Vladimir Putin says he and Dmitry Medvedev negotiated and prepared the pre-election role swap before offering it to Russian voters for approval at parliamentary and presidential polls.
Vladimir Putin: Good afternoon!
Remarks: Good afternoon!
Vladimir Putin: I am open to your questions.
Konstantin Ernst (Channel One):Mr. Putin, the latest convention of the United Russia Party made the political situation in this country much clearer. Just a couple of weeks ago we had a chance to discuss that with Russian President Dmitry Medvedev. Today we wanted to ask you the questions which we believe are of interest to our fellow citizens. The first one was voiced both by your supporters and skeptics: Why are you returning to the Kremlin?
Vladimir Putin: I am aware of the wave of questions and comments in this regard that appeared on the Internet, in online and print media. And here’s what I would like to say. As I’ve mentioned many times, and as first Russian President Boris Yeltsin said, I never aspired to this position. It’s a well-known fact. Initially, when this offer was made, I explicitly expressed doubts over my ability to handle such a huge workload and enormous responsibility for the fate of the nation. But once I take up a job, I do my best to complete it or, at least, to yield maximum results.
But your question seems to focus more on the criticism that our opponents have leveled at us. You know, I travel a lot across various regions of the country to meet with ordinary people, not some men of straw, but real ordinary people. Many of them turn out to be my supporters, as you said, and I hope they are in the majority, and they say that many people would like the see things developing this way.
But there are people who, as you mentioned, that criticize me and Dmitry Medvedev. They say that if your humble servant takes part in the election, that would mean there would be no election at all. Perhaps that would be the case for them, but an ordinary citizen always has a choice to make. So our critics might see it their own way, but in this case they ought to present their platform, and, what’s more important, not only to present it, but also to prove in practice that they can do this job better. I often hear a phrase like ‘it’s so bad, it can’t get worse’. Indeed, this country still faces a lot of problems, a lot of outstanding tasks need to be addressed, and some things could have been done better. But I strongly disagree with those who say ‘it cannot get worse’… I would like to remind our left-wing audience, i.e., the Communist Party and leftist radicals, of the late 1980s. We all remember the many jokes of those times, here’s just one: “Friends come to a party, and the hosts ask them whether they want to wash their hands with soap, and when they get an affirmative reply, they say the guest will have to drink tea without sugar.” The gist of the story is that it’s too much to have both, too luxurious. Why? Simply because those were the times when ration cards were introduced to distribute the basic necessities as well as basic food items. Ideology and political life were controlled by a single political force which actually led the country to ruin and collapse, which led to its breakup.
People lost the instinct of self-preservation and failed to comprehend the consequences of the events that unfolded back then.We threw the baby out, along with the bath water of a bankrupt political system and inefficient economic patterns. We let the country break apart. People were saying ‘it cannot get worse’. And there it came! The 1990s were marked by a complete collapse of the social care system, factories and even whole industries ground to a halt. People didn’t get their pensions, allowances and wages for months. There were times when pensioners, workers and servicemen had to wait for up to six months to get their money. Crime was rampant. Things were so tense that the country was heading towards civil war. We must call a spade a spade and remember the massacre in the Caucasus when aviation and heavy equipment, including tanks, were deployed. We still have a lot of problems there, also in terms of crime and terrorism, but, thankfully, it’s not what we had in the past. That’s why I would be very careful about phrases like ‘it cannot get worse’. Triggered by two or three missteps, this past could be back with a crushing blow before we brace ourselves for a response. Our gains in politics and economy are still very fragile.
There are others who say that we are in for a period of stagnation, similar to the time when Soviet leader Leonid Brezhnev was in power. I do not want to sound too critical, there were indeed many achievements, but in fact I do not recall any of the post-war Soviet leaders who would be as hardworking as myself or the incumbent president Dmitry Medvedev. I don’t remember any.
Remark: They couldn’t.
Vladimir Putin: They couldn’t – due to their physical condition and a lack of understanding of what needed to be done. They might well have done something, but they didn’t have a clue or enough will for that.
We can also refer to the experience of other countries. I didn’t try to hold on to power, and you know it perfectly well, although I could have easily taken the advantage of the constitutional majority of the ruling United Russia party to amend the Constitution. But I stopped short of that. I didn’t change the Constitution to suit one man only – myself. I wanted people to see that there would be no tragedy in a natural change of power.
Konstantin Ernst: Yes, Franklin D. Roosevelt was elected three times…
Remark: Four times.
Vladimir Putin: Prior to that, some U.S. presidents ran for a third time, but if I am not mistaken, none of the attempts was successful, except for Franklin Roosevelt who was elected president four times running. He stood at the helm throughout the ordeals of economic depression and World War II and was elected four times because his policies were effective. But the exact number of terms and years in power do not really matter. Helmut Kohl spent 16 years in power in West Germany. He wasn’t president, but his post was actually the most important executive job in the country. The same goes for one of the former Canadian prime-ministers. Look at post-war France where a president could have been elected for seven years without a limit on the number of terms. It was just recently that France introduced amendments into its constitution and cut it down to no more than two five-year terms. Very similar to what we have in Russia. What does that mean? When a country is facing difficult and hard times, when it’s recovering from a crisis and getting back on its feet, it’s these pillars of stability, including in politics, that play a vital role.
We’ve been through what could be called the collapse of a state – the Soviet Union broke up. What was the Soviet Union? Basically, it’s Russia; it was just called a different name. We went through the turmoil of the 1990s and only in the past decade did we start to get back on our feet, providing for domestic peace and order and balancing out the situation. Russia is in a desperate need of a period of sustainable development. In terms of our plans, and my particular plans for the future, this is a priority – we must consolidate the basic foundations of our political system and democratic institutions, we must provide for progressive development and diversification of our economy on a new modern basis, we must ensure an improvement in our living standards. That’s our plan of action.
As regards my return, nothing is decided until the people have voted. It is one thing when I hear some people say that they would like to see that happen, or when people in certain regions suggest something, but it is a different thing when the whole country goes to the polls. We need our people to come and express their attitude to what we have been doing.
There is another important aspect here. The most active part of the political spectrum, people who talk about democratic institutions in Russia, they are concerned that democratic processes may be rolled back. This is definitely not going to happen, because I can’t imagine Russia developing without democratic institutions. This is exactly what I intend to work on. I will strengthen our country’s political system and its foundations. I will work to develop democratic institutions and market economy with an emphasis on social needs.
Oleg Dobrodeyev (VGTRK): I would like to go back to the United Russia convention on September 24th. It’s been the talk of the town ever since, a thrilling topic for many. On Saturday, Mr. Medvedev said that these decisions had been taken beforehand, long before they were announced at the convention. Could you possibly shed more light on when and how these decisions were taken?
Vladimir Putin: Alright. Naturally, there is no need to make a secret of it. Basically, it’s totally natural. It is not some sort of a secret agreement between two or three people (in our case, it is two). It is a perfectly normal practice in politics when people create political alliances and work out some rules of conduct defining how they will work together. Long time ago, I mean four years ago, we agreed that such a scenario is quite possible, if we manage to stand this trial together.
Of course, we didn’t anticipate that we would be hit by a crisis, but we saw that something was looming, something was happening to the world economy that could cause a crisis. We understood it back then, we felt that… That’s why we decided to go through the next four-year term together, and if we managed to pass it successfully, we would be able to make our proposals on the power configuration to society – on the roles each of us would play, on the guiding principles and the path we would take our country along. And when this time came, we voiced our suggestions, but not as something decided only between us and not decided upon by the citizens – we laid out this configuration and it will be up to Russia’s citizens to approve these suggestions at the polling station or not. Elections decide everything!
Oleg Dobrodeyev: But could you possibly reveal the details of the conversation the two of you had shortly before September 24?
Vladimir Putin: There were no special details. We had been talking about this during this whole period of four years – I mean, three and a half years. After all, we met quite often. We spent much time together – on vacation, skiing, exercising or even doing our regular work, political or economic. We always kept that in mind, and quite often we would go back to that issue one way or another. Say, we discussed how to adjust certain details because of the circumstances. But on the whole the plan remained unchanged.
Vladimir Kulistikov (NTV): Mr. Putin, did you discuss the following detail with President Medvedev: the president is known for his efforts to curb the monstrosity with which our state often treats individuals and make it more humane. He suggested a number of initiatives: a reform of the correctional system, a reform of the criminal law, a reform of the political system, etc. On the one hand, you are saying that these things must continue; yet, on the other hand, you have the reputation of a hardliner, a man who believes in an iron fist. That’s why I would like to ask you whether you will continue those initiatives launched by President Medvedev.
Vladimir Putin: On strategic issues of our country’s development, we share the same views. But we are not the same person. We are different, and at a certain point Mr. Medvedev deemed it necessary to take some steps in order to make certain aspects of our public life more humane. That was his right as the head of state. If the voters, the people of Russia, support the configuration of power that we have suggested, I will make no major changes to what Mr. Medvedev has done as president. We’ll have to wait and see how those things will work. But, to tell you the truth, I don’t think those changes were very big. What Mr. Medvedev did as president was based on his understanding of what is right and what is wrong and on the current situation in our country. But I repeat, I don’t think those changes were revolutionary.
Let’s take Mr. Kulistikov, for example.
Vladimir Kulistikov: Yes?
Vladimir Putin: You are the head of a major media outlet – NTV, a national television channel. But there was a time, if I’m not mistaken, when you worked for Radio Liberty.
Vladimir Kulistikov: Yes, there was such a time.
Vladimir Putin: Right.
Remark: It’s a black stain on his reputation.
Vladimir Putin: It’s not the matter of black or white. . . .
Vladimir Kulistikov: I did not say that. Somebody else did.
Vladimir Putin: In any case, you used to work there. And when I worked for the KGB, we viewed Radio Liberty as a branch of the CIA. Of course, it was only a propaganda arm, but still. Anyway, such an attitude towards that station was not unfounded. It was funded by the CIA and, what’s more, it was even involved in spying activities in the former USSR. Today, the situation has changed, but still, no matter how you look at it, Radio Liberty is a media outlet that expresses the views of a foreign government. In this case, it is the US government. So, you used to work there, and now you are the head of a national television channel in Russia. How long have you been working there? For quite some time, right? Isn’t this is a sign of liberalism? In other words, you can’t say that there is no liberalism at all in Russia. Of course, there was a period in our history when we were facing serious threats. Those threats were so grave that the very existence of the Russian nation was at stake. Naturally, during that period we had to tighten the screws and exercise tight control, especially in politics. What else could we do? The constitutions and charters of Russian regions were full of all sorts of things; the only thing missing was that those regions are parts of the Russian Federation. No wonder we had to be tough! But now the situation has improved, and, like you said, Mr. Medvedev decided to liberalize our public life, especially the criminal law and the criminal procedure. So, now we will see together how those things will work. I regard this simply as part of our efforts to develop our political system.
Konstantin Ernst: Mr. Putin, why did you and President Medvedev decide that it is he who should be No. 1 on the United Russia ticket for the upcoming election?
Vladimir Putin:I will explain it to you. Working as the president of the Russian Federation, Dmitry Medvedev has been able to implement a number of crucial projects that prior to that had existed only on paper and stayed within minister rooms. He introduced them into the public domain and practice. These things were initially formulated in the development program worked out for our country till 2020, the famous ‘Program 2020’. It included a development of democratic institutions, diversification of economy and its modernization. But earlier, these were mere words. President Medvedev has to take credit for turning these words out of behind-the-scene discussions and ministerial rooms and introducing them into public domain and practical work. So it’s important to have proper tools to continue this work I would like to remind you that according to the Russian Constitution, the Government is the main executive body in control of the key leverages and tools of routine, day-to-day policy-making – both in economy and social care. So it’ll be natural if Dmitry Medvedev heads the United Russia Party list, if the voters cast their ballots in favor of this ticket and we are able to form a viable parliament where United Russia retains its leading role. In that case Dmitry Medvedev could form a viable government to jointly implement the policies that we have put on his agenda.
Oleg Dobrodeyev: Going back to the United Russia Party. In the summer, you often said that it was necessary to refresh the party ticket, and that’s when the Popular Front was set up. In September, you went as far as to say that half of the future United Russia faction in the State Duma will feature new names. But today we see that the majority of its members, at least among its supreme leadership, are still the same people that were there before. In hindsight, how do you assess the summer campaign?
Vladimir Putin: I’m not sure it’s appropriate to use such expressions but I’ll say it: a Russian proverb says, “You should only make haste when you’re trying to catch a flea.” You should always be calm and take one step at a time. I’m not taking back anything of what I’ve said. On the contrary, we are moving in this direction, and this movement will continue.
What I mean is the following. First of all, the election has not taken place yet. The State Duma election is slated for December 4, 2011. We had to put together the list of United Russia, and I said back then that we will draw new people onto the party’s list by using the potential of the Popular Front, by attracting new people with fresh ideas and the energy to implement those ideas. So what do we have? Out of 600 names on the list, more than a half have never taken part in federal elections. It means we have managed to update the party’s ticket by more than 50 percent. In the summer, I said that 20-25 percent of the ticket should come from non-members of United Russia. Now that figure has increased to a third. These are people who’ve been delegated by various social organizations – youth, women’s, trade union and professional organizations. They are all on the list. I know that many of them are on the top of the ticket and have high chances to make it to the State Duma. I believe that this task, which was the priority for us, will be met – we will significantly renew the Parliament within the United Russia faction. As for the party’s leadership, there will be changes there, too. But first we need to get through the election.
Konstantin Ernst: Mr. Putin, you talk a lot about stability, but stability has its negative sides, as it sometimes results in nation-wide stagnation. How do you feel about the lack of staff rotation in the government? Some ministers have not only produced dubious results over their terms in office; what they produced was a series of failures. Don’t you think the fact that they are still in office is a sign of stagnation?
Vladimir Putin: First, we need to define “failure” and “a series of failures.” It is true that we may have – and have had – shortcomings in certain areas. Sometimes, it is the minister’s fault but very often it is not. In fact, quite often the reason something bad happens in a certain area is not because of the situation in this particular area; it is because of the general situation in the economy or in society. It is wrong to make a person a scapegoat – although, of course, if a person is personally guilty, he should face the consequences.
Second, frequent reshuffles in the government are a sign of weakness. They indicate that officials are either incapable or unwilling to accept personal responsibility. They keep passing it around like a hot potato. But responsibility has to be collective. If an official is guilty of making a mistake, the people have to know about it and his team has to make the appropriate conclusions
Finally, reshuffles and officials’ attempts to hide behind their superiors’ backs, all of that does not make administrative bodies function better. You have to try everything you can to make an official work before you decide to dismiss him. One more thing: when we choose people for certain jobs, we always try to make a good, thought-out choice. It does not always work out perfectly, of course, and in these cases we are forced to let people go. That is true.
Oleg Dobrodeyev: Still, the best way to avoid too much of a standstill in your staff policy is to get rid of some of your old allies who are no longer working efficiently. Your predecessors – Gorbachev and Boris Yeltsin – they never hesitated to drop off the ballast. This is actually the reason why politicians – especially notable political figures – are always essentially alone. General de Gaulle and Winston Churchill have spoken of this. Do you perhaps feel the need to let go of some of the people you have been working with over the past several years? Alternatively, will things go a different, way, which is perhaps easier to envision in Russia, with current Kremlin residents moving to the White House and vice versa, resulting in no changes?
Vladimir Putin: Well, talking about the loneliness top politicians have to deal with… That concept does exist and I could say I know what you are talking about. I’m not sure it is because you have to sack people. On the one hand, you are right: if I sack a person, I doubt he will like me; but on the other hand, I have to appoint somebody in his place, which means I make a new friend. Their loneliness is not related to staff policy. It has nothing to do with appointments and reshuffles. It is there, but let me tell you what causes it. Prominent political figures cannot let anyone near themselves. They are not allowed to favor certain people over others. Their decisions cannot be based on personal sympathies. They have to be based on professional, impartial analysis and the will to take responsibility. Then again, if you don’t mind me speaking frankly, we are all only human, and everyone wants their share of the benefits that being close to someone in power provides. I am forced to put it plainly, but it’s true. Not everyone pursues that, of course. Some people, especially personal acquaintances, have their own moral code and never come to me with requests. They live their own life, sorting out their own problems, but the temptation to ask a top-ranking official for help is always there so we have to keep people at a distance. This is what causes that solitude that you mentioned.
As for the willingness to get rid of people who have proven themselves inefficient (this is what we should be discussing), every high-ranking official – it does not have to be the president or the prime minister – any minister of business executive should be able to do that, but did we not discuss this earlier? We need a lot of new people in the government and the parliament.
At the same time, we cannot go to extremes. There has to be a degree of succession in power, we cannot start playing games. We cannot go and dismiss the parliament just because someone on television or some print journalist said we have to. That would not be serious! We have to look at the people who are making their third or fourth attempt to resolve problems they have been working on, and if they are tired but their performance was adequate, we have to find some other place where they can apply their efforts, talent and experience. Once their positions are open, we bring in new people with fresh ideas and motivation to implement them. This is what we are planning to do.
We have a lot to learn from the great politicians you mentioned. They each had plenty of experience in politics… I would even say they were philosophers as well as politicians. De Gaulle has a lot of different sayings. He is one of my favorite figures in politics. You are professionally connected to France, so you might know this saying of his: “Always choose the hardest way, you will never find rivals there.”
Konstantin Ernst: You recently visited China and, as many noted, it was your first visit abroad since you announced you were going to run at the elections. Political connoisseurs noticed that the first trip President Medvedev made in late 2007 in his capacity as president of Russia was also to China. Does that mean China is becoming Russia's priority international partner?
Vladimir Putin: it is a coincidence. If you look at the government's schedule, (it is not a classified document) you will see that Russian-Chinese intergovernmental meetings are conducted on a regular basis, Chinese Premier Wen Jiabao visited Russia last and it was my turn to visit China. It was a regular planned trip. We have a very tight working and summit schedule – Chairman Hu Jintao visited Russia as recently as June – which indicates that China is one of Russia's priority partners. We have all reasons to consider China a strategic partner of Russia, and not only because we share the world's longest border. Our trade is growing at a great rate. China is developing very rapidly, turning into a valued partner, a great market for Russian-manufactured goods and a source of investments into our economy.
Vladimir Kulistikov: A partner, Mr. Putin, not a threat?
Vladimir Putin: I have said this on more than one occasion to those who tried to scare me with the Chinese threat (in most cases it was our partners from the West). However lucrative the natural resources of Eastern Siberia and Russia's Far East might look, we all know they are not the prize in today's biggest global struggle. That struggle is for world leadership and we are not going to get in China's way there. China has other competition there, let them figure it out. For Russia, China is, first and foremost, a reliable partner. We can tell the Chinese authorities and the people of China are willing to build up good neighborly relations with us, to look for middle-ground solutions to issues that seem extremely complicated. We can tell they are ready to do it; we take measures to indicate we are ready and, as a result, we find points of contact. I am sure it will continue to happen in the future.
Oleg Dobrodeyev: As for the global leadership, you recently wrote an article for the Izvestia daily, where you suggest creating a Eurasian economic space that would be a bridge between Europe and booming economies of Asia-Pacific. At the same time, everyone remembers you calling the downfall of the Soviet Union the last century’s biggest geopolitical tragedy. In this respect, what would you say to those who see in your words some sort of an imperial ambition, a desire to recreate a new empire?
Vladimir Putin: Are we talking here about criticism originating in the post-Soviet space or from abroad?
Oleg Dobrodeyev: There is criticism both here and there, because these ideas indeed give this impression… We all understand what is to come out of bringing together the potentials of those countries you refer to. And I indeed believe that speaking of the post-Soviet space, many there perceive it as a threat – I refer primarily to those who perceive it as an external threat.
Vladimir Putin:Well, if we are to talk about criticism both from the post-Soviet space and beyond… Speaking of the post-Soviet space, I’d like to say the following. It takes as much as a pocket calculator, even the most primitive kind will do – you know there used to be this old mechanical calculator called Feliks where you had to turn the handle to do the sums – or you could just to the simple math on a piece of paper to see what economic big bang, what economic profits we shall get by putting all our capacities together.
By the way, as for the processes currently under way which I wrote about I can say that I was not the sole author of those proposals and plans. Moreover, it wasn’t solely Russia. In fact the first impetus in this direction was given by Kazakhstan’s president Nazarbayev. He came to visit me here in Novo-Ogaryovo and said, look, I thought it over, let’s do this, that, and that. We already were on this track, but…
Vladimir Kulistikov:When did it happen?
Vladimir Putin: It was in 2002 if my memory serves me right, some time around 2002. We discussed the issue at my place – here, in the next building. There were four of us – Nazarbayev, Lukashenko, Kuchma who was the president of Ukraine at the time, and me. I suggested that we don’t start until he arrives, so we waited for him and started our discussion. You don’t need to be an expert to realize that if we combine our countries’ potentials – in technology, infrastructure, transport, energy sector, mineral resources, workforce, territorial and language opportunities, which are no less important for developing a common economic space, if we combine all these potentials, our competitiveness will surge. It will grow dramatically! We are using the potential we have inherited from the older generation and we can transfer it to a new, modern basis today. We will lift the restrictions that exist in the interstate relations today pertaining to the customs, currency rates and multiple approaches to technical control and so on and so forth. We will debureaucratize the economy, establish a single common market where goods, people and capital will circulate freely, introduce unified standards of economic regulation, provide secure borders for the common market space, in terms of economic security first of all, and we will make progress – be more efficient, more attractive for our foreign partners. And if we are committed to introducing the principles of the World Trade Organization into our operating procedures, this will make us more transparent for our external partners.
To be honest, this is exactly what we are doing, but of course it is always up to the sovereign state to decide. It is not about a political coalition meant to revive the Soviet Union. Today’s Russia is not interested in such things. Russia is not interested in being exposed to excessive risks related to bearing the load of those countries that, for a number of reasons, have fallen behind us in certain spheres. But we are prepared to assume a part of this burden due to the common interest of all the parties including Russia in creating a broader economic space, we are prepared to assume this burden today, after an appropriate calculation of risks, of course. This is what I had to say on our CIS partnership.
As to the foreign critics who say that Russia has imperial ambitions, what can I say? We see what is going on in Europe, for example – integration has reached a level even the Soviet Union could never dream of. I think you know – and if you don’t, I will tell you – that the European Parliament passes more decisions binding on the member states than the Supreme Soviet of the Soviet Union ever passed for the Soviet republics. Today there is talk of setting a new common government in the direct meaning of the word, a common controlling body for intercurrency relations in the economic sector, and nobody mentions imperial ambitions in this connection. And look at America! North America is engulfed in intense integration processes that involve the United States, Canada and Mexico. The same is true for Latin America and Africa. It is okay over there and nobody has any objections, but when it comes to Russia, here we are – imperial ambitions! I can tell these critics, who, by the way, don’t seem to be very conscientious or scrupulous, “You know what, mind your own business – go combat the climbing inflation, and the growing national debt, and even obesity. Do something useful.”
Konstantin Ernst: Mr. Putin, Western countries did not react strongly to your decision to run for president at the upcoming elections. They said it was Russia’s internal affair and, as Angela Merkel put it, they were ready to work with any legitimately elected president. You must understand, however, that politically Western states consider you a “hawk.” How do you feel about that and what is going to happen to the “reset” of Russian-US relations, which exists as an idea but there is not many signs that it is working?
Vladimir Putin: Well, the hawk is a good bird.
Konstantin Ernst: But you are certainly no dove.
Vladimir Putin: I am a man and I do not like clichés. Our foreign policy, in the past and today, was thought-out and aimed at creating a favorable environment for Russia’s development. This means we want to have friendly relations with all of our partners. Naturally, we have and always will defend our national interests but we have always been regardful of others when we did it and we plan to maintain that in the future. In case of a disagreement or a conflict, we will always look for a compromise that would be acceptable both to our partners and our country. We are not interested in confrontation. On the contrary, we are interested in cooperation. We want our countries to join their efforts. There is something I often say. In fact, it is not just me; our European partners and friends say the same thing. I have very many good friends in Europe – some of them used to hold top positions in their countries, others are still doing that. They say themselves that, without Russia, Europe has no stable future.
Europe is not just a geographical concept. First and foremost, it is a cultural concept. We share the same values with Europe. Of course, those are mostly Christian values, but it goes beyond that. Even those who consider themselves atheists were raised on Christian values. But Russia is a multi-faith country. We have many Muslims in Russia as well; we have Judaism; we have [Buddhism], our fourth traditional religion. Our history, our culture and traditions make it easy for us to develop harmonious relations with any country of the world. And this is exactly what we are going to do.
Vladimir Kulistikov: Mr. Putin, you mentioned friends in Europe. Indeed, you have excellent relationships with many world leaders. But this seems to be Russia’s only achievement in foreign affairs. What we see today is that some are trying to strip Russia of its leading role, of its status as a great power. We see this happening at international conferences where we are not even invited to sit on the platform. They give us a seat somewhere in the second row. Before we know it, they will move us to the balcony. Also, they have diluted the G8, turning it into G20 – all because they want to dissolve this inconvenient vitamin, or a ferment, called Russia. In fact, you know, this even has a negative effect on domestic affairs, because our people are accustomed to living in a great country. Psychologically, they are not ready to live in a second-rate country that plays soccer with Andorra. Do you agree that other countries have these dangerous plans regarding Russia? And if you agree that the danger is there, how will you resist these tendencies?
Vladimir Putin: First of all, I would warn you not to disdain anybody, including small countries. It is unacceptable for us to disdain Andorra or any other small country. I have been learning martial arts all my life, and I have developed a kind of philosophy: respect your opponent no matter who he is. You should do that, first, for ethical reasons, but there are pragmatic reasons as well. If you think that people around you are small fry that you can safely ignore, all of a sudden you may take a punch, and a very painful one at that. Anyway, it’s always better to respect your partners regardless of their territory, their economic power or the condition of their economy.
You may remember how China was in a devastated condition just recently, during the Cultural Revolution. And now, after a short time, what has become of China? In the early 1990s, many started treating Russia with disdain, but intelligent politicians who think about the future have always respected us. I know those people by name, and I am very grateful to them, because they also made me feel more confident. This is how we should think and act. As for those who would like to strip Russia of its leading role, they are wrong: Russia is not the kind of country you can treat like that. On the other hand, we are not imposing: if we are not welcome, we don’t insist. Why should we? Our top priority is to help our country develop and improve the living standards of our people. That’s what matters the most to us. Once we have that, once we have a stable political situation and an effective developing economy, once the growth rate of our economy makes it possible for us to boost our defense and ensure our security, we will automatically acquire such a status and such a standing in the world that it will be the opposite situation:they will keep inviting us and we will be thinking whether we want to accept the invitation or turn it down.
But, of course, there is a lot we should do – like I said, primarily in the economy and in society. But the same is true of foreign affairs: we should always feel confident and understand what our national interests are. I agree, Russia is a country that simply cannot exist any other way. Our people have a special mindset. But I repeat: it would be a big mistake if we put on the robe of a superpower and start dictating terms to others over matters that have nothing to do with us. Of course, if a certain matter affects our interests, we will definitely fight to the end. But there is no need for us to pose as a world policeman. If somebody likes that role, let them do it. We all know what is happening in the world today. We all can connect the dots. I think nothing will come out of it except damage for those countries.
Vladimir Kulistikov: I accept your criticism about disdaining little ones. From now on, I will respect the executives of minor channels as much as I respect Mr. Ernst and Mr. Dobrodeyev.
I have another question for you though. Let us take the Arab world. Russia, formerly known as the Russian Empire, then as the Soviet Union and now as the Russian Federation, has traditionally held a very strong position in this region. Today a series of revolutions shook the Arab countries. It may be true that some of those countries were ruled by sons of bitches, as they say, but those were our sons of bitches! And now Russia’s position in the region has been undermined and we are no longer welcome there. What is your take on the recent Arab revolutions and what do you think are Russia’s prospects in this region?
Vladimir Putin: You are right, this is a region Russia is traditionally interested in and has stable and deep-rooted connections with. There are certain political and economic forces in many of these countries that favor the development of cooperation with Russia. But what is going on there today is not new. Take the Egypt of a few decades ago. Don’t you remember a similar phase in its relations with the Soviet Union, when a period of renaissance was followed by an abrupt turn towards the West and the United States on the part of Egypt? We have seen it all.
Oleg Dobrodeyev: A personal question, Mr. Putin. It is no secret that many Russians saw the past several years as a period of political uncertainty. In Russia, political uncertainly always stirs up the elite. There were rumors of discord in the tandem. People – officials, in any case – started to speculate. Did you experience any personal disappointments in this period? This is the first question.
Secondly, over that period, did you ever feel like some of the people close to you, perhaps someone that you have brought to power, had stopped to consider your interests? Maybe even lost their respect for you?
Vladimir Putin: So what you’re saying is that while being president I inspired a certain attitude towards me, but as soon my term was over this attitude changed – is that right?
Well, thank you very much for this feedback. But I do get the question. You know, in the so-called elite circles there are always some people who are willing to, pardon my French, swindle and muddy things up, and try to fish in the muddy waters hoping for some gain, for some extra fish probably. But I cannot say that such things were anything like prominent or serious. And all the more so, there was nothing like that among my colleagues, my closest circles, there was no decline in the degree of respect or personal attitude, nothing like that. But I firmly believe that the most important thing for politicians today is not their official rank, but the trust of the people. That is the reason I am here today. It is the basis, the foundation that I was able to use to make my work efficient, and I do believe the Russian government’s work was quite efficient over that period, despite the crisis. The people’s trust allowed me to work comfortably. My team felt it as well and I am very grateful to Russians for this support. It was not always brash, sometimes quiet, but very clearly voiced. I felt that support and I am very grateful for it. This, by the way, allowed to implement quite a consistent and, let me say it again, largely efficient anti-crisis policy. Yes, many things could have been done differently, some things could have been more efficient, but on the whole our response was much more efficient and timely than that of other countries. We succeeded in more than just saving some individual businesses; we managed to save entire industries which were on the verge of collapsing – among them the automotive industry, financial and banking systems. We averted the possibility of a new 1998 crisis when people lost their entire lives’ savings in one instant. I promised that we won’t allow this to happen, and we kept it from happening. We achieved the recovery of the labor market bringing it up to the pre-crisis level. Even better than that, our unemployment rates today are lower than before the crisis. Yes, there were some negative issues and aspects to this, too, but in general we’ve done a good job on the labor market and our responses were quite fast and timely. I’d like to point out once again, this is all in terms of the average man’s perspective. Given this, I cannot really say…
Remark: But what about the elite?
Vladimir Putin: They are very important, but let me reiterate that the elite felt that support and that was decisively important.
Vladimir Kulistikov: Mr. Putin, you just mentioned the economy and the crisis. It looks like there is another storm brewing: stock markets are tumbling, and people say there is only so much the traders themselves can do about it. Emerging markets are losing capital. The same is true about Russia. I recently read an article that said the government needed a new program to counter the next crisis. A program that would be like a good skirt on a girl: short and offering an attractive perspective. Supposedly, that would help win back businesses’ trust and stop the crisis. Does your government have such a program? And while we are at it, since our budget is calculated presuming the price of oil would be at least $100 a barrel and oil prices are falling, are you going to revise the budget?
Vladimir Putin: You know, if we keep talking about the fall of stock market indexes, they might never recover. Russia will grow by 4% this year, which is satisfactory. China will grow by 9%, which is a good result. We have to push for a 6% to 7% economic growth figure. We managed to deliver that in the pre-crisis years and we will try to do it again, as I have said before.
We will, of course, try to make our economy more open. There are fears, however, especially in the light of Russia’s WTO accession, that opening it too much might harm it. Returning to your metaphor, a short skirt looks good on some women while others are better off wearing something else…
Vladimir Kulistikov: A longer skirt?
Vladimir Putin: Yes, other clothes. From that point of view, I believe we have managed to make ourselves safe from unpleasant surprises as we negotiated on Russia’s WTO accession. Essentially, entire branches of Russia’s economy are going through a long transition period. We will work on making our industries work efficiently in a competitive environment to give Russians access to high-quality goods and services at reasonable prices. That is exactly what we want to achieve by having Russia join the WTO. I will say it again, however: we will only make our final decision when all of the failsafe clauses that we might need to protect our economic interests at one point or another are in place.
My colleagues and I see these threats very clearly. There are a number of them. They are generated by so-called developed economies. What can I say? Russia turned out to be well-equipped for the 2008-2009 financial crisis. What are we dealing with now? We are carefully following developments in the global economy and the word's largest markets. Clearly, our economy is not sufficiently diversified at the moment. We say that openly to feel more confident. The problem is, when Western countries' markets shrink, we sell less goods and the prices for our goods fall. That is taking into account that only 4 to 7 Russian industries are represented well on those markets, therefore we are dealt a heavy blow: if we had 50 to 100 industries represented, the situation would be more balanced and we would be able to switch to a floating currency rate. Until that happens, our national bank will be forced to somewhat regulate rates. Generally speaking, therefore, we will only be able to say we are ready for any changed in internal trends after our economy is diversified.
Some things are going better for us now than they were in late 2008, some are going worse. First, here is what is going worse. I will say that the recent crisis has forced us to burn through some of our resources and reserves. Nevertheless, we are planning to have more reserves this year. We will bring the government’s reserve fund to 1.7 and the national welfare fund to approximately 2.8 trillion. There are these two funds; then, there are the National Bank's currency reserves which amount to $550 billion. As you can see, we have quite a sizable safety cushion. The government's reserves are not quite as plentiful as they were before the past crisis. We have to keep that in mind.
Now, what is going better?We have worked out cooperation mechanisms; we know what to do in situations of this sort. We have worked out the mechanisms and amended the legal framework. Now we will not even have to go to parliament if we decide to undertake certain measures. We know what instruments we have to use to stabilize the finance system, some of the industry segments and the social sphere. That is, obviously, a good thing. Taking into account the reserves we have and our experience of going through the 2008-2010 crisis, I would say I am sure we are ready to handle any problems that might come up.
The budget was indeed based on the assumption that oil prices will stay at least at $100 per barrel. We are largely dependent on oil: over 40% of Russia's income comes from oil and gas. At the same time, over two thirds of our additional income this year came come from the same source, which indicates that the economy is, after all changing its structure and going the way we wanted it to go. The budget for next year is based on $100 a barrel, but let us not forget that the average oil price this year was $110. We do not think that oil prices would drop dramatically next year, but still, we took our estimation down to $100, I would call that a pragmatic move. Even if it goes down to, say, $95, we would not have to borrow too much and stress our finance system.
Returning to this year's additional revenue, we are planning to spend over 320 billion to cover the budget deficit, therefore we will not be borrowing more at the global market, which means this money will remain in Russian financial institution and in the country’s economy. This is a very important positive factor. By the way, the inflation rate of 4.7% that we have today is the lowest in the history of modern Russia. Yes, most of our spending will be made late in the year (late October, November, December) and inflation will grow but I think the overall figure at the end of the year will still be the lowest in Russia's history.
Vladimir Kulistikov: Colleagues, I beg your pardon for coming up with this question but if I fail to ask it, the shareholders will dismiss me.
Mr. Putin, Gazprom has been facing certain problems in Western Europe: the German offices of Gazprom have been searched. What is your take on a situation like this around one of our major companies?
Vladimir Putin: It’s quite simple. I have repeatedly said in public that the sellers are always trying to sell the commodity at a higher price and the buyers always want to get it cheaper, or even free, what is still better, for nothing as we say. You won’t get anything for free, naturally, but at a smaller price – yes, and that is what they are after.And as a result unilateral decisions are taken – the Third Energy Package, for example, which was adopted retrospectively. This is unprecedented. This should be considered unacceptable in the modern world, but it is done despite all considerations. We think the ultimate goal behind this course of action is to bring down the cost of the product and to disrupt the market pricing mechanism which is closely connected with the price for crude in Russia. It is we who set the price in a centralized manner, we depend on crude: the crude goes up – the natural gas price goes up, the crude drops – so does the gas price. I don’t think this is a farsighted approach to pricing because today the price for crude may be fairly high and tomorrow it may plummet – and Gazprom will be suffering losses and the buyers, on the contrary, will be benefited. I don’t think this is justifiable. Besides, the natural gas market is very specific, it largely depends on a concrete supplier. It is a mistake to introduce a third party in the process, as our partners suggest, or a third buyer and a third seller… This is to say, the Russian gas that has reached the border with Western Europe should be first sold to a third party, a legal entity that will further sell it to the consumers. Do you know what this scenario can lead to? Someone will simply be given an opportunity to pocket additional margin. The price will not necessarily go down. This is first.
The second change provides for differentiation between the owner of the pipeline gas transmission system and the owner of the product itself. Under this provision, owners will be compelled to part with the gas transmission systems! The question has already been popped in some Baltic states where the national governments are trying to take away what belongs to us and our German partners by law, and was made our property by an act of purchase. What implications can all this have for the gas sector? When there is no unified structure that produces natural gas and then distributes it, when it is separated from the gas transmission system, the latter may degrade because, taken separately, it tends to be loss-making today. Or the pumping tariffs will have to be increased dramatically, which will inevitably result in a price growth for the end buyer of the gas or the total degeneration of the entire gas transmission system.
Can we lower the price of natural gas for the European consumer and at the same time supply it under long-term contracts? We certainly can. What should be done? We should eliminate the intermediaries we have today. No one should come between us and our European partners, the big companies that purchase our gas and supply it to their own power plants, avoiding any margin at this stage.If Gazprom supplies natural gas directly to the power plants, there will be no intermediaries, no additional margin, the product cost will decrease. If Gazprom deals directly with the end buyer, this can eliminate the rest of the intermediaries. There is another component to be taken into consideration as well – the social tax burden on the energy resources including our gas is enormous, the tax goes to the budgets of our partners. Who makes them stick to such high taxation rates? They should bring the tax down. It is unfair that we should be the only party that pays the bill. All these urgent issues are on our current agenda, and no matter how acute and complicated they may seem I hope we will be able to reach an agreement on these problems in the course of a partners’ dialogue.
Konstantin Ernst: Mr. President, returning to the elections, do you think your project, the Popular Front, will help United Russia win?
Vladimir Putin: You understand, of course, that I want United Russia to win at the elections. First of all, the party is headed by the incumbent president. If voters voice their approval of our suggestion on how power should be configured in Russia it would allow us to create a stable and capable government headed by Dmitry Medvedev. Secondly, the goal we had in mind when we created the Popular Front was not only to make United Russia stronger, although it is very important as we need an adequate parliament. It is extremely important, but so are other things. We need to enable democratic elements, to let people feel they are connected to the administration. Since the times of Peter the Great we have been used to putting patterns of Western goods in display and pointing our fingers at them, encouraging people to follow the example of the West. There is a positive but also a negative side to this – we can’t go on doing this and saying that everything is always much better over there, because it may lead us into a trap and we will commit errors. In this sense, if we talk about democratic developments, we should admit that the West is going through an economic crisis that has evolved to a political crisis today. Many Western experts say that the West is facing a crisis of power and public distrust of the multiparty system installed there. They say that this multiparty Western parliamentary democracy cannot produce politicians that would enjoy the trust of the overwhelming majority of their citizens. The Russian Popular Front, the preliminary elections among most noteworthy people there, these are the instruments that I think should work towards expanding the democratic element in Russia’s governance – it is a real, direct-vote democracy and I think, generally, it will help make Russia’s political system stronger.
Oleg Dobrodeyev: One more question on the same subject Konstantin asked about. Do you foresee any possible complications for United Russia in this election campaign? There is slightly less than eight weeks to go, and the campaign looks completely different from those in 2003 or 2007. Upon President Medvedev’s initiative some significant adjustments have been made to liberalize the electoral law. The State Duma ballot threshold was brought down, and more importantly, the law ensuring equal access of parties to mass-media has come in force. As a result, political competition – or, at the very least, what we can see now on TV screens – has grown much tougher than before.Is this current situation that has come about now in any way likely to make it harder for United Russia to get those Duma seats it was counting on getting?
Vladimir Putin: On the whole I’d say yes, it will be harder now. The competition is escalating, and in general this is rather good news than bad news. The only question that remains is how exactly we should be developing these democratic institutions. We should always be on the lookout for the best ways. We should consider, for instance, whether we really need to have 10–15 parties represented in the parliament.Another question is – should we, perhaps, remove the ballot threshold altogether, or rather keep it? In this respect, we know what’s going on in the neighboring state of Ukraine. Are we interested in our parliament taking up the Ukrainian model which makes it practically impossible to run a constructive discussion? Let’s take a look at the United States – they have many parties represented and no ballot threshold, right? Yet in addition, they have a number of tools ensuring that only two major parties make it to the Congress, and it all starts with a very tough competition inside these parties at the initial stage. And that’s where democracy is indeed working and developing, and this kind of primary election is one of its tools. It ensures that only the most efficient and popular candidates get nominated to compete against each other. And the same thing happens further on in the houses of parliament.
Our political system is still evolving. We shall avoid any voluntary decision-making. We shall maintain the dialogue with the society, with general public. We shall look for ways and formats to make our political system sustainable. This is one of my priority tasks – I mean of course that’s if people vote for me. As for the government, if the voting goes smoothly and people support United Russia’s list of candidates with Dmitry Medvedev’s at its top, we shall be able to set up a competent government. One of our tasks is to develop a sustainable political system which would develop further based on its own foundational principles rather than on advice and criticism from abroad. There is no way our country can be a satellite state. We are in need of a stable, sustainable political system which would be up-to-date, flexible, and capable of standing up to the challenges of the present day while leaning on our national traditions. There is no way we can do the same as some of the countries of the so-called Eastern bloc, Soviet bloc, the Warsaw Pact countries of which I know that they cannot even have a defense minister or a chief of general staff appointed without prior consultation with foreign officials. That’s no way for us. But in order to preserve our independency and sovereignty we need to have both an efficiently developing economy and a sustainable political system – and the latter can only be sustainable if people feel that they have a real say on the formation of government authorities, I mean here both formation and their policies as well. And we surely need to define the optimal political structures and mechanisms of formation of government authorities. We shall see how efficient the tools proposed by President Medvedev will prove to be. Just to make it clear, we’re working on it together. But of course as the president Dmitry Medvedev has a final say on these matters, and I respect that. These decisions have been made and will be implemented, they will work. And we shall see all together – I mean here both United Russia and Russian Popular Front – we shall see how they will be working out. If necessary we’ll make relevant adjustments.
Oleg Dobrodeyev: What would be a good percentage for United Russia in these elections?
Vladimir Putin: You are trying to get a political forecast out of me.
Oleg Dobrodeyev:I am not asking for any numbers. I just asked you what result you would be satisfied with.
Vladimir Putin: United Russia has to remain the leading political party in the country and the Parliament. That would be a good result.
Konstantin Ernst: Thank you very much for this talk, Mr. Putin. I believe we are finished for today. Good luck to you.
Vladimir Putin: Thank you.