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TRANSCRIPT: Interview with Prime Minister Vladimir Putin

File Photo of Vladimir Putin Gesturing While Speaking at a Podium
file photo

Vladimir Putin: Good afternoon.

Remarks: Good afternoon.

Vladimir Putin: Go right ahead.

Konstantin Ernst (Channel One CEO): Mr Putin, following the recent United Russia convention, a great deal has become clear in Russian politics. We discussed this just two weeks ago with President Medvedev. Today we would like to ask you questions that we believe to be of concern for our fellow citizens. One of these questions, which both your supporters and skeptics have been asking is: What for are you returning to the Kremlin?

Vladimir Putin: Yes, I know that there are a good deal of questions and comments concerning this issue that are floating around on the Internet, in online and print media. What I would like to say about this first of all is something that everybody knows and that Boris Yeltsin mentioned in his time, which is that I have never sought this post. Moreover, when I received an offer many years ago I had a lot of doubt as to whether I should accept it, considering the amount of work and the huge responsibility for the country's future that come along with the office. But when I undertake something, I carry it through to the very end, or at least to its maximum result.

As for the critical opinions of our opponents ­ which I suppose is at the root of your question ­ I can tell you that of our supporters, as you have said (and I hope that they form a majority), many people ­ ordinary people whom I meet when I visit various regions ­ are hoping for the situation to develop in this way.

But as you said, there are also critics who criticise me and Mr Medvedev, and who believe that if it is your faithful servant who goes to the polls, then ultimately, there will be no election at all. Well, perhaps these people have no choice, but an ordinary citizen always does. Perhaps there will be no elections for those who believe this. But our opponents need to take it upon themselves to propose their own programme instead, and moreover, to prove that they can do better. There is another claim that I often hear in relation to this: "Things are so bad that they cannot possibly get worse." It's certainly true that there are many problems and unresolved tasks that exist in this country. Things can be done better than they have been up until now. But as for the idea that "things cannot get any worse" ­ you'll have to excuse me. For our left-wing opponents ­ the Communist Party and the left radical wing ­ I would remind the late 1980s. Do you remember how many jokes were going around at that time? For instance: some people invite their friends to come over for a visit. When they arrive, the hosts ask, "Would you wash your hands with soap?" They say that they do. The hosts reply, "Then you'll be having your tea without sugar." The idea is that one could not afford to have both. People could only get the essentials ­ basic food products. There was rationing for everything, to say nothing of the monopoly in ideology and politics. That political power led to the downfall and collapse of the country. It created the circumstances that were behind the country's dissolution.

People lost their sense of self-preservation and their conception of consequence. It was in this way that we threw out the baby with the bath water ­ the dirty water of an inadequate political system and an inefficient economy. We allowed the country to collapse. This was also a time when people said that things could not get any worse. But then ­ the 1990s: a total collapse of the social sphere, when we saw not only single enterprises but entire industries coming to a halt, along with delays in pensions, all kinds of benefits, military pensions and salaries (which were delayed by months), and rampant crime. We truly came close to a civil war. We shed blood in the Caucasus, where we sent air troops, heavy equipment and tanks. We are still dealing with the problems that remain there ­ crime and terrorism ­ but thank God, the situation has changed. So, I would caution against saying that things cannot get worse. If we take two or three steps in the wrong direction, everything that has happened then could return in the blink of an eye. The situation is very tenuous with everything ­ in politics and the economy.

There is another argument: people are saying that the stagnation of the Brezhnev era will return. First of all, this does not deserve sweeping criticism, because there were positive aspects in both the Soviet times and the early 1990s. But I cannot recall any Soviet leader who was at the helm after the war who worked as hard as me or President Medvedev. I cannot recall such a thing.

Remark: They couldn't.

Vladimir Putin: Precisely. They had neither the proper physical capacity nor the awareness what needed to be done. They surely would have done something if they had known what to do. They also did not have the will to do what was needed.

Finally, we should seek answers in the experience of other countries. You are well aware that I did not hold on to my post when it came time, although I easily could have! There was a constitutional majority among United Russia, the ruling party, which would have been able to change the Constitution. But I did not go down that road for my own benefit, in order to show people that there is no tragedy in the natural succession of power.

If we look at other countries, the United States did not restrict the number of presidential terms for a single person until the end of World War II.

Konstantin Ernst: Yes, Roosevelt was elected three times...

Remark: Four times.

Vladimir Putin: There were several presidents before him who tried to get elected three times. As far as I know, none of them succeeded, but Roosevelt managed to get elected four times. He led the country through the harsh times of the Great Depression and World War II, and he got elected four times because he acted effectively. The issue is not about the number of terms or the number of years in power. [Helmut] Kohl was chancellor of Germany for 16 years. Yes, this is not the same thing as being president, but he was essentially the top official of the state and its executive power. The same was true of one of the former Canadian prime ministers. In France after World War II, the presidential term was seven years with no restriction to the number of terms. Changes were made to the constitution only recently, the term was shortened to five years and restricted to two consecutive terms. They created what is in fact the same procedure that now exists in Russia. What does this mean? When the country faces hard times and is steering itself out of crisis, political stability is essential.

Our country, too, experienced a collapse ­ the fall of the Soviet Union. What was the Soviet Union? It was essentially Russia, under a different name, though. We survived a very difficult period in the 1990s. Only in the 2000s did we begin to rise up and establish internal peace. The situation is now more stable. Of course, we need this period of steady development. In speaking about our plans, and my personal plans for the future, this is what we need to do. We must strengthen the foundations of our political system and our democratic institutions. We must create the conditions for the gradual development and diversification of our economy on a new, modern basis, and we must create the conditions to improve the quality of life of our citizens. This is what we intend to do.

As for talk about the possibility that your faithful servant may return, this is not guaranteed, because it is the people who will vote. Positive statements and proposals concerning this from the people in certain regions are one thing, but if the whole country comes out to vote, this is a completely different matter. The citizens must come out and express their attitude toward what we have been doing until now.

One of the most essential elements is of course the most active part of the political spectrum, the one that speaks about democracy and its institutions. There are fears that they may be forgotten. This of course will not happen. I cannot see this country developing without a corresponding development of its democratic institutions.

It goes without saying that this is what I intend to do in the future. Again, these goals are the strengthening of the country's political system and its foundations, the development of democratic institutions and the strengthening of the market economy with a focus on its social aspects.

Oleg Dobrodeyev (General Director of the VGTRK State Television and Radio Broadcasting Company): Let's get back to the United Russia convention held on September 24. This issue concerns and worries many, and is a crucial element. Dmitry Medvedev said on Saturday that the decisions were taken before the convention. Can you tell us when and under what circumstances this happened?

Vladimir Putin: Yes, I can. It's not a secret at all. In fact, it is a normal thing, not a conspiracy between two or three people ­ in this case two. It is absolutely normal in politics and practice when people form political alliances and agree on some principles of joint operation and conduct. We agreed years ago ­ four years ago, in fact ­ that this scenario is quite possible if both of us manage to survive this period of trials and tribulations.

Of course, we did not know that there would be a crisis, but we saw that processes underway in the global economy could lead to a crisis; we saw and felt that this could be so. And we proceeded from the assumption that if we got through the next four-year period, and if we did so successfully, then we would be in a position to offer the public our ideas regarding the structure of power ­ who would do what, our guiding principles and where we plan to lead the nation. And so when the time came and we announced our decision, we presented it not as a settled matter but as an issue which our compatriots must decide. We proposed the structure, but it is the Russian people who must support or reject it at the elections. Elections are the ultimate gauge!

Oleg Dobrodeyev: Can you disclose the circumstances of your conversation before September 24?

Vladimir Putin: There were no specific circumstances; we have been speaking about it for the past four, no three and a half years. We met regularly, had our vacations together, went skiing or did some other sport, or worked on routine political or economic tasks. We've always had it in mind and often discussed it in one way or another, speaking about the details in light of the emerging situation, but we have not fundamentally changed our decision.

Vladimir Kulistikov (Director General of the NTV Channel): I wonder if you and President Medvedev discussed the following detail: the president has positioned himself as a proponent of, what I would describe as, efforts to humanise our "monstrously inhuman" state in terms of how it treats individual citizens. That policy has been reflected in a number of his initiatives, including changes in our penal system, criminal law and political structure. You say that these changes should be continued, yet you are generally seen as a proponent of a government with a "strong hand." So this is what I'd like to ask you: Are these initiatives by President Medvedev something you could continue?

Vladimir Putin: We are on the same page on strategic matters ­ matters related to the country's strategic development. But we are not the same person, we are two different people, and at some stage Dmitry Medvedev decided that it would be sensible to humanise some spheres of life in Russia. He has a right to do so as the head of state. If the voters, the citizens, the public accept the structure of power we have proposed, I will not dramatically alter the things Mr Medvedev has done as president. We need to see how these changes will work out. Frankly speaking, I don't see anything revolutionary in this either. As president, Dmitry Medvedev acted in accordance with his personal understanding of what's good and what's bad, and in accordance with circumstances as they developed. But I repeat that I don't see anything revolutionary in this. Mr Kulistikov?

Vladimir Kulistikov: Yes?

Vladimir Putin: You currently head one of the largest media outlets, the NTV channel, which broadcasts across Russia. But if memory serves, you had worked for Radio Liberty.

Vladimir Kulistikov: Yes, I had.

Vladimir Putin: So.

Remark: A dark chapter in his CV.

Vladimir Putin: Dark or light, what does it matter?

Vladimir Kulistikov: I didn't say that. It was someone else.

Vladimir Putin: Anyway, you worked there. And when I worked for the KGB, Radio Liberty was thought to work for the CIA ­ granted, as a propaganda outfit, but still. And there were reasons for thinking so. Apart from being financed through CIA channels, it in fact did intelligence work in the former Soviet Union. The situation has changed, but Radio Liberty is still a media outlet that expresses the views of a foreign state ­ in this case the Untied States of America. So you worked for it in the past, and now you head ­ how long ago did it happen? Quite long ago ­ a nationwide TV channel. Isn't this liberalism? Not that we never had it before, I mean liberalism. But it's true that at a certain stage in our history we faced formidable threats, which were so formidable that the very existence of the Russian state was put in question, and so we had to tighten the screws ­ I openly admit this ­ and to introduce certain harsh regulatory mechanisms, first of all in the political sphere. But what else could we do if the Russian regions, their charters and constitutions had many things but lacked one essential element ­ they did not state that they are entities of the Russian Federation. Of course, we had to take harsh measures. The situation is different now, and so Mr Medvedev made these decisions to liberalise, as you said, public life, including criminal punishment and criminal courts. And now we will see together if this will work. Personally, I consider this as steps in the development of our political system.

Konstantin Ernst: Mr Putin, what was the reason behind your joint decision that President Medvedev should head the United Russia election list?

Vladimir Putin: Here is why we did it. While working as Russian president, Dmitry Medvedev has integrated certain fundamental things from theory and documents into public thinking and practice, things that have been included in the country's development strategy to 2020, about which you know. That programme also envisages the development of democratic institutions and economic diversification and modernisation. But it remained at the level of documents and discussions, whereas President Medvedev has moved these goals from the level of debates, lobbies and studies to the sphere of public thinking and practical actions. It is very important to have the tools to carry on this work. I'd like to remind you that under the Russian Constitution, the Russian government is the chief executive authority. It has the main levers and mechanisms, the instruments necessary for implementing real policy, for everyday work in the economy and social policy. So it is logical that Mr Medvedev should head the United Russia list. If the people vote for that list and we form a competent parliament in which United Russia maintains its leading position, Mr Medvedev will be able to rely on the parliament and the party's victory to form a competent government, so that we will be able to jointly implement the programme he has put on the practical agenda.

Oleg Dobrodeyev: Going back to United Russia, during the summer you often pointed out the need to get new names on the party's ticket. This is when the Popular Front was set up. In September you said that new deputies would make up over 50% of the United Russia party in the next Duma. But it's clear that most of candidates at least in the party's leadership are the same as before. Now that some time has passed, how do you assess the summer campaign?

Vladimir Putin: I'm not sure, and maybe I should not be saying this, but I will say it. As the saying goes, nothing should be done in haste except killing fleas. We need to act rationally and with stability. I don't deny what I said, and I would even go further and say that everything that we said would happen is happening in reality and things will continue going this way.

I'm referring to the following: first, the election has not taken place yet. I will remind you that elections to the State Duma are scheduled for December 4. We were to draw up the United Russia ticket and I was saying that we would try to use the Popular Front to attract new people who have fresh ideas and are capable of implementing them. What do we have? More than a half of the 600-candidate ticket includes people who have never before taken part in federal elections. This means we did renew the ticket by more than 50%. Moreover, a third of those included in the United Russia ticket ­ before I mentioned between 20% and 25%, and now it's a third of the candidates ­ are people who are not United Russia members, they don't belong to any party. These are people who have been nominated to the United Russia ticket by various non-governmental organisations, including youth, women's, professional organisations, and trade unions. I know that most of them are on the first part of the ticket and run a good chance to be elected to the State Duma. I believe that this objective ­ our main objective ­ will be reached ­ I'm referring to a significant renewal of the parliament through the United Russia parliamentary party. As for the party's leadership, I believe some changes will take place there, too. But first we need to go through the election.

Konstantin Ernst: Mr Putin, you mentioned stability and it is crucial. But there is a dark side to it ­ stagnation. What do you think of the staff stagnation in the government? Some ministers have not been performing well for a long time or have even made serious mistakes. Isn't this a stagnation that these ministers do not step down?

Vladimir Putin: First, we need to clarify what is a mistake and what is a series of failures. Indeed, mistakes can and do occur in various industries. Sometimes the minister is to blame but not always. A negative event often results from the overall state of the economy or the social sphere rather than the state of affairs in a particular sector even though this is sometimes the case. It would be wrong to unfoundedly pin the responsibility on one person. That's my first point. Certainly, if an official is personally responsible for an error, he must be responsible. This is my first point.

Second, a government reshuffle only unveils the weakness of the country's leadership. This means that the leaders are either unable or unwilling to take responsibility and always shift it to someone else. They say Petrov, Ivanov or Sidorov is to blame, or say Gurevich. You are to blame and I am not. This is not helpful; the responsibility should be shouldered by everyone. If we are to blame for something, people should know it. And the entire team should make the appropriate conclusions.

My final point will be as follows. Reshuffles and a leader's attempt to hide behind someone else usually does little to improve the performance of an administrative body. Before you dismiss someone you need to do your best to work it out. Finally, we only appoint an official to a position after a certain selection process. Naturally, some errors can happen and then we have to get rid of such an official, this is true.

Oleg Dobrodeyev: But the best cure for stagnation in one's own team is divesting ineffective players, even though they have been on the team for a long time. Your predecessors ­ Mikhail Gorbachev and Boris Yeltsin ­ were pleased to jettison the ballast once in a while. In fact, this is the reason why they say that a politician is doomed to solitude. Politicians of great caliber such as Winston Churchill and Charles de Gaulle often said so. Do you feel ready to relinquish many of those who you worked with over the years? Or, if things work out as easily for you as they can, will your staff move to the Kremlin, while those working there now will move to the government house?

Vladimir Putin: Well, about top echelon politicians being lonely. This is a widespread concept, and I partly agree with it, although I do not believe it entirely depends on having to replace the people on your team. When you fire someone, that person will certainly not like you for it, but you hire someone at the same time, which means you have a new friend. Top echelon politicians' loneliness has nothing to do with firing or hiring someone. They are lonely because they cannot afford to let anyone be too close. They can't show favouritism, and they can't afford to make important decisions based on their personal preferences or dislikes. They must perform a professional and impersonal analysis of the situation, so as to be ready to undertake full responsibility for the decisions they make. And we might as well admit that ­ well, we're only human ­ that people usually seek personal gain while dealing with top officials. Unfortunately, this is the truth. Well, not all people. There are some people who I know who have very strict rules for themselves and never make any personal requests, but just live their own lives and handle their own problems. But for most, it is highly tempting to ask a big boss for help, which suggests that a big boss should always keep his or her distance. Hence, the loneliness you described.

As for having the resolution to fire ineffective staff ­ this is an important point that should be made ­ it is the direct responsibility of any official, not necessarily the president or prime minister, every minister or corporate executive must be able to do this. If we want the system to function effectively, then we will have to do this. This is what we are discussing now ­ that the parliament and the government should both be renewed.

At the same time, one shouldn't stretch this rule to the extreme. Some continuity needs to be ensured, and we should certainly not play any games here. I mean if someone shouts something on TV or in printed media ­ that the government is ineffective and should be dumped ­ it doesn't mean that we should immediately do what they said. This would be ridiculous. One should look to identify the officials who seem to be doing the same thing over and over again ­ they must be bored themselves. However, if they do a good job, then they should be given a different outlet to apply their talent, skill and experience. Other people should be found to replace them, those with new ideas and an eagerness to implement ideas. This is the tactic we are going to use.

As for the distinguished politicians who you were talking about, we should certainly take a note of their vast political experience. They were state officials and philosophers, I should say. There are a lot of brilliant De Gaulle quotes. I like him very much. You are an expert on France, aren't you? You must know this quote that sounds like: "Always choose the hardest way, for you will never find rivals there."

Konstantin Ernst: Mr Putin, you have just made a working visit to China. Many note that it was your first foreign trip after you unveiled your plan to seek reelection. Those who enjoy following politics immediately recalled that Dmitry Medvedev also visited China in a similar situation in 2007. Does this mean that China has become ­ or is becoming ­ our key foreign partner?

Vladimir Putin: No. It is a mere coincidence. If you look at the government's work schedule, which is not a confidential document, you will see that we hold regular intergovernmental meetings between Russia and China, and Chinese Prime Minister Wen Jiabao visited Russia earlier. This means that it was my turn to go there now. It was a routine trip. The fact that we have a very tight schedule of high-level meetings ­ China's leader Hu Jintao visited Russia in June ­ indicates that China is certainly one of Russia's key partners, and can be justly referred to as a strategic partner. This is not only because we share the world's longest border. The most important thing is that bilateral trade is growing rapidly. China is growing at a high pace, too. It is certainly becoming a good partner, a market for Russian products, and a major investor in Russia's economy.

Vladimir Kulistikov: So it's a "partner" rather than a "threat", isn't it, Mr Putin?

Vladimir Putin: You know, I have said many times to those who try to scare us with the Chinese threat ­ mainly our Western partners ­ that the modern world is not exclusively focused on fighting for the mineral riches of Siberia and the Far East, attractive though they are. They are vying for global leadership, and Russia is not going to race China to it. It has other rivals in that business, so let them settle it between themselves. For Russia, China is a highly reliable partner. We can see that the Chinese leadership and people are eager and willing to develop good, neighbourly relations with us and to reach compromises on the most complicated issues. We can see this attitude and mirror it, which usually helps us find some common ground. I am sure that we will continue to do so in the future.

Oleg Dobrodeyev: As for the topic of global leadership ­ in an article in Izvestia, you write about the creation of a Eurasian Economic Space that could link Europe to the quickly-growing Asia-Pacific region. However, we all remember you saying that the fall of the Soviet Union was the worst geopolitical tragedy of the 20th century. With this in mind, how would you respond to people who perceive this article as a plot to create a new empire, or at least as an indication of imperial ambitions?

Vladimir Putin: Are you talking about people from post-Soviet space or people from other countries?

Oleg Dobrodeyev: Responses are coming in from everywhere. But I'm talking primarily about those who perceive this threat from the outside.

Vladimir Putin: If we're talking about the post-Soviet space and assessments coming from foreign countries... This is what I'd like to say about post- Soviet space. If you just grab a calculator (there used to be a calculating device called Feliks, where you had to rotate a handle in order for the result to show on its face), or just take a pen to paper and crunch the numbers. Determine what the economic outcome or economic dividends would be if we combined our strengths.

By the way, as for the current processes that I mentioned in my article ­ I am not the only one who came up with these proposals and plans. And Russia is not the only country to make such proposals. In fact, it was Kazakh President Nazarbayev who initiated this discussion. During his visit to Russia, he came to see me in Novo-Ogaryovo and made these proposals. We were already moving towards these goals, but...

Vladimir Kulistikov: When was this?

Vladimir Putin: This was in 2002, if memory serves. We discussed these issues at my home, not far from here in a building next to this one. There were four of us: Nazarbayev, Lukashenko, former Ukrainian President Kuchma and myself. I suggested that we wait for Kuchma to join us, and so there were four of us discussing these issues. That's the way it was. It doesn't take an expert to realise that combining our capabilities in such areas as technology, infrastructure, transport, energy, mineral resources, labour and territory, in addition to our shared language, which is also important for the economy, will result in a sharp increase in our competitiveness. It will increase dramatically. We will put to use the competitive advantages that we inherited from previous generations, and we will transfer them to a new modern base. We will do away with various limitations between our countries, including customs, currency rates and multiple approaches toward technical regulations. And so on, and so forth. We will remove bureaucratic hurdles in the economy and form a single, essentially shared market for the free movement of goods, human resources and capital; we will introduce standard economic regulations, enhance the security of our outer borders, primarily the economic security, and will become more efficient and more attractive to our foreign partners. If we introduce the rules and regulations of the WTO into our internal procedures, we will become more transparent for our foreign partners.

In fact, we are doing this already, but of course, the final decision is up to each sovereign state. We are not talking about a political association or the revival of the Soviet Union. Russia is not interested in this. We are not interested in taking on excessive risk or creating extra work for countries that are lagging somewhat behind for various reasons. However, Russia is prepared to make these calculations and take on part of the work, considering the shared interest of all countries involved, including Russia, in expanding this economic space. This is what I wanted to say about our CIS partners.

Now, as for our foreign-based critics ­ they are indeed "critics," who talk about our imperial ambitions. What can I say? We see what's going on in Europe: European integration has reached levels unheard of even in the Soviet Union. As you are probably aware, the number of mandatory decisions adopted by the European Parliament is greater than the number of binding decisions that were ever adopted by the USSR Supreme Soviet for the Soviet republics. Now they've started talking about a single government in the true sense of the word, and a single inter-currency regulator. These plans generate no objections, and no one talks about imperial ambitions. Integration processes are underway in Northern America between the United States, Canada and Mexico. The same thing is happening in Latin America and Africa. It's fine for these countries to do whatever they want, whereas in our case these critics see imperial ambitions. To these critics, to the obviously unfair ones, I say: mind your own business, deal with inflation, with the increasing government debt or with obesity ­ ultimately, just do something useful.

Konstantin Ernst: Mr Putin, the West seems to have reacted rather indifferently to your decision to run for president. Angela Merkel said that this was an internal affair of Russia, and they would work with any legitimately elected president. However, you understand that the West views you as a hawk. What do you think about this portrayal of you, and in general, what do you think about the reset, which exists as an idea, but which we don't see much of in real life?

Vladimir Putin: First of all, the hawk is a good bird.

Konstantin Ernst: Well, you're certainly not a dove.

Vladimir Putin: I'm just a human being. But I'm against all clichés. We always have and always will carry out a deliberate policy that seeks to facilitate Russia's development. This means that we want to maintain neighbourly and friendly relations with all our partners. Certainly, we have always protected our national interests and we will continue to do so. But we have always done it in a civil manner, and will continue to act accordingly. We will always strive for compromise in our solutions, that are acceptable to our partners and to our own country whenever we run into critical or controversial issues. We are not interested in confrontation. On the contrary, we seek cooperation and ways of joining our efforts. I have mentioned on many occasions that... Not only I, but our European friends and partners have done so as well. I have many friends in Europe, good friends and comrades in the true sense of the word, who are working or have previously worked at the top level of government. They, too, believe that Europe does not have a sustainable future without Russia.

Europe is not just a geographical term. It is also a cultural notion. We share many values with Europe, many of which are based primarily on Christian values, but there's more to it than that. Even people who consider themselves atheists are brought up on Christian values. However, Russia is a country of many faiths. There are many among us who practice Islam, Judaism, and a fourth traditional religion in Russia. You see, such a varied cultural background and such varied traditions as Russia possesses make it possible for us to establish harmonious relations with virtually every country in the world. And this is exactly how we intend to act.

Vladimir Kulistikov: Mr Putin, you said, "friends in Europe". But your personal and sound relations with many world leaders seem to be the only Russian foreign policy achievement to date. What do we see right now? Russia is being vigorously pushed into the background. Attempts are being made to deprive it of its world power status, as is evident at various international conferences where we are not even invited to the presidium. We are given seats in the second row and soon are likely to be sent to the balcony. The G8 is being transformed into the G20 to dilute this undesirable thing ­ or shall we say ferment? ­ called Russia. And this, incidentally, is affecting our domestic life, as people at home are morally unprepared to live in a second-rate country on par with Andorra. Do you see these dangerous tendencies vis-à-vis Russia? And if you do, how are you going to oppose them?

Vladimir Putin: In the first place, I would like to warn you against displaying such a haughty attitude towards anyone, including small countries. Showing a haughty attitude towards, say, Andorra, or towards any other small country, is inadmissible. I have been practising the Asian martial arts for my entire life, and I have a philosophy for relating to a partner. No matter who he is, he must be treated with respect. This philosophy is based on both general human considerations and pragmatism. If we think that we are surrounded by some small fries that are not worthy of our attention, we may take some unexpected hits, and very painful ones at that. Generally, we should treat our partners with respect regardless of their territory, economic might or economic status.

Not so long ago, if you remember, China was in a state of dislocation during the Cultural Revolution. But what is China now, just a short period later? Recall the early 1990s. Many people in Europe ­ many ­ began looking down on Russia, but many other clever, thoughtful and forward-looking people and politicians always treated us with respect. I know their names, and I am quite thankful to them because they inspired confidence in me. So, we must act and think precisely in this way. As for those who are trying to push Russia into a corner, they are mistaken. Russia is not a country to be pushed around. Besides, we are not overeager to be accepted anywhere. If someone is reluctant to see us somewhere, well, we don't insist on that either. Why? Our main task is to ensure this country's development and to improve people's living standards. This is the most important thing. With a stable political situation at home, with an efficient and growing economy, with a fully secured defense capability, we will rise to a stature where the choosing will be ours.

However, I repeat, we must do a great deal in the economic sphere and in the social area. Where foreign policy is concerned, we should feel confident and always know precisely where our national interests are. Russia is a country that cannot exist in any other way, I do agree with you on this score. It is in the public mentality. But let me repeat it once again. It would be a big mistake for us to give ourselves superpower airs or try to impose our will where a business in hand is of no concern for us. If, on the contrary, it is, then we will certainly do our utmost to defend our interests. But it is no good posing as a world policeman. If someone likes it, let him do it. We can see what is going on in the world and we are able to analyse it. To my mind, these countries will only do themselves much harm.

Vladimir Kulistikov: I accept your criticism and will henceforth be respectful not only to Konstantin (Ernst) and Oleg (Dobrodeyev), but also to the heads of smaller channels.

I have another question. Take, for example, the Arab region, where Russia ­ the Russian Empire, the Soviet Union, the Russian Federation ­ has traditionally been very strong. We saw revolutions rip throughout the Arab region not so long ago. It is quite possible that those countries were headed by "sons-of-a-bitch", but they were our "sons-of-a-bitch"! And now it looks like our positions have been weakened and no one wants to see us there. How do you assess those Arab revolutions and Russia's political prospects in the region?

Vladimir Putin: You are right in saying that this region is one of our traditional interests. We have stable and profound ties with them. The political forces and business interests in many countries of the region would like to promote relations with Russia. But there is nothing new happening over there. Take Egypt as it was in the past decades. Don't you know there was a honeymoon in its relations with the Soviet Union after which it unexpectedly turned to the West and the United States? It's all on record.

Oleg Dobrodeyev: A personal question: The recent past has been characterised by many as a period of certain political uncertainty. This is an open secret. Every period of political uncertainty in Russia is accompanied by growing discontent among the elites. There have been rumours of a split in the tandem. Individuals, especially bureaucrats, have begun to wonder and calculate what will happen. In this situation, during this period, did you feel let down on a personal level? This is the first question.

And the second one: Have you had the feeling during this period that some of the people close to you, some that you may have helped gain positions of power, stopped looking up to you, and maybe even stopped respecting you?

Vladimir Putin: You certainly know that among the so-called elites there are always people who, and this may sound crude, try to wheel and deal and take advantage of the situation for personal gain. But I cannot say that I noticed these things nor took them seriously. My colleagues, those close to me, in particular, did not change their attitude to me for the worse or showed any disrespect. Nothing of the sort. I am convinced that the most important thing for politicians in today's world is not the office or the post but the trust of the people. This is the foundation that allowed me to be effective. Despite the economic crisis, I believe that the government of the Russian Federation functioned fairly effectively throughout all these years. All of this allowed me to work with confidence. Others sensed that as well. I am very grateful to Russia's citizens for this support ­ perhaps not always vocal, even muted, but at the same time, very clearly articulated. I felt this support. And I am very grateful for it. I must add that it allowed me to implement coherent and, in general, effective policies to deal with the crisis. Certainly many things could have been done differently, some things could have been done better; but I believe that we acted more effectively and more rapidly than the governments of other countries.

Not only did we save individual businesses, we saved whole industries that were on the brink of collapse; for example, car manufacturing, and the financial and banking sectors.

We prevented a repeat of the 1998 crisis, when people lost all of their savings in the blink of an eye. I promised that we would not allow this to happen and we kept our promise. We have re-established pre-crisis level at the labour market. Today there are fewer unemployed than there were before the crisis hit. Yes, there were certain mistakes and shortcomings, but in general we addressed the issue effectively and took the necessary decisions fairly rapidly. Again, this was all based on the support of the average citizen. So, I cannot say...

Remarks: What about the top echelon?

Vladimir Putin: The top echelon is also very important, but again, they realised that there was this foundation of support that was decisive.

Vladimir Kulistikov: You just mentioned economy and the crisis. The world economy is in turmoil once more, stock markets are dropping. There is talk that stock brokers' own potency is waning fast; substantial amounts of investors' capital in developing markets', including Russia, is being lost. I have read somewhere that in order to withstand these setbacks brought on by the second wave of the crisis the government will need to elaborate a special programme. It should be as short as a woman's skirt and open up equally inviting opportunities. That would inspire confidence among entrepreneurs and the crisis would be over. Could you please comment on this. Does your government have such a programme? Moreover, since our budget is based on the assumption that a barrel of oil will not fall below $100, and yet the price is falling, will the budget be reviewed?

Vladimir Putin: Well, you know, if we constantly focus on the fact that everything is falling, things may never go up again. This year we will see 4% growth, which is satisfactory, while in China it is at 9%, which is good. We need to strive for 6-7% growth, similarly to pre-crisis years. That is our goal, as I mentioned before.

As I have already said we will strive for an open economy. There are certain concerns, especially with regard to Russia joining the World Trade Organisation, that excessive openness may be harmful to us. As for the woman's skirt ­ it may benefit some to wear a short skirt, while others may opt for something else...

Vladimir Kulistikov: Something longer.

Vladimir Putin: Yes, other clothing. It seems to me that we have insured ourselves against all contingencies during the negotiation process with the World Trade Organisation. In effect, Russia's transitional period has been really quite long for entire economic sectors. Still, we will strive to facilitate a competitive environment for national enterprises and whole industries, in order to ensure their cost-effective performance and ultimately, their competitiveness, so that Russian citizens will have access to high-quality goods and services for reasonable prices. In fact, this is the main incentive for joining the World Trade Organisation. But I would like to repeat once again that we will make the final decision only if all parameters associated with the need to protect our national economic interests at any given stage are discussed and formalised.

My colleagues and I perceive these threats, of which there are indeed many, that are being generated by the so-called industrial economies, rather than by the Russian economy. So, what can be said? On the whole, we had prepared quite well for the crisis that arose in late 2008 and early 2009. Today, we are keeping a close watch on global economic developments and those on leading exchanges. Of course, the diversity of the Russian economy is still insufficient. Sales and prices of traditional Russian products plunge when Western markets begin to shrink. In all, there are just four or five, perhaps seven of these sectors. The blow that Russia receives as a result of this is heavy and substantial. The balance in this situation would be better if we had 50-100 sectors, rather than 7-8. In that case, we could switch over to the floating rate of the national currency. Right now, we, along with the Central Bank, are forced to make certain adjustments. For this reason, we will be able to safely say that we are prepared for any changes in the situation on the domestic market only in the event that we can overhaul the internal state of the Russian economy, and if we can diversify it.

In comparison to late 2008, we currently have some advantages and some drawbacks. As for the drawbacks, I would like frankly to point out that during the crisis, we managed to expend our resources and reserve funds to some extent. Still, we did not use them up completely during the past 12 months. On the contrary, we have started to expand them. The government's Reserve Fund will total 1.7 trillion roubles. The country's National Wealth Fund will total about 2.8 trillion roubles. That's two reserve funds, plus the Central Bank's gold and foreign-currency reserves, which total $550 billion. That is to say, we have a rather large safety cushion. I repeat, the government's reserve funds are slightly smaller than they were prior to the crisis, and of course, we need to keep this in mind.

In terms of the advantages, we have perfected specific mechanisms, and we know what has to be done in certain situations. We have perfected these mechanisms and improved the legal framework. We don't even have to address parliament another time. We know what to do, and how to do it. We are aware of the instruments that need to be used to ensure the stability of the financial system, various material-production sectors and the social sphere. This, of course, is a plus. In summary, considering our reserves and our experience in coping with the crisis of 2008-2010, on the whole, I'm confident that we are fully equipped to deal with any contingencies.

Regarding the budget, as you know, we have calculated it using the rate of $100 per barrel of crude oil. This information is open. Indeed, we rely heavily on the oil and gas sector, which accounts for over 40% of budgetary revenues. On the contrary, other proceeds made up over two-thirds of additional revenues this year. This is indication that to some extent, a restructuring of the economy is taking place in the necessary direction. I repeat, the 2012 budget was calculated according to the rate of $100 per barrel. The average 2011 prices will amount to $110 per barrel. We believe that oil prices will not plummet next year, but we have calculated the budget using the rate of $100 per barrel, rather than the current $110. This is quite a pragmatic approach. But even if oil prices fall to $95, we will not have to borrow substantially and place an additional burden on the country's financial system.

Incidentally, speaking of additional 2011 revenues, we will have spent over 320 billion roubles on financing the budget deficit, without taking out any additional loans on the global market. This means that these resources will remain at the disposal of financial institutions and the Russian economy. This is yet another positive factor. By the way, our current accumulated inflation totals 4.7%, an all-time low in modern Russian history. Our expenses will peak at the end of the year, that is, in late October, November and December. Although inflation is bound to increase, I believe that the 2011 accumulated inflation will be the lowest in the entire history of Russia.

Vladimir Kulistikov: I am sorry I have to ask this question, but if I don't the shareholders will sack me.

Mr. Putin, Gazprom is having a bad time in Western Europe with all the searches in Gazprom offices in Germany. How do you see the situation surrounding this major Russian company?

Vladimir Putin: It's all very simple. I have spoken publicly about it many times: every seller wants to sell his product at a higher price, and every buyer wants to purchase it at a lower price or to get it for free. Naturally, nobody is going to hand over their product for free. But the buyer wants to purchase it at a lower price. So they are making a unilateral decision: they have adopted The Third Energy Package ­ and made it retroactive, which is unprecedented. This might seem unacceptable in the civilised world and yet they have done it. We think their only objective is to reduce the price, to disrupt the market price formulation which is linked to the oil price in Russia. We do not dictate this price; the price is pegged to oil: oil prices go up and gas prices go up, oil prices go down and gas prices go down. I believe this approach lacks foresight because although the price of oil is strong at the moment, it can go down tomorrow and then Gazprom will suffer losses and vice versa, the buyers will get rate preferences. I do not think this is well-founded. In addition, the gas market is a very specific market. It is largely linked to a specific supplier. Our partners have proposed a third link, or to have a third buyer and seller... In this case, when our gas reaches Western Europe's borders, they will tell us to sell it on the exchange to a third legal entity, it will purchase our gas and will sell it again. And what will this lead to? Somebody will be taking an extra margin. And it is not certain at all that the price will go down. And this is the first thing.

The second is innovation: They have proposed separating the ownership of the gas pipeline system from the gas owner. Give away your pipeline systems! And currently some Baltic nations are seeking to take away Russian and German property that we have legally purchased. How will this affect the gas industry? Without the organisation owning the product it produces and sells, the transport system it uses could suffer because the transport system itself is unprofitable as a rule. So this could make it necessary to raise pumping rates, which obviously would not lower the price for the final consumer but on the contrary, result in a higher price or a degradation of the transport system.

Is it possible to reduce gas prices for the final European consumer and simultaneously supply gas under a long-term contract? Yes, it is possible. But it would be necessary to eliminate the current mediators. Some major companies, our European partners, are purchasing Russian gas, and then they supply it to their own power plants and take the margin at the first step. Let Gazprom be a direct gas supplier to those power plants, without mediators, and the gas price will drop. Let Gazprom supply gas to the final consumer and more mediators will drop out. Finally, there is one more component: the social tax burden on energy resources is very heavy including on Russian gas, and these taxes are going to the budgets of our partner nations. Well, who is forcing you to collect such high taxes? Reduce them. Why is it only us who must pay the price for this cost burden? But all of these problems can be resolved in the short term despite their complexity, and I hope that a partnership-based dialogue will ease these problems.

Konstantin Ernst: Mr Putin, getting back to the election, will the know-how you've gained through the Russian Popular Front help United Russia in the election?

Vladimir Putin: As you know, I would like United Russia to win the election. First, the incumbent president heads the party ticket, and if voters respond favourably to the power arrangement we proposed, we will be able to form a durable and effective government with Dmitry Medvedev at the helm. This is my first point. Second, for us ­ and for me ­ the rationale behind setting up the Russian Popular Front was not only to reinforce United Russia, although this is very important since we need a parliament that is capable of performing its functions. This is very important but this is not the only important thing. It is important to make mechanisms of direct democracy work, and make sure that people feel connected to the authorities. Since the times of Peter the Great, we have grown accustomed to putting a Western product or sample on display, pointing to it and telling people to copy it. In some cases this is good, but in others it isn't because you can tumble into a pitfall and make mistakes. In this respect, and with regard to the development of democratic institutions, we are speaking of an economic crisis in Western countries but it already has a political dimension. Many Western experts speak of a crisis in authority and in people's trust for the Western multi-party parliamentary system. They say that this Western multi-party parliamentary democracy fails to offer the people a leader that will enjoy the trust of the majority of the population. Meanwhile, the Russian Popular Front and the primaries are, to my mind, the tools that should help expand the foundation of real direct democracy in this country. I believe that this will also reinforce Russia's political system as a whole.

Oleg Dobrodeyev: I would like to expand on what Mr Ernst has just asked about. Do you expect any problems for United Russia in the upcoming election? There is less than eight weeks left and the election campaign looks completely different from the campaigns ahead of the 2003 and 2007 State Duma elections. Proposed by Dmitry Medvedev, significant amendments have been made to the election legislation to liberalise it. The minimum threshold for the State Duma was decreased and the main thing is that the law on parties' equal access to the media has come in effect. As a result, political competition ­ at least judging by what we see on TV ­ is much tougher than it used to be. Will the current situation make things more difficult for United Russia in its struggle for the number of seats it expects to get in the State Duma?

Vladimir Putin: It certainly will. The competition will become tougher, which I don't think is a bad thing; in fact, it's a good thing. The question is how we should develop these democratic institutions. We must always think critically. We must ask ourselves ­ do we really need 10-15 political parties in parliament? Do we need to end the eligibility barrier entirely? We have seen that happening in Ukraine. Do we need a Ukrainian-style parliament where it is next to impossible to discuss anything? Look at the United States. Do they have many parties? And no eligibility threshold? But they have other instruments that ensure that there only two major parties in parliament. They have strong competition within their parties before elections. And democracy is growing there, supported, among other things, by this practice of primary voting. It helps bring to the top the most effective and popular politicians who compete among themselves. The same happens in parliament.

Russia has an emerging political system. We are not going to rely on voluntarism in our decision-making. We will always maintain dialogue with the public and society. We will seek formats that ensure the sustainability of our political system. This is one of the goals I will work to achieve ­ that is, I mean, if people elect me, and if the voting goes well and people support United Russia's list with Dmitry Medvedev at the top, and then we can form an effective government. One of the key goals will be to build a sustainable political system, which would use its own resources rather than act on advice and orders from abroad. Our country cannot live as a satellite. It needs a strong political system with a sustainable internal structure ­ modern, flexible, and reflecting modern challenges and realities, and at the same time relying on our national traditions. It is unacceptable for Russia to do as some of the countries from the former Warsaw Pact, or Eastern Bloc, or Soviet Bloc, do ­ and I know that some of them do so: they can't even appoint a defence minister or a head of the general staff without consulting a foreign ambassador. Russia could not live like this. But, to preserve our independence and sovereignty, we need both a growing economy and a sustainable political system. It can be sustainable only if people feel that they make a difference and influence state policies as well as the formation of government agencies. We'll see how the instruments proposed by Mr Medvedev fare. I want you to understand that we are doing this together. But, while Mr Medvedev was president, he certainly had the final say here. I have great respect for this. His proposals have been adopted and will be implemented. We'll see how they work ­ in United Russia and the Russian Popular Front ­ and make corrections as we go, if needed.

Oleg Dobrodeyev: What would you consider a respectable election result for United Russia?

Vladimir Putin: You're trying to get me to make political predictions.

Oleg Dobrodeyev: Not at all. No figures please. I just asked about an outcome you would consider respectable.

Vladimir Putin: United Russia should remain the leading political force in Russia and in the State Duma. That would be a respectable outcome.

Konstantin Ernst: Thank you for this interview, Mr Putin. On that let's call it a day. Good luck!

Vladimir Putin: Thank you.


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