan: i am intrigued by the sense of history of where greece belongs. secretary cohen, of course there is a statute of harry truman in advance that goes right to the heart of it.
are we just looking right now at that same 100 years struggle to see where greece goes in the cold war? william: i think we are. we mentioned the kosovo campaign before. greece was sympathetic with the russians. they would not support them -- openly supportive of russia but that is whether sympathies were. i think there is still a live there with greece. tom: what is the shock you worry about as we see who speak, tsipras speak, what is the shock that keeps you up at night? robert: i think if there was speculation in that area -- what is going on in the imf and territorial woodson ship is people are increasing the risk level in order to get better gains from a negotiated bargain. the possibility is that it there is some sort of miscalculation or something spirals out of control and forces the other side to react and escalate, i
think that is the danger. at the same time, russia has .1 of the military spending of nato countries. i think they are more worried about things get in out of control than we are. i think we have the upper hand. brendan: part of everything we talk about is how well business does in greece. the goal of all the reforms that they are insisting on -- what is that environment like right now and greece? hasn't improved? william: it is externally difficult. we talked off camera. my own hope is that this is going -- we are going to a choreography where at the end he intends to do a deal and i think the europeans intend to do a deal. people need to realize that he needs to play to the domestic audience. he is about cutting tension benefits and more increase in added taxes. before he agrees to all of that he needs to prove to his population that he has tried everything else. that is how he got into office. the danger, when you go down to
with us on set william tell william cohan robert kaplan, and anders court. not nearly as gloomy as we have seen. certainly no urgency right after -- right now. brendan: we are watching tonight now. he is about to speak. the reserves are not in the forefront of his mind, but that is something he needs to be aware of and that foreign reserves are power. tom: vladimir putin waiting this date. -- waiting to speak . in-between between, we will hear from mr. tsipras. but now, vladimir putin of russia. vladimir putin: russia and its desire to choose the best world experience.
politicians, business people forced the interest and confidence in our country. we see it as serious and long-term partners. that is why in accordance with tradition here at this forum, we always discuss openly our achievements and operations and our problems and difficulties with which we face and tasks we have yet to fall. we met many of you a you are go. since that year, a situation and in which the world a russian economy are developing has changed. and as changed dramatically in some areas. russia is limited in its access
in the world capital market. we should add also that the downfall in expert goods. the consummate the man has been reduced, which has been used to push up the economy. i agree with the participants of the discussions which a party taken place yesterday. i agree that the demand against to -- begins to restore some. if we speak about energy prices that our economy depends a lot the average euro price in 2013 $107.9 avail. in 24 in march of this year it was $56 a pair of food -- a barrel. the russian gdp fell by 2.2%. that was compared to the same
period last year. manufacturing industry has reduced by 5.5%. at the end of last year, many people predicted as you well know deep crisis in russia. this has not happened. we have managed to stabilize the situation to draw the line across the negative situation and we are successful and going through the difficulties because the russian economy has accumulated in her strengths quite well. we have a positive trade surplus. we are increasing our exports. what i would like to give as an example to illustrate this fact is the volume of non-raw exports in 2015 has grown by 17%. the export of highly processed goods in the first quarter was about $7 billion, which is a
gross of about -- growth of about 6%. it was 15% in the physical volume. we have made trained -- maintain the control of inflation. now this trend goes down it goes down after significant price increase in the first three months of this year. in january, that was the .9%. in february, 2.2%. in march, 1.2%. in april, the inflation was 0.5%. -- i mean the gross inflation was 0.5%. the trend is really to lower the rates of inflation growth. we have a sustainable budget. our financial and banking systems have adapted to the new conditions. we have managed to stabilize the currency exchange rate and keep our currency reserves intact. i like to highlight that we do
not put any barriers to free flow of capital in our country just like in 2008 and 2009. the federal budget deficit from february to may 2015 is 1,000,000,000,380 rubles. we expected to be at 3.7% in accordance with the current budget law. the reserves in russia is more than 300 -- i have been discussing that. as of june, this was $360.6 billion. it has been a little bit less because we haven't using the reserves. -- have been using the reserves. and has accumulated 5.5% of the
gdp. the second foreign nation welfare find -- fund is 5.5% of the gdp as well. we did not let the unemployment to rise and now it is 5.8% of the economically active population. i remind you that in 2008 and the crisis, the unemployment rose to 8.3%. the sections introduced boosted our work in replacement. in a number of areas, we have made significant process and a significant result of import substitution. we have good results in machinery, building better chemistry pharmaceuticals, and some other industries as well. a great example is the agro industrial sector achievements.
of course, we have to do a lot in this direction still, but for example, the day production has grown by 3.6% as compared with the previous 4.8%. she's 29% -- cheese 29%. meat by 12% or 13%. the substitution problem is not barricading oneself from the economy, but to learn to produce a manufacture competitive products which will be demanded not only in russia, but in the global markets. the final purpose, the final task is to fully and effectively use our inner domestic capabilities to solve the developed tasks. i would like to rupees -- repeat that we respond to external
restrictions not by closing our economy, but by expanding the freedom and raising the openness of russia. this is not just a slogan. it is the real content of our real policy. the work which we are now performing and grading the conditions for the business to look for new partners and open new markets to participate in the and limitation of the largest products. -- projects. for the last year, more than 60 enterprises with foreign participation have begun their work. during our forum, we are opening several technological enterprises, including here in st. petersburg on the gas turbine production. i like to think the representatives of all the partners. i would like to thank all of our partners, who despite the known political problems, continue to work in russia.
they continue to make new enterprises and job here. thank you for that, friends. [applause] ladies and gentlemen, the measures of supporting the economy and financial system have overall work well. and now, we are concentrating on solving systemic tasks. we had the long-term development agenda. our task is to assure sustainable growth race conditions of the economy, the performance of labor, and the inflow investments. our priority is improving the business climate, staff training for the economy and government education, and technologies. i would like to dwell on these issues a bit more. i will begin with the business environment and the competitive smith -- competitiveness of the russian jurisdiction.
our position is that we would like to create the utmost, free predictable, and favorable conditions for investors to invest in russia. we had taken the decision to freeze the tax interest for the next four years and to not increase the fiscal burden on the business so that companies will plan that work on the midterm. we will follow this policy despite the external conditions and the budget load. i have actually given you the figures that would say that are reserve funds allow for such policies to be implemented. with that, we create additional stimuli for new and developing companies. i like to remind you that we have taken the decision to introduce the tax holidays to individuals entrepreneurs to lower the fiscal burden in the
special regimes and to give taxation benefits for the new, creative industrial enterprises in so-called "green fields." yesterday, we discussed a number of problems which they face. there was a proposal that we make similar regulations, similar benefits for new investments in not only greenfield projects. we will analyze these proposals of course. i think we will be able to edelman to -- implement them in the end. i hope that we are free from tax-exempt capitals and to have them come back from russia -- to russia from abroad. we will have guarantees to protect them from persecution. at the same time, we will raise
russian companies and their subsidiaries abroad. the amendments have been introduced into our legislation and a fully agree with the decisions of other organizations. with international's nouriel initiatives, we have updated the federal legislation majestically, which regulates the conditions for business activities. we are changing the approaches of the authorities and of the monitory board. it is to become more clear, transparent and open. since 2015, there will be no inspections on the small enterprises for the next three years. those enterprises which have not yet had the serious violations. i expect a national jurisdiction to be more competitive and we must move forward constantly. with it, we have to analyze how
effective and efficient are the measures that we are taking. here, we must have efficient feedback from business. that is why i would like to agency of political initiatives and leading faces of communities to analyze this law enforcement practice and analyze the world best practices and world best experience. if it is necessary to propose new decisions. the climate rating for the russian regions have an important role to play. the reading itself is not the target per se. it is working to finding and expanding the best regional practices throughout all the territories of the country. the initiative to create this rating was coming from our leading business communities. the particularity of this project is that austin was themselves assess the business
situation and the quality of state management, etc.. by the way, this year more than 200,000 business people from all the territories of russia have taken part in these quizzes and questionnaires. i would like to say that we have already had the examples of this positive situation throughout the discussions, but i would like to use this opportunity to name them again because it is really worth it. the regions and territories and the republicans to our region, i will like to have a light -- highlight the governor's and management in all the layers of power. this is one of our key development areas as well. in this regard, i like to say that first, we need to form a
class of state managers who know how to work flexibly in a modern way who understand the demands of business towards the business climate and to public management as such. one of the important steps is to launch a mechanism of the constant upgrading and updating of the staff training. we are aiming to create essential exchange best practices in public management. it could become a platform for raising the effectiveness of new skills and also a platform for developing new ideas and civic horizontal languages between representatives of the regional government teams. second, i believe it necessary to create special staffs in each regions, which would become the administrations of development, which would ensure the favorable
investment climate. a comfortable business environment is an important condition for creating the mass layer of non-raw smes. that is a real way to diverse able economy and re-create jobs. our goal is to make smes grow and to win the domestic market and develop their export potential. that is why we connect the activities of industry support institutions and the institutional stimuli. i'm speaking about the industry development funds, the foreign the moment fun the russian investment fund, these mechanisms. also, the russian exports and where domestic companies will be able to resist all the range of services of putting their products on the foreign market. on the proposal of the business community, we are creating the
opportunity for small and medium entrepreneurship. the business will be able to receive legal and meth logical here, including the access to public procurement and state and company procurement. we are consolidating the mechanism of supporting smes. we expect that this will give us good feedback and good results. ladies and gentlemen, all those who want to be leading must follow leaders in business and governments and technologies and education. we have done a lot to strengthen domestic r&d basis, to increase science education and industry to implement the ideas and projects into real production. in the forthcoming years, we'll like to technology lead -- technologically upgrade our
industries in the raw area and non-raw area and also agriculture. through clear environmental standards, we will stimulate the info of the best technology pencils. the development would become the demand on the legislation. we must create the incentives for the companies to invest in developing domestically. i would like the government to propose additional solutions. we must take stock of the existing support mechanisms to support the practical research and implement innovations, which would finalize how they do fight -- benefit. as far as developing institutions are concerned, they must be fully calibrated to correspond to the task of
technological organizations. we are aimed at ensuring strong about 11 -- develop mental basis or today and the future as well. the rise of technological planning our expanding greatly. russian companies must take the key positions in those industries and those markets, which would determine the economy and the lifestyle of people to an three decades later. as happened with the -- it has happened with the i.t. technologies for the recent decades because they have drastically change a light. to solve these protests of -- prospective talents we have launched an initiative where representatives of science and technology and business participate. it is evident that this is a long-term project, but in two or three years, there should emerge new companies, educational programs for staff training and hr training which would be able to solve the most modern task
and work with the most advanced technologies. and another important direction -- the recent session of one of our leading business associations. the proposal was voiced to organize the system of the transfer of foreign technologies. it would have successful experience and moving to rush of the technologies in pharmaceuticals car manufacturing, and consumption good production. we must make this work systematic and we must use the capital for the development of institutions. i like to ask the government and business communities to make concrete proposals in this regard to create the optimal movement forward of the state in the business and transfer of technologies. we also understand well that the quality of education is about -- is a utmost importance. yesterday, our colleagues of foreign investment companies were speaking about that as well
as i met them. at the same time specialist training posted take on not only the problems of today, but the best expensive it is the development of a new market. our school boys and girls are reading the most procedures -- leading the most procedural institutions. let me give you one example. research and optics have proven several times that they are undisputedly the best in the world. and this year, the university team has proved it again. the have the world's strongest programs and schools. -- they have the world's strongest programs in schools. they won the team championship six times. let us congratulate this achievement one what time.
obviously, a lot depends on university management and the director. in this area, we also need a new type of those who knows what the needs of the industry are, who feel the trends of technological the moment. russian enterprises suggest that russia create a reserve of managers, university managers for high degree institutions for engineers and technical specialist it i believe it is right to limit it. at the same time i'm calling on representatives of businesses to work long and actively and transit universities. big also participating -- they also can participate in developing their programs for businesses themselves. a very important task of their facing now is improving the quality of vocational training. we also have to go to many regions who are developing
successful education programs. it is combined with locational education. it is no coincidence that the regions that have achieved a lot in developing vocational training are the same time leaders in the investment trading. at the same time they are enjoying the high social economic dynamics. today, our engineers and maybe the labor workers have to be very highly qualified. that is why we are building the system of professional standards. the participants here are employees, business associations and we are doing it within the qualifications and the president of the russian federation. i think it is essential to consolidate our efforts to build a holistic system of human resources training based on the most -- best international practices. the system should include all
the links in the area of creation of children, vocational training, and high education in engineering as well as international championships of manual labor workers. and i would like to dwell in a not important area for years to come. we have to create a mechanism of supporting talented children so that they could fully develop their potential and to be very successful in the own country, and russia. -- in russia. while launching a project in this area, we must make a center for schoolchildren and all the countries regions. children who are very talented and sports, arts, and visual sciences come to the center to further study. the map of the global economic development is changing their rapidly. asia and pacific countries like
china, japan, south korea, as well as other states have parted and accounted for one quarter of the global economy. these are the markets that will be the made powerhouses for global growth for years to come. given the conversation and the global economy, this trend is developing. we are working together with our partners at the economic union and building our policy with asia and pacific countries. we are trying to eliminate barriers in faith and investments. this year, they have concluded their first free trade agreement with vietnam. russian companies will be able to export a whole range of items. with no custom fees. earlier this year, we signed a joint agreement on economic union development and the
economic develop of the code. we have an agreement with china. we are always seeking new approaches to interaction between the economic union and china. they also implies expansion of our corporation and of lamenting big projects. we are also trying to stress this among all financial institutions stressing the partnership with asian and pacific countries. it is very important to develop the far-reaching russia. we are trying to create favorable business conditions for capital movement and for industry movement. investors will get a new chance to work in the russian markets. at the moment, at the far east of russia there is fast the moment with a whole range of tax benefits and the benefits are
launching state support and projects. at the same time, they can be more flexible and more sophisticated mechanisms of support. our government has argued prepared on building a freeport of vladivostok. this bill is going to cover all the key points of the region. in 13 areas. the residents of the port area will get wide benefits that will not be limited to only tax benefits. regulations will be used on them and they will get a cost free zone. in september of this year, we are going to have the first economic forum where they will develop details on our suggestions. let me rephrase that we are committed to cooperation with everyone who is ready to work
based on equal rights and mutual respect. with all those who are interested in and lamenting mutually beneficial projects. are cooperation with big countries is also very important and it will definitely facilitate the expansion of our new business contacts. i believe the summit that you will host in july will hopefully strengthen our ties. let me rephrase that close will not mean that the world develop without our traditional western partners. ladies and gentlemen russia is open for the world. where open for scientific and economic representatives. we are open to businesses all over the world. i'm sure this dialogue is total and our common interests.
it will help to improve the trust that we happen enjoying it served the foundation for our work. we are facing a big task today. were going to enter new markets to develop new technologies and to government widescale projects. -- and to implement widescale projects. we are joined by entrepreneurs and citizens in our countries who are working for development to make sure russia is successful. thank you. [applause] brendan: vladimir putin has just finished speaking in st. petersburg. davos of russia is what he would like it to be. we heard a laundry list of things that i didn't expect him to talk about. among them was dual education programs and hr training.
this was a president trying to say that his economy was in normal global economy has rebalanced in the light of sanctions. ryan: i think there were three points there. the first one being that there was an external threat or there is an external threats of this country and it is called sanctions. number two, they are hurt but not nearly as much as anyone suspected. he talked about how the ruble has stabilized. that was all about how things are not as tough as they could be. and finally, a very clear message that russia is open for business. it was a long speech, but that is pretty much what it boils down to. whether it will work on investors, we will just have to see. we have seen in the past that he has offered these bones like we heard today freezing taxes for a four-year period. whether that entices investors
to come back and given the geopolitical backdrop, that is something we'll have to see. vonnie: we are and say in special coverage of the st. petersburg economic forum where butter lamp couldn't just spoke. we are joined by anders, robert and william p we are very happy to have appeared we are going to alexis tsipras was the finance minister of greece. -- who is the finance minister of greece. alexis tsipras: we should reach success in our area and that is to create a multi-diverse economy. it has a big role to play and what we have been