TRANSCRIPT: Prime Minister Vladimir Putin meets with members of the Valdai International Discussion Club
file photoTranscript of the beginning of the meeting:
Svetlana Mironyuk (RIA Novosti editor in chief): Mr Putin, this is the seventh session of the club, which traditionally concludes with a meeting with you. Last year we talked about reforming the club. A reform has been accomplished within the year, and now the Valdai routine is more practically-oriented. The results of this are intellectual products: reports and research applicable to decision-making in Russia and abroad. An advisory board has been established at the Valdai Club, the members of which are here, sitting in front of you. A Valdai development fund has also emerged. The money it raised has allowed us launch a grant programme for the joint research of Russian and foreign scientists on Russia, its role, and scenarios for the development of Russia and other countries.
A second Russia Development Index study was made this year. This was an opinion poll of Valdai experts on the dynamics of change in the Russian political system, economy and foreign policy.
The club members visited Kaluga this year. Discussion revolved mainly around Russia's post-election development scenarios. There were several scenarios from the pessimistic, which proceeded out of stagnation, to the optimistic, forecasting a dynamically developing Russia. With your permission, I would like to ask Tim Colton of the advisory board (Timothy Colton, professor and Chair of the Department of Government at Harvard University) to briefly introduce the discussion results and expert conclusions before we move on to the traditional questions and answers.
Vladimir Putin: Please, go ahead.
Timothy Colton (via interpreter): Thank you. We are grateful to our hosts and to Mr Putin for finding the time to meet with us tonight. I was asked to present a three-minute review of our discussion in Kaluga, so I'll be as brief as possible. Our theme this year was the election cycle of 2011-2012, and Russia's future. We spent more time talking about the future of Russia than about the upcoming elections. We discovered that we understood more or less what was going on in the election process, so we found it more expedient to discuss what might follow. We had at our disposal a report drawn up by a Russian member of the Valdai Club. Mr Putin, I believe a copy of that report has reached your office. It's a rather ambitious report. It reviews the current situation and presents various possible scenarios of Russia's future over the next five to eight years.
As for general impressions, and our discussions with other club members (the groups are welcome to correct me if I've gotten something wrong), my impression is that it was a frank discussion possibly more so than we expected three or four years ago. More and more questions emerged perhaps more questions than answers. Apart from this frank discussion, its strain reflected the developments in the Russian public: some people were more pessimistic than I expected two or three years ago. There was a degree of negativity where the current situation and medium-term prospects were concerned. This negativity was reflected in opinion polls carried out in Russia. Therefore, we proceeded from the reality in your country. We did not come to a consensus about recommendations as a group, we cannot say that we advise this or that. Russian and foreign participants in the discussion voiced a wide range of opinions. I had a feeling that many in this room the majority, I would say would agree with the following, though I cannot consider it to be unanimous: the present model of government, which took shape in Russia in the last ten or twelve years, appears to have exhausted its potential or is about to reach that point. So the majority of our group I don't say all but the majority, anyway are saying this year that Russia is facing formidable challenges, and what's going on now isn't very practical. Perhaps things will look different after the elections, when you become president again but it cannot go on and on endlessly.
As for the workings of the system, we focused on three factors. The first one was institutional problems. It was repeatedly noted in discussions that when you speak about future choices for Russia, those choices concern institutions that are not strong enough yet, so what those choices are about is how to spend government funds and how to bolster those institutions.
The international aspect came next. I think we achieved consensus here, saying that the Russian choice cannot be made in isolation from the international, global situation, in which Russia is called upon to play a major part.
Finally, we talked about socio-economic changes, especially social changes as correlated with the political situation. Many came to the conclusion that Russian society may have been in chaos in the 1990s, when you were in St Petersburg. As for Russian society of these last ten years, it can be described as dynamic in many respects. The Russian political system, on the other hand, appears rather static even stagnant, unlike social processes.
In conclusion, I would like to say that, as we were evaluating the situation, we discussed a number of scenarios for the future. They came from our Russian colleagues. I will not go over the entire list but one scenario concerned the inertia of the status quo, with no changes in the next five to eight years, while another scenario involved changes. The Russian authors of the report, and in English, I would call their scenario "the best case option," envisages gradual but substantial democratic reforms in the next five to eight years.
As far as the government and the general political situation were concerned, an opinion was voiced that a strong and emotional leader will dominate. The Russian group also recommended two or three ambitious national projects, especially one involving the east and Siberia. Toward the end, as I have said, we had more answers as the discussion became very frank. I have taken part in the process since the beginning and I can say that it was the best discussion we have ever had. We concluded that a choice must be made, so we all want to hear Prime Minister Putin tell us about when the time will come. What do you think of this opinion of Russia's situation? Do you agree with the report's authors that stagnation is the most probable option but it cannot last too long? Mr Putin, you know very well what is being said about stagnation, so it would be very interesting for us to hear your opinion about this. Thank you.
Vladimir Putin: This is a discussion club, isn't it? So let us start a discussion right now. I'll enjoy it only let's make sure we don't finish by the morning but a bit earlier. I would like to begin this conversation as a debate. A point was made from the beginning that the present Russian government model has exhausted itself right, either exhausted or is in the process of exhausting itself. I would like to call your attention to the following. There was a civil war in this country in the early and mid-1990s. I mean the large-scale warfare in the Caucasus. It wasn't just terrorist outbreaks but a full-fledged civil war. The economy and the social sphere were in an utter collapse. True, the foundation were laid for future development, but the country was in a very complicated state. Many of you, let's be honest, probably wondered how long Russia would last.
The present government model helped to stop the civil war and restore the constitutional order in the entire country. It ensured rapid economic growth, which is the main goal of any government. On this basis, we restored social standards and, what matters most, improved people's standard of living. The public income increased 2.4 times within the last ten years not by some miserable percentage point but by 140%! Pensions grew 3.3-fold. Even during the crisis a crisis that came to Russia from other countries, which is common knowledge and no one denies it even in these adverse conditions, the number of low income households decreased. There were 18.5 million Russians with incomes below the subsistence level in 2010 against 21.5 million in 2006, so you see that the trend has persisted even despite the crisis.
The crisis certainly did damage to Russia as to any other country, but we survived thanks to our economic and social reserves, and even achieved economic growth. We almost doubled our economic volume, which was a goal we had posed. We also provided guarantees of domestic and external security. If someone doesn't like it, it's a pity. However, none of this means that no changes should be made. The world around us is changing, and we change with it. There are present and future challenges to meet, and they certainly cause us concern.
Look attentively at the national development programme until 2020 and you will notice how persistent President Medvedev has been about modernisation, which is one of this programme's objectives. As I said, President Medvedev has taken the programme out of offices and papers to make it part of everyday life, and promoted it together with the government.
None of this means that our political system should remain unchanged. We have amended the Constitution, as you know. We do not think that these are final steps in the development of our political system. Of course we think how expand the contacts between the people and the municipal, regional and federal authorities, how to increase their influence on the authorities and how to ensure feedback.
Our system is certainly far from perfect. We know it, and we know criticisms of, say, the leadership system President Medvedev and I offered to this country in what is known as our tandem. However, please note that I don't know a single government system that is perfect.
Take Great Britain. When Tony Blair, my respected colleague in the past whom I regard as a good friend, left the party leader's post, his successor to that post automatically became the nation's top leader as he headed the Cabinet without an election, without whatever promises, just through manipulations within his party. I don't know whether that was good or bad I mean I have my personal opinion but I will not make judgments here.
That is not our way: we hold elections and ask our country's citizens to make their choice and show what they think about our past efforts and the programme for the nation's future development, which envisages economic modernisation and growth guaranteed on a new basis, and new high-tech jobs. Our ambitious goal is to create 25 million such jobs.
This does not mean that we should start from scratch. True, the labour market might need changes not even might. The market needs them, but it is the real labour market. We must improve our political system, bring our laws into conformity with the neighbouring countries' legislations, humanise the criminal law, etc. The programme envisages an extensive set of measures for national development in every field. I would like to stress once again that we don't think everything has fully exhausted itself. Neither do we intend to mark time. Thank you.
Svetlana Mironyuk: If I may, I will give the floor to the oldest members of the club so that they ask you questions. By the "oldest" I don't mean their age but that they have visited Russia the most and have taken the most active part in club work.
Vladimir Putin: I don't like the word "old". Let us say "the most experienced".
Svetlana Mironyuk: The most experienced, certainly. Piotr Dutkiewicz of Canada has the floor.
Vladimir Putin: Go ahead, please.
Piotr Dutkiewicz (professor of Political Science, Director of the Centre for Governance and Public Policy at Carleton University, Ottawa): Good afternoon, Mr Putin. We are talking today not only to the Russian prime minister but also to a presidential candidate. I would like to ask you in what way will President Putin be different from the Vladimir Putin of his first presidency. What will he be different from the president we knew between 2000 and 2008? As you surely know, a TV series is good when it has new storylines and new faces. I would like to ask you what new faces and storylines do you see in Russia's future?
Vladimir Putin: First, Mr Dutkiewicz, I assure you that Vladimir Putin has no split personality just as, I hope, nobody in this room has. You are talking about one person. However, you have every reason to ask your question, considering the upcoming elections. I would like to say this: there are essential things that should not be changed and that cannot change. We are talking about the election of a head of state, so I hope you will excuse me if I use grand words.
There are certain essential things inviolable things. That is patriotism; the desire to do as much as possible for one's fellow countrymen; and the improvement of their life through economic growth, its high rates, and domestic and external security. But how should we achieve such a result? To be sure, my colleagues' opinions and mine, for that matter, cannot but alter over time because we live in a changing world, as I have said. So it is necessary to change methods, ways and means, and approaches to those problems and, of course, we have to change with them. But I have said already that we have a national development programme, and we will work to implement it. In that, we certainly see how the public mentality is changing, how relations between the public and the authorities change, and how interethnic relations proceed for example. We can see what demands people are making on the authorities with easier access to information technology and with better access to information, and we see how the authorities should respond to all that. Of course, we are aware of this and there will be there have been changes in this respect. I have changed my approach to these problems. I believe my colleagues have changed it, too.
Piotr Dutkiewicz: Thank you.
Svetlana Mironyuk: Hélène Carrère d'Encausse, one of the most respected members of the club.
Hélène Carrère d'Encausse (member and Permanent Secretary of the French Academy; foreign member of the Russian Academy of Sciences): Thank you very much. Mr Putin, you published an article in Izvestia with a proposal for establishing a Central Asian union that would be based on an integration of customs systems...
Vladimir Putin: Yes, a Eurasian union.
Hélène Carrère d'Encausse: A Eurasian union.
Among other things, you refer to the experience of the European Union. I would like to clarify that the European Union was established because the European countries needed such a union. They had been caught in the bloodshed of the two wars. However, the union was established with the intention of uniting the countries with similar political systems and values.
I read your article very carefully. As I understand it, you state that there are no obstacles for continuance of the Commonwealth of the Independent States and it will be an open union, which is open to the CIS states first but is also open to others. So my question is, why does Russia need such a union when there is the CIS and, particularly, when the political systems in the CIS countries are not identical? Another question is if you say the union is open to CIS members first, who are the other countries? Why does Russia need it? How will this complement its membership in the existing commonwealths?
Vladimir Putin: I see. Helene you reminded us how the European Union was formed. You said the European nations had fought wars with each other and they needed to establish an alliance to prevent future conflicts. But, from this perspective, they should have included Russia because Russia had been at war with its European neighbors, too with France, and Germany, and all of Europe. In fact Europe was either at war with Russia or in alliance alternately. But the European Union had an economic motivation. As we all know, it began with the European Coal and Steel Community ECSC. Why? Because they had to resolve an energy problem, and coal was the most important energy resource. They had to decide what to do and how to distribute it. It's easy to forget that the cornerstone of the present-day European integration system was energy. Soon it became obvious that that was not enough that they had to combine their efforts to restore the economy after WWII and to ensure future sustainability and competitiveness.
The same holds true for the former Soviet countries. First, many of these economies found themselves dysfunctional and uncompetitive because they had developed as part of the Soviet central planning system, in isolation from the global economy. On the other hand, each of these economies has something that can give them competitive advantages through integration. They evolved as an integral whole: they had a common railway system, roads, power grids, and common regulations. But most importantly, the separate parts complemented each other in a common economy. As a result, some of Russia's largest companies cannot operate without their partners and counterparts in other countries and they require this established cooperation.
You know how it is. We have railways operated by Russian Railways, or RZD. One of the lines it operates runs across the border into Kazakhstan and then crosses into Russia again. What can we do about that? It's a Russian railway line. We need to address the issue and reach an agreement. This is just one simple example, and the unified energy system is another. It is an even more integrated system. There are other sectors in which the post-Soviet countries can significantly improve their combined competitiveness through certain synergies. Hence our pursuit of integration. I caught your hint about varying political systems. It was Timothy who initiated today's discussion and formulated the topic. Piotr later asked what is going to change in Russia and how the potential new president should change so that people would vote for him. But I can also tell you that political systems change as well. They simply have to adjust to new challenges and new realities in every country.
The methods used in the past few decades are no longer effective for running a country given society's new information openness. I think this is becoming clear to everyone. Political systems will be changing in one way or another. Moreover, the economy will also prompt political changes. I hope that this will happen through evolution, that is, smoothly and gradually, through agreement between those in authority and the people. I believe that the integration we are discussing will contribute to positive changes.
I'm not talking about the economic aspect of this issue because I think it's rather obvious we are building our new integrated structure on WTO principles. Suppose Russia is granted WTO membership by the end of this year, while our Customs Union partners, Belarus and Kazakhstan, aren't. But we have used WTO principles in the Customs Union and the Common Economic Space from the beginning. Without that, Russia would never have been granted membership.
Russia is working on the issues of integration in close contact with the WTO. This will mean that the rest of the world will be able to work in this common customs space based on WTO guidelines. I think this gives an important economic advantage to Russia's partners both inside and outside the Customs Union.
Orietta Moscatelli, head of the New Europe project at the Apcom news agency, Italy: First, I'd like to thank you for this meeting. I'm from Italy so I think you can anticipate my question. There is one thing I'd like to ask, though there will also be other questions. Here it is: What do you think about the resignation of Prime Minister Berlusconi and about the developments in Europe in general? The common feeling is that the crisis is dragging on and it is no longer clear what we will see when it eventually ends. Thank you.
Vladimir Putin: I have had a very warm personal relationship with Mr Berlusconi. I think he is one of the largest modern European politicians. And no matter how hard he tries to shock everyone, including by his female cohorts (personally, I think that he is doing this, or rather, he did this deliberately, to attract attention, but I could be wrong), he was definitely one of the last Mohicans in European politics.
Do you remember how many governments Italy has had since the war? One of our common acquaintances it's no secret: it was Gerhard Schroeder kept telling me that Silvio is a good, honest, upright person, but he is not a politician, he is an anarchist, and that Italy is an anarchist country, which is why he is liked there. Well, I hope he was joking when he said that Italy is an anarchist country.
When Gerhard retired, I reminded him about that conversation, telling him that Berlusconi may not be a politician, but he still has his post, and what about you? I asked him. I know that Gerhard, if he reads this, will not take offense, because I have said this to him face to face.
But you know, it was good for Italy that Berlusconi had maintained power for a long time, a very long time in terms of Italian and European history, because despite these scandals, which concern a subject of common knowledge, his staying in power for so long is evidence of internal political stability. And he didn't accomplish this with any undemocratic methods; he did it using democratic tools. He knew how to rally and bring people together, but what impressed me most was his openness. I don't want anyone to take offense, but I know of few such politicians in Europe. He could speak his mind. At the same time, he acted rather cautiously, respecting his obligations to NATO and the European Union, while also developing relations with other countries, including Russia, outside those alliances. I am sincerely grateful to him for our personal friendship and I hope the position will be taken by a responsible person who can lead the country on. I think he has done much for Italy. And how is he behaving now? He is behaving responsibly. He does not cling to anything, in particular power. He behaves openly.
As for the crisis, all of us are worried about the crisis in Europe. The EU accounts for over 50% of Russia's trade, which is why we are concerned. Unless prompt measures are taken to overcome the financial crisis in Europe, the next step will be I know I'm not the first to point this out, as everyone knows this and has been discussing it the next step will be economic stagnation. This implies major changes in the financial and banking systems and subsequently a recession and production slump. I hope this will not happen. We hope very much that first the European authorities, the European countries, and then their financial authorities, including the ECB (the European Central Bank) will intercede in the processes and stop this negative scenario. We wish this wholeheartedly.
But our experts, some of our leading experts believe that the problem is unlikely to be resolved without the ECB's direct input, because the operation of the European Financial Stability Facility (EFSF) is based on ties with the International Monetary Fund, which doesn't have the necessary resources either. I think Europe needs approximately 1.5 trillion euros to overcome the crisis. A default in Italy must be precluded one way or another, as this would be a catastrophe. I see what is happening, that some of our European friends and partners are pushing for monetary policy principles. I can understand their position; I do. However, economic policy is the art of what's possible, and so one should be keenly aware of the nuances. It is sometimes better to act quickly, even if you make some minor mistakes, than to sit on your hands.
I'd like to say once again that we very much hope for the ECB's direct involvement. I don't expect that this will result in a catastrophic growth in inflation. I don't think so. The US Federal Reserve System has been working toward the same objective. You can criticise it I sometimes do but can you say inflation has been catastrophic in the United States? Britain is acting likewise. Yes, inflation has grown there to 5%, I think, which is high for Britain, but a crisis like the Eurozone's has been prevented. They will not allow it! The choice is not between good or bad, but between bad and worse, so it would seem reasonable to opt for bad rather than for worse. But the choice belongs to our European colleagues and friends.
It is always easier for onlookers, but politicians have to take various factors into account, and what may look good in theory is not always possible in practice. But these people I know nearly all of them personally they are very responsible and economically wise, they can hear, listen and take the necessary decisions. I hope these decisions will be taken. Next please. Angela? (Angela Stent, director of the Centre for Eurasian, Russian and East European Studies at Georgetown University, USA)
Angela Stent (via interpreter): Thank you very much, Mr Prime Minister. Notably, we have discussed the issue of Afghanistan with our Russian colleagues. I would like to ask you the following question. Russia has recently helped the United States a lot, it has facilitated easier access into Afghanistan, and this was very important. NATO forces are to be withdrawn from Afghanistan in 2014, and the situation will be very fragile. I would like to know your opinion of how Russia, the United States and other countries in the region could cooperate before NATO withdraws its forces and after it.
Vladimir Putin: We believe that the international forces fulfill and play a positive role in Afghanistan. Although they don't operate very effectively, especially in the context of combating the drug threat, on the whole they certainly play a positive role. It is no coincidence that Russia has made an unprecedented decision to agree to aviation and ground transit ...
