#11 - JRL 8022
TITLE:
PRESS CONFERENCE ON POSSIBLE AGENDA FOR VLADIMIR PUTIN'S SECOND PRESIDENCY WITH VALERY KHOMYAKOV, IOSIF DISKIN AND SERGEI MARKOV, OFFICIALS OF THE COUNCIL FOR NATIONAL STRATEGY
[INTERFAX, 14:00, JANUARY 15, 2004]
SOURCE: FEDERAL NEWS SERVICE (http://www.fednews.ru/)

Moderator: Dear colleagues, we have before us a panel of specialists who have promised to speak to us on a very interesting issue. We will give the floor to our guests and then we will open it up for questions and answers.

Khomyakov: Indeed, the material we are presenting to you today is the result of a laborious process that has lasted five or six months. And of all the reports published by the Council for National Strategy this is the only one that has the words "national strategy" in its title. This is very important because the Council for National Strategy was created for this very purpose. The report has been published, you can see it on the web site snsr.ru. It was posted just about an hour ago in its first reading. Obviously, more work on it will be done because many remarks have been made and the drafters will take them into account. So, the report will still be the subject of revisions, but I think that in its present shape it is already publishable.

And another thing I would like to do is to preempt any questions connected with my appointment as director general because our expert and media communities have been spreading speculations, trying to trace it down to some intrigues and behind-the-scenes activities. I must reassure you that the change of leadership has nothing to do with any personal or political matters. So, I think the coverage of this event has been redundant. In fact, I was somewhat surprised by the expert community when I read on one web site that Stanislav Belkovsky no longer suits the Kremlin and so he has been replaced by Khomyakov. This in spite the fact that the last time I visited the Kremlin was for the inauguration of President Putin in 2000. So, it is hard for me to say just how much I suit or do not suit the Kremlin. So, the only reason for the change is Stanislav Belkovsky's personal wish to leave this post.

Diskin: He remains a member of the board.

Khomyakov: Of course, he remains a member of the board, he is a very active participant in the meetings of the Council and in its work. And we have many plans together.

Now I'll speak a little bit about what I am going to do. Of course, the main thing for the Council is to preserve the independence that it enjoys. So, in forming our budget we will definitely take these things into account. Nobody will be allowed to control SNS financially or otherwise. So, I hope that we will draft a very balanced budget to deny anyone a controlling stake. And now we will give the floor to the head of the team that prepared the report, Iosif Diskin.

Diskin: Just one remark. Valery Alexeyevich has been and remains co-chairman of the board. And when somebody expressed concern, in a joking sort of way, that Valery Alexeyevich will concentrate boundless powers in his hands as co-chairman and director general, we said that Valery Alexeyevich is a very different kind of man from Stalin.

Khomyakov: I just don't wear a moustache.

Diskin: Now for matters of substance. As many of you or some of you will remember, when we presented our report on federated relations in the summer we said that the next report would be on the national agenda and we would present it in mid-January. And here we are.

Why do we believe that preparing such a report is so important? We have the election campaign that we have and the presidential candidates that we have. And there are two circumstances. You may remember that even then we titled our report "The Agenda for the Putin Presidency". We had no doubts then and have no doubts now. We believe that the Russian President is the main instrument of reform in our country and we still subscribe to Pushkin's formula which says that "the Russian government is the main European" in our country. And secondly, we believe it is of fundamental importance that the civil society of which we consider ourselves to be a part, should express its wishes and suggestions. In fact, the subtitle of our report is "The Electorate's Mandate to the President". And we are submitting our report to the public so that anyone who wishes could make their comments in whatever form.

We are engaged in a dialogue with the top leadership of the country. This is not a secret text and it has been discussed at various stages. And we would like a position to be formed by the time intensive presidential debates begin. We have not only posted our report on the web site and we have agreed among the members of the Council to send it to the most influential structures, for example, it would be interesting to hear the opinion of the Russian Union of Industrialists and Entrepreneurs, of the Chamber of Commerce and Industry, the houses of parliament and so on. And naturally, the text has already been sent to the president's administration.

We felt that we needed to produce a full-scale text expressing our position on the whole range of strategic problems of the country's development within the framework of a single concept. I am not aware that such a text in our country exists. And since we call ourselves the Council for National Strategy we must deliver such a text. It was quite an effort, but in our view and in the view of those who have read it, we have managed to come up with a broad view.

What have been our findings? The adoption of a national strategy is an urgent imperative. Why? Historical time is compressing. If the country fails to make a strategic breakthrough, a number of problems will arise on the macro-social level, in internal and external politics, and in economics. The historical window of opportunity is receding. This is the first thing that worries us. And we formulate this worry in the text. It has a section on "development imperatives". And the Council has agreed with us that the conclusion from the analysis of these imperatives is very simple. Either there is great Russia, or Russia, as an integral entity, political and geopolitical, disappears from the map of the world. That's how it is. At least that's how our Council sees it. We will conduct further dialogue.

And then the question comes, how to make a thrust? What is to be done? It has become clear that very many things have to be changed in the country. First, it is necessary to revise social views on the fundamental principles of the country's development. What exactly does that mean? We need to re-evaluate social justice. We formulated our approach toward social justice in Russia very clearly and straightforwardly.

We mean of course not egalitarian socialist and communist justice. Unfortunately, for reasons that unclear to everyone here, we cannot proclaim equal opportunities for everyone. Only rich America could do that. It did proclaim them but it did not really fulfill them. And so we came up with the idea that the most important thing now is to think about those who -- the main idea is to increase the number of people who, with the support of the state, will be able to act on their own and expand the category of independent citizens. By the way those who need social guarantees will get more. They will not get support.

Therefore the main social purpose is to increase an independent population in the country. By the way this raises the question of a new social contract that was destroyed in 1991, which includes among other things social responsibility of the rich and of business. The latter should not only build and engage in charitable activities. Its main social responsibility is to be responsible for economic efficiency.

Unless business is included in the social contract, unless business ensures economic efficiency, nothing will happen. But today no one asks that of business. Our complaints about the oligarchs we made in the previous report have been repeated again: there is no new business, efficiency does not grow, there is no entrepreneurial initiative, there is no activity.

The main idea that permeates the report is that the principal resource for the development of the country is social activity. That's the main resource for the development of all modern societies. And Russia must be among them. And then the economy must also be different.

We clearly formulated Russia's place -- I think we were the first to do that because I haven't seen anything like that before -- in the international division of labor. All the previous talk that Russia should become (inaudible) consumer goods, we crossed it out and said, it's senseless because it presupposes such low wages, like those in China, that it was not possible. But there is another role that matches its economic advantages. It's the role of a world technology center where new samples of products are created, where unique products are created.

For example, the construction of nuclear power plants is our business. The creation of a prototype of a product on the basis of fundamental research is our business because a lot of intellectual property has been put into it. Besides, we will make use of fundamental advantages of our education which is not specialized but broad. Specialists like that can translate fundamental research into samples. And then we come to what is done with one's hands, and I think you all remember a relevant anecdote. That's not Russia's business. We can't do that because we don't have such skills, we don't have such facilities, we don't have many things. But we have this. By the way this may change the structure of the national economy and, as our calculations suggest, generate decent growth.

However, this will require a different international disposition. This will require Russia to position itself as a leading Eurasian power that consolidates its brothers around itself, those who want to associate themselves with the development of Russia within the CIS. By the way, for the first time the report states a rather firm position. The international community holds us responsible for everything that happens in the former Soviet Union anyway. No matter what happens, everybody points at Russia. But if you hold us responsible, give us rights to act in this space because there can be no responsibility without rights.

We are not going to proclaim the use of force. But if internationally recognized norms are breached, the use of force must not be ruled out. Read the report. You can find many things that have been formulated for the first time. We formulated our position on interaction with all key international players. In particular we say clearly that we must build a pragmatic partnership with the US and develop an agenda for this partnership. If such an agenda is adopted, no trifles will poison our relations any more because everybody will be busy. And all the rest is less important.

For the first time the report has a big section on democratization. Since Sergei Markov was the inspirer of this section, I think he should speak about it. And quite a lot is said about the responsibility of the state and about how, from our point of view, we should approach the restructuring of the state. We get back to our idea that reforms in Russia should be based on the growing of a new state. When we begin to reform old agencies, we draw them again into the old routine from which they never get out.

Perhaps we should follow the path, which was once used very successfully by Roosevelt, when new agencies with new staff are created, and we must not be afraid of hiring those of new Russians who want to serve the state and thus grow pure and effective elements of state development. Then we will get at least small islands of how this should be done. We will be able to compare and fight for the reform of existing agencies.

The point that runs throughout the report is that the main objective is to tap the country's social resources. Our report makes a rather clear and very stringent assessment of the current situation. There is a section called "The Serpentarium of Russian Elites" that you may find funny. In it we say that -- I think the title speaks for itself -- where we speak about the alienation of people from power, we say that authorities mistrust their own instruments and people.

And then comes a question that everybody asks: how? You say, alienation, weak state, which is largely privatized by oligarchs. How to get out of this? And we clearly say that this has happened many times in the world history and there is only one way out of this. It has been tested before. The calling of a national leader.

Let's recall our own history. When Alexander II called for international mediators as part of his reforms, the cream of Russian society volunteered to become international mediators, including Leo Tolstoy, Ivan Turgenev. It was a hard and strenuous job. It was enough to offer a new justice system and it attracted people -- suffice it to recall Koni who was the moral example for the Russian state for four decades. People came and they served honestly. What is needed is a sincere, honest and persistent call. And the President has to decide whether he is going to be, as he puts it, a hired manager, and then it is hopeless; or he is a national leader with corresponding views and then he uses other instruments of power, ideological influence and so on, and we have included it in our text. And we say that renouncing the mission of a national leader would simply frustrate the expectations of the population because at present the only national capital that can still be relied on is the trust of the population.

By the way, the results of the latest elections confirm our thinking. If you know the recent data, and I am not going to speak about my very own VTsIOM because that would amount to advertising. But even Yuri Levada's service has shown that confidence in the government and the Duma and all the state institutions has dramatically increased after the elections. Confidence in the president has promoted confidence in all the mainstays of Russian society.

It shows that this mode of action is possible as long as you position yourself as a national leader. There is no alternative. This is what the civil society should tell the President and it should be insistent because without it there will be no great Russia. That's by way of preempting the question why we insist on the concept of "great Russia". It is due to a number of circumstances and not because we are borrowing Stolypin's formula, which is not by any means the most interesting part.

By the way, I would like to remind you that if you think about a historical title that would correspond to our state today and its present-day borders, you will immediately reply: yes, it is a great Russia. It need not necessarily be part of the name of the country, but the image of a great Russia harks back to its historical name.

By the way, this brings us to another legacy. I don't know if you have read the great article by Pyotr Struve who responded to Stolypin by saying what he understands by great Russia. And our text contains an express definition of what we mean by great Russia. We mean of course an effective democratic state but also everything else, its culture. And one major problem we would like to raise is that we should dust off the heavily overworked concept of "great Russia". We write in our text that the concept of great Russia which has been tarnished and hackneyed should be restored to its pristine meaning.

Now, in conclusion, I would like to ask you about something. We genuinely wish to initiate a national dialogue on the destinies and prospects for the development of our country. We often say and write that we have a weak civil society. But how can it be strong if it doesn't have a serious problem for profound discussion? Without your help and support -- of those who are gathered here -- it is impossible to start the discussion. We appeal to you not only as professionals, but as citizens: help us to initiate the dialogue. One of the things that sustain a country, at all times, is hope. It is not for nothing that Putin's presidency is described as the presidency of hope... Hope may translate itself into confidence and into dynamic development and social resources.

By the way, the fact that economic development has exceeded the forecasts of the Economy Ministry for the second year in a row, shows that the resources of confidence and the resources of hope are already beginning to work not only in society but also in economy, emerging as a genuine resource of development and of growing prosperity. Help us to make sure that dialogue transforms hope into confidence and development of the country. Thank you.

Khomyakov: You have already provoked Sergei Alexandrovich Markov by your remarks about democratization, which is indeed a major problem discussed in the report. So, Sergei Alexandrovich.

Markov: Thank you. Just a few thoughts. When we speak about great Russia, naturally it is an imperative of people. Whether a great Russia materializes or not, when we say great Russia we don't mean something horrible and frightening, we mean a Russia that is capable of upholding its national interests.

And about the second presidency. The second presidency cannot be understood without the first. Clearly, at first the president's goal was to restore the state institutions which had almost ceased to exist during the chaotic, anarchic, oligarchic capitalism under Boris Yeltsin. First, they were restored, and then structural reforms began. By the way, some pressure on the groups of oligarchs to increase taxes on the mining business, undoubtedly is part of liberal economic reforms. And what has been done has been done in full accordance with the recommendations of the International Monetary Fund and the World Bank which reaffirmed these recommendations year in and year out. But under Yeltsin power didn't have the strength to implement these recommendations. They are simple: higher taxes on the business that exploits natural resources in order to ease the tax burden on other businesses, above all the business connected with high technologies, small and medium business, etc. That is, where the share of added value and skilled labor is high.

Of course, the IMF officials probably did not expect the implementation of their ideas to assume such paradoxical forms. And this is true not only of our beloved country. So, the second stage will continue during the second presidency. That is obvious.

And the result of the second presidency should be stability and development based not only on the personality of the president and not so much on the personality of the president as on stable institutions -- democratic institutions in the political and economic spheres.

So, the main priority for the second term, as we see it, is the creation of stable institutions, rules of the game that would work automatically without manual control, as the authorities often have to do now. And as I see it, this is what the president considers to be his mission.

As for the implementation of this goal, I would like to make several observations.

Iosif Yevgenyevich spoke a lot about the economy, so I will not dwell on that. I will dwell on the political sphere. Firstly, there is the program and the top authorities have this understanding, and increasingly it should be a program of a nation-wide consensus -- it should be a program not of the government but the program of society and of its broad strata. It is precisely for this reason that the authorities pay so much attention to pursuing a dialogue with civil society.

You have all seen the civic forum that was held and within its framework there was about a hundred of concrete and big meetings and negotiating platforms for the authorities and the civil society. You have all seen then the Russian forum which took place in Togliatti and Nizhny Novgorod, and we now embark on preparing the next Russian forum to be attended also by representatives of civil society and the authorities.

And this report is our modest contribution to the development of a dialogue between the authorities and the civil society for the purpose of putting together a program for the development of the country on the basis of a nation-wide consensus.

And now the second thought connected with politics. It is about democracy. You see, the authorities often cannot always say something clearly and directly because people will find fault with them and pose hindrances and so on. As free analysts, we have the possibility of expressing ourselves more clearly. You know that the political system now existing in our country is being called "managed democracy" as a certain combination of democratic institutions where they work with the addition of non-democratic institutions where there are no democratic institutions but it is necessary to work and accomplish something.

In my opinion, this is an absolutely necessary and unavoidable stage of transition from Yeltsinite chaos to a normally consolidated democracy. However, the parliamentary elections have spotlighted new problems here. So far, we proceeded from the assumption that the transition from managed democracy to a normal democracy of European type will be carried out in a natural way, simply because stability will lead to economic growth, and economic growth will lead to higher standards of living, to a greater civic activity -- and this naturally will lead to the strengthening of democratic institutions.

In the unfolding parliamentary campaign and the response from the population we have seen that this automatism is not quite correct. Indeed, it appeared that where the managed democracy is left to its own devices, there begins to operate a mechanism which I to myself call the "self-winding spiral of hyperloyalty", when simple wishes from the top, when they reach the bottom, turn into a semi-military discipline and this is an alarming process.

In this way, the conclusion that we can draw from the election campaign is that in order to assure an obvious trend of transition from governed democracies to a normal, consolidated and pluralistic democracy, we must establish and switch on special mechanisms of a developing democracy. That means the need for special actions of the authorities. We cannot wait till the stability and the growing standard of living will automatically raise the level of democracy in society -- there is the need for special mechanisms.

Today such special mechanisms may probably be found in stimulating more vigorously the development of civil society and a higher level of pluralism on federal TV channels. So, we regard as another task the conscious raising of the level of democracy in society by incorporating such mechanisms of a developing democracy.

There is yet another important political problem. Here with our colleagues we all agree that the president should gradually pass over from understanding his function as the function of a manager over to political leadership. But this includes not only a political dialogue with different groups and the civil society -- it also includes the need to form a political force which is especially necessary to carry out an administrative reform. We are perfectly aware of the overall logic: the administrative reform as a reform of bureaucracy cannot be carried out by bureaucracy itself. How will this political force be formed is yet unclear.

We understand that one such agent is United Russia but at the same time I think that practically all professionals are already in politics and we know not only all the virtues but also the numerous shortcomings of United Russia. We see that United Russia is not so much a reality as it is opportunity; it is a certain form that can be filled with the most different content. United Russia is largely a reflection of the popularity of the President; so far it is a mechanism which is not independent within the framework of parliament. Within the framework of United Russia itself a political force may be established as a certain client for these reforms and it may be a failure.

Thus it is yet not quite clear in what forms this political force, the leader of reforming will be established, including reforming in the direction of democracy. But the discussion will now be getting increasingly intensive and within several months, I think, that we will see the results of that discussion.

And now a few words again about a political question. When I am reflecting on the drastic changes faced by society, it seems to me that it is a new impulse to the development and renewal of the elites, for renewing the sense of million of the top authorities and for engaging in a dialogue. Today one of the key points is the rebirth of morality in our society.

We must admit this ideological chaos that existed in our society. When people say they want order, they have in mind not only the corrupt authorities, not only strong police capable of defending people against bandits. By order, they have in mind the division between good and evil.

It seems to me that gradually this "breaking apart" is becoming a third main break in Russian society. The first break or rift was between the adherence of democratization on the one hand and the CPSU apparatus, geared to continue the monopoly of the communist party -- it is one break. The second break was between the supporters of strengthening of the state and adherence of oligarchical Yeltsinite capitalism. And the third break which is being gradually managed it between adherence of the rebirth of morality, the idea of duty before your country, expressed in the famous formula of President Kennedy: "Ask not what your country can do for you. Ask what you can do for your country," on the one hand, and on the other, it is the notions of Yeltsin's old elite, confident that those who have power and money and the wish, are allowed to do anything. This is according to the celebrated formula by Dostoyevsky: If there is no God, anything is permitted."

So, a kind of a second line is formed, namely that God there is and that he strictly calls to account those who govern the country and who constitute the elite.

Now a few words about foreign policy. Is my time up? There are several areas. Firstly it is Russia -- US. It seems to me that obviously, on the one hand, there is the global common interest, the struggle with international terrorism. On the other hand, in light of the unfolding election campaign in the United States, George Bush's opponents have openly staked on criticizing Bush by discrediting Putin.

And over a short term, we will witness in the United States the toughest attack on Putin in order to sink Bush. We will soon see a fierce attack on Putin in the US in an attempt to destroy Bush. They will try to discredit Bush as much as possible.

The second point is the EU. Unfortunately, the number of unsolved problems is growing there as is irritation on both sides. So far this irrigation has been contained. I am waiting with alarm for this irritation in relationships to burst open because there is a big area of contradictions.

I think the solution is obvious. We must minimize our interaction with European bureaucracy, which has shown its inability to cooperate with Russia, and to increase our interaction with European integration leaders -- France and Germany -- and with partly skeptical leaders such as Britain, Italy and perhaps Poland.

The third point is the CIS. There are several aspects involved here. First, I think the CIS will act as a catalyst for conflicts between Russia, on the one hand, and the US and the EU, on the other. Numerous meetings recently showed that approaches differ, basically they are diametrically opposite to what is happening in the CIS. We think that our development is not possible without the closest cooperation and integration with our neighbors in the CIS, but many elites in the US and Europe consider our integration with neighbors imperial ambitions.

It is not clear yet how we are going to overcome this contradiction. As we have already seen, there are big problems connected with the interpretation of events in Moldova and Georgia, and there will be problems with the interpretation of events in Ukraine and the CIS. There will be attempts to repeat the Georgian scenario for a semi-soft overthrow of power in Moldova, Ukraine and Kazakhstan. And this will stir up old processes.

And the last thing about the CIS. I think integration processes show that there is development in the Byelorussia but a very slow one. Very slow. And yet it's something. It's almost stagnation. As for Ukraine, we will have to wait for the Ukrainian elite to understand that it takes time to join the EU. Until then it will be difficult to build an understanding because they have obvious contradictions.

And now a new area of integration is emerging. I am talking about integration with Kazakhstan. We see that Kazakhstan is a dynamically developing country, the most dynamic one among ex-Soviet republics. Economic reforms in Kazakhstan have gone far ahead of reforms in many other countries. Kazakhstan is beginning to discuss political reforms, which creates an excellent opportunity for enhanced integration in this area. I think I will stop here.

Khomyakov: I will take just a few more minutes of your time to talk about an issue that worries that that was thoroughly explored in the report. I am talking about the party political system that changed after the elections.

What did we have before the elections? For about 10 years there was a rather strong left-wing flank represented by the Communist Party, and there was the right-wing flank, not as well organized but still it led reforms with all their strong and weak points, and there was an extremely weak center.

Now the situation has changed. Both flanks are gone. In the center we have a huge and unclear, as Sergei Alexandrovich pointed out quite correctly, sack where anything can be put, any ideas. This is why it worries us. Moreover, we are worried by the fact that the opposition was basically crushed in the last four years. There is no opposition any more, and we think it very dangerous, including in terms of implementing the ideas stated in our report.

I think it is wrong to conduct a dialogue with society without taking into account views that differ from those in the corridors of power. And we find it disturbing. We also find it disturbing, and say it in the report, that mass media have been monopolized by both government structures and financial and industrial groups. Very serious and negative changes have occurred. You can find all this in the report if you read it carefully. And we are also worried by the lack of different thoughts on federal television channels, as Sergei said.

Q: You stopped your foreign policy review with the CIS. Could you extend it to the east and particularly to Iran?

Markov: Well, just a few words. I think Iran is a strong, powerful and dynamic country that is developing not only economically but also socially and politically, we all see that Iran is going through restructuring. We hope that this process will end as Gorbachev's perestroika ended, relatively speaking in a Chinese way, and that it will open up the country and will not create big problems.

We welcome the fact that Iran could forge a dialogue with IAEA. I would say that disarmament in this case will translate into real development of Iran. Actually we are quite optimistic about our relationship with Iran. Iran belongs to the countries that are a huge potential market for Russian goods and high technology because Russian companies don't face the severe counteraction from competitors as they often face in the area of American interests.

We know that some Latin American countries conducted negotiations on the purchase of Russian planes and trucks, but these negotiations were blocked by American lobbyists. Greece and Cyprus also wanted to buy Russian weapons but the US blocks their negotiations too. But there will be no blocking in Iran. Besides that, Iran is one of the countries that need goods, let's say a tractor, not so much to have a comfortable driver's seat, something that French and American companies can do much better than others, as to be efficient and cheap. That's the kind of commodities Russia can make and offer.

Finally, we will hope that further developments in Iran and its relations with other countries will lead to the removal of the blockade on the construction of nuclear power plants, that is the development of peaceful nuclear technology, and other major high- tech projects. Therefore Iran is a very promising country in terms of economic cooperation, but it is necessary that Iran interacts with the international community. And we have seen such cooperation on the part of Iran.

I was greatly alarmed by the latest events in Iran connected with a parliamentary election crisis. It's a classical crisis between the supporters of gradual liberation and those who want the previous tough regime, that is well described in all textbooks, to continue. We will all hope that this crisis will not lead to a crushing victory of one side but to a compromise between the sides and to further development toward gradual liberalization.

Q: A question to Sergei Markov. Don't you think that if United Russia has no external system of counterbalances (inaudible)... the Communist Party yields to the Kremlin's pressure... is also controllable because if there is no competition (inaudible)...

Markov: First of all I fully agree that competition is always stagnation and death (sic!). Of course we are interested in competition. That is why competition should be stimulating, including ideological and political competition. Therefore, the authorities should be interested in the creation of a coherent and reasonable opposition which, instead of creating the impression of activity, would create some real sets of ideas and programs.

Honestly, I do not understand why these programs should come from the Council for National Strategy and not from political parties, which should be their main job. So, such competition is necessary. And I would like you to know that Putin is in favor of the formation of strong political parties, and just one party. I am drawing your attention to this because the new law on elections that will govern the next parliamentary election will mean that if, for example, only two parties clear the five percent hurdle, it would mean --

Diskin: No, seven percent.

Markov: Yes, 7 percent. It would mean that other parties which haven't made the 7 percent, will also be in parliament. But this has been done to enable the parties to compete.

The second large area is a substantive discussion on the main ideas that the government is implementing. As we know by looking at present-day Germany discussion can be not only between parties, but also within a party. We know instances of such development in Germany in the 1950s-1960s when there were real discussions going on between the factions within the Christian Democratic Party, Christian Democratic Union on one hand, and on the other hand, such real discussions were conducted between factions within the Christian Democratic Party of Italy, and such a discussion was taking place between the factions of the Liberal Democratic Party in Japan.

So, the system when real ideological and political pluralism is practiced by powerful parties which have the trust of the authorities -- that is a traditional, one might say a classic European system and it is highly effective, as we can see in Germany which has successfully passed on from struggle between factions inside parties to real competition between parties, something we can congratulate it on. And we would like to see our country evolve in that direction.

Diskin: Just a couple of words. I would go along with Sergei when he says that one should not assume a formal approach. The collapse of the right-wing parties was in many ways the result of their ideological collapse. The Russian business for whose sake these parties seemed to have been created in the first place failed to support them in the election. It failed to support the line for tough confrontation with the incumbent leadership. Business seeks a dialogue and the parties that represent its interests had a very anti-establishment election program. Which is very odd... A very odd way to represent the interests.

Secondly, there is a wide gap between those ideologies that are represented in the media -- and I am speaking now as a professional sociologist -- and the ideological thinking of the mass of the people in the country. If you put certain ideas in the ideological framework we must admit that these ideas are on the conservative side. But they are conservative not in the communist sense of yesterday, but in the traditional Western sense, which is spectacular progress compared with the former traditional Russian society.

So, these ideas should be given an ideological shape. We need a civilized conservative strategy and a conservative ideology presented in a modern ideological context. And now read out program.

Khomyakov: I have a brief remark. Vladimir Vladimirovich Putin really seems to care about a multi-party system because he is a man who practices what he preaches. But if he has to show concern it shouldn't be token. If the president came to the congress of one party represented in the State Duma at the time, he might have done the same with regard to other parties and attend a congress of the CPRF, a congress of SPS, Yabloko, etc.

Diskin: Then everybody would get into the Duma.

Khomyakov: That is beside the point. I don't know what sort of welcome he would have got there, but it would certainly be a more credible show of concern for a multi-party system.

Q: If I understood you correctly, the report was already discussed at a certain stage with --

Khomyakov: It was not discussed, it has been adopted in the first reading.

Q: Has been discussed at the Kremlin. With somebody. Okay. This is my question. Can you tell me what was the initial reaction to the ideas contained in this report, above all the idea of a Great Russia with a national leader. What has been the signal from the Kremlin?

Diskin: Well, not to run ahead of ourselves, a very keen dialogue is under way. A very difficult and very acute dialogue. Why is it acute? Above all because they were not quite prepared for such a comprehensive document and they needed additional time to form an idea of it. This is not a routine situation. This is not a memorandum on the development, for example, of heavy industry.

Khomyakov: It is not seven pages.

Diskin: Yes, not seven pages but 45.

Khomyakov: Difficult to read.

Diskin: There were some things that grabbed immediate attention. For example, the new concept of social justice. We were immediately told, guys, this should be looked into because a state cannot exist in which all the social strata including the oligarchs who have engineered all this, recognize that there is no social justice. This was immediately accepted as a topic for discussion.

It is not the first time that the issue of a Great Russia has been raised. It was first raised when United Russia was set up. In fact, one of the suggested names for the party was Great Russia. At the time it was rejected because the patriotic wave was not the business of United Russia. The patriotic wave is an obvious drift and United Russia won as a patriotic party, as revealed by all the opinion polls. And if you take United Russia, Motherland or the LDPR with its rather dubious ideas of patriotism -- as the saying goes, God rid me of friends, and I will get rid of my enemies myself -- if you look at all the parties across the political spectrum, including the CPRF, obviously that the dominant theme in Russian public consciousness is patriotism.

I don't think a national leader -- and we insist on there being a national leader -- can be credible without meeting the challenge of his society, his country. When we say Great Russia it means above all a country that upholds its interests. But the interests have to be articulated for the benefits of the people who should be educated through a dialogue to explain to them that there are real interests and there are phobias and hangovers of a long gone era.

So, adopting the term "Great Russia" is laden with implications. Our Council had a sharp discussion on this topic and we had to remind our colleagues that we gathered to discuss a national strategy. And the very notion of "national strategy" is not the strategy of Russia. These are different things. The assumption is that there is a nation, a nation state. But there are certain interests which do not coincide and so it is the talk about the interests of not only today but the interests of future generations and that it is the talk about a mission.

There is so much behind the notion. So, the adoption of the words "great Russia" involves so many things and that is why we decided to raise the matter in stark, black and white terms. Ladies and gentlemen, either we are talking about a national strategy and if you accept the words "great Russia", you thus assume responsibility for a certain vector of national development.

So, it is clear that this is a question that cannot be accepted by those people with whom we conduct a dialogue, we are not conducting a dialogue with one man. It is a question that will have to be answered by the national leader in person, not a manager but a national leader. There are many things expected to happen in the discussion of this topic.

And once again I appeal to you, colleagues: please, help. It is no joke. We are talking about a serious historic challenge to the country. You may not agree with our understanding, a different understanding, but the country needs a national dialogue. Once together with you we conducted a broad national dialogue on the role of oligarchy in Russia. And incidentally the dialogue strongly changed many things in our country.

Given all the attendant costs, and I believe that Khodorkovsky's arrest is an attendant problem, and there may be judicial hearings but it does not mean that it is necessary to keep the person in prison. We will be using all possibilities open to us to persuade the authorities that it is time to put an end to the existence of "attendant costs". Now the time has come for a national dialogue on a much wider range of issues. The presidential election is just around the corner, and the nation faces the question of whether President Putin will get a second term and will the second term become the beginning of movement down a long strategic journey of Russia's development. The time of restoring the Russian state is over. The need now is for establishing an effective state capable of leading the country forward.

Markov: I would now like to make a remark on a different topic. Without a doubt of late the Foreign Ministry has scored great success and has been working dynamically in a situation of limited resources, as is also the case with Defense Ministry. Despite the criticism unfolding in the media, indeed very much has been done if we compare this with the horror that has been. The situation remains very bad in the army still but the desire to do something is obvious. And that is why I would urge the journalists and the public opinion to take a closer look and to heed more attentively what the Defense Minister says. He is not engaged in a personal public relations stunt, he is actually reflecting certain real things that have occurred.

Talking about Gref's Ministry of Economic Development, indeed, it has huge work lying ahead for it. Tremendous work has been accomplished but of late there has been some clear slowing down. Why is that slow down -- it is probably due to excessive ideological content and lack of pragmatism. Something must be changed here.

And there is one thing which I have to say about the Central Bank. It is terrible what it is doing with the ruble and I think it is wrong. It is now obvious that the Americans are conducting a correct policy of stimulating economic growth. China is pursuing a correct policy. Maybe the Central Bank only wishes to drive the Russian economy into a stagnation similar to the Japanese? Maybe it is its goal?

Diskin: Complex problems are involved here.

Markov: Well, okay.

Diskin: The Central Bank in Russia is responsible for inflation. And our beloved Alexei Kudrin is responsible for the thing you say. Regrettably, the reproaches belong elsewhere.

Markov: No, we will not argue, Iosif Yevgenyevich. And in my opinion, this is the primary responsibility of the Central Bank because it is the principal player on the market. I regard as obvious the idea of the need for a more accurate regulation of the rate of the ruble so that it would not cause, by its heavy weight, the bogging down of the Russian economy but rather should help it to get upwards, to a lighter state.

Q: Slightly away from the topic, how many presidential contenders will compete on the finishing leg of the journey? And then there is the need to collect two million signatures --

Markov: I think it will be very difficult for all, except Vladimir Putin, to collect two million signatures. And Irina Khakamada's letter yesterday is either a catastrophic mistake or simply stupidity. Or some intentional justification of why she will not take part in the elections. I mean she understands that she will not be able to collect two million signatures not because there are not two million people in the country who want her take part in the elections, because there are many more people who want that, and I think that even 10 million people would be happy to sign up, but the problem is that the SPS and Yabloko structures cannot do that now, especially since Yavlinsky and Nemtsov do not have a clear-cut position. She will simply not have enough time to collect these two million signatures. And I think she published this letter in order to justify herself.

Khomyakov: I know this situation a little bit, Sergei. Ten organizations are collecting signatures for Khakamada. All of the SPS structures are involved.

Diskin: Are they?

Khomyakov: And they are working from morning till night. I believe 70 percent of Yabloko's structures are also involved, as well as a number of other parties that have big experience in collecting signatures. One of them is the Democratic Party of Russia that has been doing this for ten years.

I myself was surprised by this letter and frankly speaking upset by its content. But I think the tone of Khakamada's letter was connected with the additional mobilization of their people to collect signatures. It will be hard for them to do their job in regions after this letter if it reaches governors and other structures.

Diskin: It certainly will.

Khomyakov: And yet I think and hope that Irina will take part in the elections in order to represent the right-wing flank, in order to show that there is still someone in the right-wing flank.

Diskin: I did not want to get involved, but I have my own point of view on the matter. I think it is very probable that if Khakamada or Rybkin are not registered as candidates, they may go to International Court of Human Rights. I think the scenario includes this probability and a big and serious attack not on the president but on the country as a whole. I want Irina and Rybkin to collect two million signatures and get as many votes as they can.

Q: And they will then sue voters --

Diskin: It's harder to sue voters. But I am afraid that someone may breakdown and obstruct the collection of signatures.

Khomyakov: On my way here I received a telephone call and I was told that an anti-Putin committee had been created with Bukovsky, Garry Kasparov and Boris Nemtsov participating.

Diskin: Nemtsov?

Khomyakov: That's right.

Diskin: Actually thank God they did it because everyone cannot be in the camp of Putin's supporters.

Khomyakov: That's the point.

Diskin: If there is a way to talk with this anti-Putin committee --

Khomyakov: I think we will look for ways to conduct a dialogue.

Moderator: Thank you very much for your attention.

Khomyakov: Thank you.