Question: Mr Putin, a year ago you knew that you would almost certainly have to run this country. During the time that has passed since then have you shed any illusions? You had an idea of the job you were taking on and of the situation in the country. But then the hard reality set in. Can you say that some of your ideas about what was happening in the country have proved to be mistaken?
Vladimir Putin: As regards illusions and disappointments, probably not. And why should I be disappointed? Three months after the moment you mentioned I was the President of the country. There might have been some disappointment back in 1996 when Anatoly Sobchak and we, his team, got a beating in the St Petersburg elections. At the time, though I was not the number one person in the city, I was a senior official, I had many friends, and after the elections I became unemployed without any prospects of re-employment. I had every reason to be disappointed. But to the credit of my friends, and not only friends but just acquaintances, I must say that they were very civil and very kind to me, and even then I didn’t feel disappointed. Still less today. Moreover, before I became President I was Acting President and Prime Minister. So I had a clear understanding of the state the country was in. Nevertheless, the number of problems that arose and that I had to grapple with was great and the diversity of these problems was something of a surprise. Having said that, I think that Jawaharlal Nehru, when he was elected the leader of his country, said he had as many problems as there were people in the country. I had a similar feeling. You know, I never forget that for all the positive trends we have initiated – and they are evident in the economy and in our life, though admittedly these are just trends – for all that I never forget that for the vast majority of our citizens life is very hard, they are poor and this feeling haunts me. I wouldn’t say that it always helps me to take pragmatic, I would even say technocratic, decisions in the economic sphere. This feeling is not always very good counsel, but on balance I think this feeling always helps to take more considered decisions and that is not bad for the leader of such a country.
Question: You said that if a country is to remain an advanced economic power, the GDP should grow by 7%-10%. We made the 7% mark, but then it became 4% – growth is “shrinking”. Oil prices are falling. Are we in decline again? And in general, what is happening?
Vladimir Putin: On the whole, as I have said, the positive trends in the economy are evident. After all, the GDP will grow by 7% or a little over 7%. Industrial output in some sectors has grown by 10%-15% and more, by as much as 30%. Pensions have grown by about 30%, wages by 24%, and real incomes by 9%. It sounds good in percentage terms; but considering the low base from which we started, perhaps not everyone feels it. That is true. And there we have to choose between current social problems and building a sound economic policy. Indeed, during the past months there have been some alarming signs, there is evidence that growth has slowed down and unemployment has increased a little. We have yet to figure out whether these are temporary fluctuations due to the end of the year and the approaching holidays or due to something more serious. Anyway, this is something the Government, the Presidential Executive Office and I must pay attention to. But on the whole, I would say the balance is positive. And the main thing is that we have succeeded in not wasting the petrodollars you have mentioned. Unfortunately, the structure of our economy and foreign trade is to a large extent connected with the export of energy resources. But I repeat, the Government and the State Duma must take the credit for making some very reasonable economic decisions. Above all, I am referring to the adoption of the Tax Code, which will shortly be finalised, the introduction of the flat income tax rate of 13%, and a significant reduction of the tax burden on the economy as regards the sales tax and the taxes on various types of services. That is an obvious plus in terms of common sense in the economic sphere. Let us look at the flat income tax rate of 13%. Of course, this may not be very fair from the social point of view. How come the rich and the poor pay the same income tax? But we were guided not by social considerations, but by economic logic, proceeding on the assumption that we should at long last use not coercion but economic levers to enhance the credibility of the Government. And secondly, we sought to bring a large part of the economy out of the shadow. It is our hope that it will increase tax revenues. And I could mention some other equally sensible decisions. All this has generated some positive social expectations. That, I think is the most important thing.
Question: Are these efforts enough? And in general, does a concept of state regulation of the economy exist? What the state should regulate and what it should not?
Vladimir Putin: You have touched upon one of the fundamentals of our activities. We have to take decisions of principle in this sphere and understand what the role of the state consists in. Much has been said about it. I would like to explain my own position once more. I think that part of the economic policy should seek to maximise the economic freedom of individuals and legal entities. And by state regulation, of course, we should mean the ability of the state to enforce the rules and terms that it works out. First, to ensure that competent decisions are made, that the decisions are well grounded. And second, we should ensure that they are fulfilled. This is what state regulation is all about.
Question: There has been a lot of talk about the oligarchs. What is the role of the oligarchs? What mechanisms do they use to influence economic and political decisions, and should there be oligarchs in the first place?
Vladimir Putin: In this country the word “oligarch” has been used with regard to representatives of big business who are trying to influence political decision-making from the shadows, secretly from society. There should be no such group of people. But business leaders do not only have the right to exist, they can count on Government support. As for those who pull the strings from the shadows, I don’t see such people around me. I think that is a plus.
Question: Which leads me to the next question. Many claim that a market economy is taking shape in Russia, but the main players in the market will be mainly state-owned companies. In other words, we see the emergence of classic state capitalism, and the truly free market will be somewhere at the lower end – for the small and medium enterprises.
Vladimir Putin: I have already answered that question. I can repeat myself. I have said that the state should ensure a maximum degree of economic freedom for individuals and legal entities. That must answer your question. And the state should work out the rules and enforce them. As regards state-owned companies, I don’t think that the state-owned companies and the state as the owner can effectively perform their economic functions if they follow the logic you have just set forth. The state is by no means always an effective owner, as has been brought home to us repeatedly.
Question: I understand that your general impression of what is happening in the economy is positive. And this leads me to my question. When you became President, expectations ran high. It seemed that substantial improvements would happen very quickly. At the same time, it was said that Prime Minister Kasyanov was a “technical prime minister” and that the Cabinet would be replaced after a while. What is your feeling today? Are you satisfied with the Government team?
Vladimir Putin: First, I have never said that Mikhail Kasyanov was a “technical prime minister”.
Voice: It wasn’t you who said it.
Vladimir Putin: We have the law on the Government which determines the prerogatives of the Government and the Prime Minister and the duties of the President, the duties of the Duma, the Federation Council and other constitutional bodies of power. I haven’t the slightest doubt that the Government and the Prime Minister are coping with their duties today. Is everything functioning ideally within that structure? No. We can’t say that. And indeed for a team to work in a concerted and efficient manner it needs some time. People need to dovetail and understand what their motives are in making decisions and they need to adapt to each other psychologically. I think such a process of consolidation is taking place in the Government. The Government is doing a fairly effective job. But it does not mean that nothing needs to be changed there and that there is no room for improving that mechanism. So, I discussed this topic with Kasyanov and I have asked him to see how the work of the Government can be made still more effective. He agrees with me that there is something to ponder and he has some suggestions to make. But this is not connected with dissolving the Government or any dismissals. I think political stability is worth a great deal. In recent years we have seen frequent reshuffles and it takes a long time for people to become familiar with the subject matter and assume their roles and determine their tasks. This is unjustified waste. I will try to avoid such waste.
Question: Are you happy with the heads of security agencies and the team in the broad sense – the Government and the Presidential Executive Office?
Vladimir Putin: If a person is happy with everything, he is a total idiot. A healthy person in possession of his faculties cannot always be happy with everything. Of course, I see many flaws. I think a lot will need to be done for the security agencies to work more effectively. And we will do it, but without revolutions. And without personnel shake-ups.
Question: Speaking about the team, I have a feeling that the recent discussion about how to reorganise RAO UES of Russia has been tinged with scandal. It was discussed at a meeting of the Government, and after that meeting Anatoly Chubais and Andrei Illarionov accused each other of lying. I have two questions in this connection. Do you personally favour a reform of RAO UES of Russia as proposed by Chubais or in line with some other plan? Because each of them invokes you to prove his point.
Vladimir Putin: First, if they refer to me, it means the President’s word counts. That is already a plus. Another evident plus is that such major issues, which without exaggeration affect the destiny of the country because RAO UES is the underpinning of the economy, are not resolved in secrecy, but in an open discussion. It is true that such big corporations as RAO UES, Gazprom, and the Ministry of Railways are in need of restructuring. It is long overdue. The problem is how to do it, which road to follow. You asked me whether it should be done the way Chubais has proposed. My answer is no, we should proceed according to common sense.
Voice: Mr Chubais would be hurt to hear this.
Vladimir Putin: There is nothing to feel hurt about. I have immense respect for Mr Chubais. But he is the head of a company. World practice shows that a company can do a good job of changing and restructuring itself, but in doing so it pursues its own interests.
The Government should take a decision in the interests of the whole state. But for a final decision, the Government should pay due attention to the issue. We should, while standing on our Russian soil, to quote Vitte, make sure that we take into account international experience. We should bring in world-class experts, such experts exist. There aren’t many of them in the world, I think there are three or four firms in the world specialising in restructuring the energy sector and companies. These resources should be enlisted, and then we should consider the situation and discuss it thoroughly, including with the regional leaders, before taking the final decision. This is a case when we should proceed according to Hippocrates: do no harm. The problem was already up for discussion at the Presidium of the State Council, and I am going to bring it up again very soon. All the members of the State Council have relevant documents. And I have asked them to join this work and bring in experts to think again and propose to the Government their vision of the problem and how it is to be solved. So, all the opinions will be taken into account: those of Anatoly Chubais, my advisor Andrei Illarionov and regional leaders and, I repeat, international experience. The Government will take the final decision on the strength of all this.
Question: I have a feeling that this scandalous situation may end up being resolved in a purely bureaucratic way. Two high-ranking people say opposite things and accuse each other of lying, and everybody is waiting to see which of them the President will get rid of in one way or another.
Vladimir Putin: I think such drastic actions are unacceptable in this kind of situation. Both are prominent personalities, they have a good reputation as professionals, they have their own views on the acute and vital problems that are being discussed. I don’t see any catastrophe there. I don’t think it should be dramatised. Let them fight it out and defend their own points of view.
Question: So, can it be said that you trust both of them as specialists in their own fields?
Vladimir Putin: I trust both of them.
Question: You have spoken about the “dictatorship of the law”. One has the impression that as part of the effort to put things in order, small and medium business is coming under massive pressure, which amounts to extortion. I think it is one of the major risks.
Vladimir Putin: I absolutely agree. It is true that small and medium-sized enterprises are being stifled by bureaucracy and taxes, and a lot needs to be done to cut down on bureaucracy, to enable these enterprises to breathe and to become the backbone of the economy, like in many other countries. A number of meaningful measures connected with so-called inspections and so on are planned in this sphere. The experience of Moscow can be quite useful. I think that the Moscow Administration has hit on some good solutions connected with protecting small and medium-sized enterprises, including the issue of endless inspections. A bill has been proposed on these supervisory activities. A lot needs to be done in the sphere of taxation.
Question: Debt is a critical economic issue. What is the situation with our debts? Some say we are able to pay all the debts, others say we are not.
Vladimir Putin: You must always pay your debts. The question is how and when to do it. We can do it only on the basis of the country’s main economic law, which is the budget. My own view is that putting off the payment of debts endlessly is not very pleasant for the morale and not good for the economy. Because the rescheduling options we have been offered up until now are not good for us economically: the interest rates are too high. If we follow that scheme, we will pay and pay endlessly and never pay up. It will be a heavy burden on our budget and will create an unfavourable image of Russia in the world markets.
The problem is how to find a mechanism that would suit both our partners and us. One recent suggestion, which I think has met with a positive reaction in some creditor countries, is that while we are ready and willing to pay our debts, it would be practicable if these payments returned as investments in the Russian economy. There are details and nuances, but this is the basic scheme. The scheme was proposed by German Chancellor Schroeder at a meeting with Mikhail Kasyanov in Berlin recently. I have expressed similar ideas. I think it is good for our creditors because we will be paying our debts. And it is good for us because we diminish the monetary overhang in our economy, meet the macro-economic budgetary targets and keep inflation at bay. It is good for our creditors because they get money and because by investing in our economy they gain a foothold in the Russian economy. And it is good for us because we attract investments. In short, if our partners and we accept that idea, it has a good future. But we must proceed from the real situation that is taking shape in the Russian economy.
Question: Mr Putin, the outgoing year has seen sweeping political reforms. There haven’t been such political changes since 1993. Some see it as a positive and democratic trend and others as a negative trend that increases authoritarian elements.
Vladimir Putin: You mean what has been done and how I assess the changes in the political sphere?
Voice: Yes, the federal reform and how society has responded to it.
Vladimir Putin: What has in fact been done? Seven federal districts have been established and the President’s envoys there have been appointed. That is the first change in the internal political sphere, in the federal relations. Secondly, the principles and procedure of forming the upper house of Parliament, the Federation Council, have changed. Up until now it was made up of the heads of regional legislatures, but now it has been decided that it will be representatives of the regions. The leaders themselves will not be members of the upper house. These decisions, I think, are long overdue. I spoke about it in my annual address and I described the situation in Russia at that time, and to a large extent at present, as revealing signs of a decentralised and not a federal state. In reality what has happened? The Government proclaimed it had some federal functions in the regions, but in reality they were not performed by the federal bodies of power and administration in Moscow. Not to be left in the lurch, the regional leaders made the only correct decision: they picked up the functions of the federal Government and began to perform them. And no one can hold it against them because the federal functions in the regions were often simply neglected. If the building, for example, of the Prosecutor’s Office, the law court or some other federal body is not repaired, who will do it? The local government. They had an influence on the processes at that level of government in the country. All that led to a shift of power away from the federal centre and diluted the common economic and legal space. It became one of the main problems in the country.
So, when we thought about where to begin in the economic sphere we came to the conclusion that nothing could be accomplished without effective instruments for the conduct of this policy. You know, when I met with business leaders here or abroad only half a year ago the first question I was always asked was: will you ever put your country in order? And foreigners asked, will you ever have a common legal space? Or are we going to have, as they used to say, Kaluga laws and Tambov laws? Yes, local conditions must be taken into account. Yes, some issues should be regulated by local laws, but there must be a common legal framework, something we haven’t had up until now. I can tell you that 25% of all laws and supporting legislation were found to be out of compliance with the Constitution of the Russian Federation. Twenty-five percent! Today I can report that much of the legislation which previously contravened the Russian Constitution and the federal laws has been harmonised with the Constitution of the Russian Federation. And another question I was frequently asked was this: how did you mange to get the regional leaders in the upper house of Parliament to vote against themselves, as it were, and pass a bill whereby they would no longer be members of the upper house? It is a unique situation. Nobody engaged in any arm-twisting. Nobody forced them to pass that decision. Yes, I firmly stated my position, I did it openly and publicly. But the result came as a surprise even to me. You know why? Because they came to realise and feel that an unregulated federal sphere impeded the development of the state and, first of all, the regions themselves. It was a responsible decision on their part. I initiated it, but the decision was theirs. So I think what has been done by way of restructuring the Federation Council is reasonable and right. Now as regards the President’s representatives in the districts. I spoke about it at the very beginning. I can repeat it. The President’s representatives in the districts should not interfere in the jurisdiction of the local executives. We are gradually moving away from the decentralised state, but we should not fall back on Soviet-style supercentralisation. That would be a mistake too. We should maintain the authority and the powers and give leeway to regional leaders to solve the major issues in their territories. But that is not the main thing. The main thing is that for the whole mechanism to function more or less smoothly we must see how to improve another major component, local government. When I visited Alexander Solzhenitsyn, we discussed that topic at length; and I must say that he has some ideas that can and indeed must be considered. Local government should be closer to the people so that the people who elect local leaders could demand that they perform their duties and obligations, not like it recently happened in some Far Eastern regions. And the second component is that local government should provide support and at a certain level merge with the federal level of government in the regions. We have not yet achieved such harmony.
Question: But I would like to hear your answer to the following question. There is this fork in the road: democracy and authoritarianism. In which direction, do you think, Russia has been moving this year?
Vladimir Putin: Authoritarianism is neglect of the law. Democracy is compliance with the law, because the law expresses the will of the country’s population, which is represented by the deputies of the State Duma and members of the Federation Council. If we comply with the law passed by the legitimate body of power, our democracy is alive and well. If we don’t and if the law is replaced by wilful decisions of individuals, this is wrong, this is authoritarianism. I don’t think the situation today should give cause for alarm in that way.
Question: And what about the State Council? What is the use of that power body? It is an advisory body, I understand that, but many members of the State Council want to see its constitutional powers expanded.
Vladimir Putin: There is nothing wrong with that. Everyone wants something. If people no longer want anything, that would be a real disaster. As for the State Council, I can say that at present that advisory body is very important for me. It gives me a chance to have regular meetings and contacts and to communicate with the heads of regional governments. Such direct contacts are very useful. Besides, it is a body where certain important national decisions can be put through a trial run, as it were. For instance, we have mentioned the restructuring of RAO UES. It was not by chance that I put the issue before the members of the State Council Presidium. Because it is very important for me to know how the proposals made by RAO UES and by the Government will impact the regions and the life of ordinary people. Regional leaders are more familiar with the problems of the ordinary man. So, I think the State Council has a useful role to play in terms of preparing large-scale issues both for the Government and for the legislature.
Question: Couldn’t the same be done through the Presidential Plenipotentiary Envoys?
Vladimir Putin: It could be done, but I think the President should communicate directly with the heads of regions, and it is a mechanism for direct communication. And make a note of this: the Presidential Plenipotentiary Envoy performs federal functions in the regions. And I want to communicate directly with the heads of regions within their scope of authority. And these are somewhat different things.
Question: Now a question about the State Duma: how effective is the legislature, considering that today, as before, its plenary sessions are far too often devoted to political declarations and discussions?
Vladimir Putin: These are inevitable drawbacks in the work of any legislative body in which the views of political parties are vividly represented, even though they are not yet properly structured. But on the whole, I think the State Duma and the Federal Assembly in general are doing a more effective job than in previous years. During the past year we have managed to pass some bills that we have been unable to pass for years, for example, the Tax Code. Next on our agenda is the Labour Code. In think that will be passed too. The land question is a painful issue, it is still outstanding, but the Duma is about to resolve it together with the Government. Look how the Duma is working on the country’s main economic law, the budget. It has been passed on time. That has never happened before. In spite of all the arguments and strain and emotions, problems are being addressed. And that is very positive.
Question: During one of your trips you were asked about the opposition and you used a very interesting formula: either they are hooligans, and if they are not hooligans, they are the opposition. I didn’t quite understand that. Can I ask you bluntly, do you think that there is an illegal opposition in Russia, the opposition that seeks to overthrow the present administration? And is there a legal opposition?
Vladimir Putin: Judging from what happens sometimes, for example, the blowing up of the monument to Nicholas II and similar things, one can say that there is an illegal opposition. But I don’t think they have the slightest chance to achieve their goals in today’s Russia by such means. I think it is absolutely impossible. As regards the legal opposition, things are more complicated. We do not have a structured political life in the country. It does not exist because we do not have stable national parties. They are more like political clubs. But the basis for the creation of such parties exists. If the law on political parties is passed soon and if they manage to gain support not only within the Garden Ring, but also in the regions, if they manage to work there effectively, and if these parties originate in the regions before they reach the Garden Ring, in that case we would be able to say that the Government is formed on purely party lines. And then there will be a clear legal opposition which disagrees with the proposals and ideas and the policy pursued by the Government. As of today, we do have a legal opposition, but because the Government is not formed strictly on party lines, but mainly on professional lines, obviously when decisions are taken, representatives of the same political forces may agree on one issue and disagree on another. When dealing with economic issues, we often are confronted by the left-wing opposition. When dealing with other issues, the Government is criticised by the right-wing parties. Both act as opposition on concrete decisions made by the President.
Question: Do you think the Constitution should be changed? It was reported the other day that one of the drafters of the 1993 Constitution has prepared a new edition. And it proposes substantial changes, including a Government formed by the parliamentary majority, while the President would perform mainly the functions of guarantor of the rights of citizens and law and order. What do you think about it?
Vladimir Putin: When we came to think about the federal reform and the establishment of federal districts and the principle of forming the Federation Council, our aim was to do everything so as not to touch the bedrock principles of the Constitution, and we have managed to do it. Even though it would seem to be impossible to solve these problems within the existing framework. I do not believe that all the potential of the Constitution has been tapped. It contains very profound ideas, and they are couched in competent legal language, so I am not sure that we should be in a hurry to change the Constitution.
Question: Mr Putin, we can’t avoid the Chechen problem. This Chechen campaign is into its second winter. What are the military and political results as of today? How soon will a radical shift from purely military methods to political methods take place?
Vladimir Putin: First, a couple of words about the general problem. You mentioned the second campaign. There wouldn’t have been a second campaign if it hadn’t been imposed on us. That is obvious. During the so-called first campaign the independence of Chechnya was at issue and eventually Russia agreed to this, and I don’t mind saying that it agreed at the cost of national humiliation, but it agreed to this. And what did we get? We got not an independent state called the Chechen Republic, but a territory occupied by armed gangs and religious extremists, a territory which started to be used as a bridgehead to attack our country and destabilise it from within. Not only Russia, but any other state would not tolerate such a situation. We showed patience for a long time. There was no need to attack the neighbouring republics in order to protect the independence of Chechnya. It was an aggression which spilled out into another region of the Russian Federation. Even then, we did not immediately decide to launch the operation in Chechnya. It took four attacks on Dagestan and explosions of residential buildings in Moscow to finally convince us that we wouldn’t be able to solve this problem without liquidating the terrorist bands inside the Chechen Republic. It was only then that we launched the operation. Today, I am absolutely convinced and I think this is shared by the overwhelming majority of our citizens, it would be an unpardonable mistake to go away and abandon the effort. But where do we go from here? We should complete the job in military terms. And I think we should do what we have already started to do. We have permanently stationed the 42nd Division there, a very well trained and better equipped than any other divisions. We have practically completed the deployment of the interior troops brigade. Special units consisting of professionals will fight terrorists in some mountainous regions. So, professionals must be on the cutting edge of this dangerous effort. At the same time, we should gradually normalise the situation there, create the bodies of government. They didn’t even have normal civilised courts there. What kind of courts did they have? Executions in city squares, whippings: that was all the justice system they had. And it was the same in all spheres of government. All that should be restored. And it takes time. The main problem to be addressed today is social rehabilitation and economic reconstruction of the Chechen Republic. The long-suffering Chechen people must at long last understand and support the efforts that Russia is exerting to make that region of Russia viable again. Part of that task has already been solved, but much has yet to be done in order to gain the trust of the population. I assure you, by no means all of them are committed to resisting the efforts of the federal Government. I assure you that many members of Chechen society, many Chechen citizens feel that they have been cheated by the militants. They understand that they have simply been used and exploited for ends that have nothing to do with the interests of the Chechen people. That is how I would describe the situation today and I would like to emphasise that the focus now will be on social rehabilitation and economic reconstruction.
Question: And who will take measures to build trust between the civilian population, between Chechen women and men, not all of whom are militants, and the military? It is a very delicate issue for the Chechens.
Vladimir Putin: It is up to the Chechens themselves.
Question: And the military?
Vladimir Putin: The military too, of course. But the problems of Chechnya can only be solved with the support of the Chechen people themselves. The military do a lot of things there, even things the army is not supposed to do. To this day pensions and wages to public sector employees in Chechnya are provided by financial institutions of the Defence Ministry.
Question: And who is the head of Chechnya?
Vladimir Putin: The head of Chechnya? Do you have any doubts? Kadyrov.
Question: I have no doubts. I haven’t been to Chechnya myself, but those who have travelled there and who have links with the Chechens say that he controls only part of the territory, some obey him and some don’t. And conflicts flare up over this.
Vladimir Putin: And what do you expect? After 10 years of chaos a man comes along, even if he has the trust of the people, even if he is the former mufti, the religious leader of the republic, do you expect him to restore everything and get everything under control within a few months or a year? Do you think it is realistic? Of course not. We will have only one power centre in Chechnya, and that is Akhmad Kadyrov. He has been appointed by the Russian President, and he will perform his duties until we adopt other methods of solving this kind of political issues and introduce elections of the head of the republic. Or until he quits himself for some reason or is unable to perform his duties because, I assure you, his job is no bed of roses.
Question: And by the way, what do you think about the recent contacts between the representatives of the Union of Right Forces with people who, I think, are Chechen militants? And Yabloko was also there, I think.
Vladimir Putin: I take a negative view of contacts with the militants. Contacts with representatives of Chechen society in general is another matter.
Question: To be precise, they declared that negotiations should be conducted with the President of Chechnya…
Vladimir Putin: What President?
Voice: With Maskhadov.
Vladimir Putin: The President of Chechnya was elected in violation of the Constitution of the Russian Federation, and for us he is not a legitimate President. But even if one agrees that Maskhadov is the President, his term expires next January. So if anyone wants to negotiate with him, we won’t stand in the way, but I don’t think it is going to be very helpful.
Question: How harmful and dangerous is it to conduct negotiations behind the back of the army, with the people who are fighting that very army?
Vladimir Putin: I think political contacts do no harm. I don’t think it seriously undermines the morale of the troops. Because the troops know that the final decision rests with the President, with me. And I have a firm conviction that all those who have taken up arms should be put on trial. How can we achieve that? There are many ways and all this is to be done by the Armed Forces and law enforcement bodies.
Question: It has been decided that army units in Chechnya will be stationed in villages and not in the field. Why did it take so long to make this decision?
Vladimir Putin: Why did it take so long to make that decision? First, the decision has yet to be tried out in practice. Second, I don’t think it took too long. It simply did not occur to anyone that these militants you have mentioned would unleash terror against their own people. Did it occur to anyone before? Everybody thought that we would never find support in Chechen society. But it proved not to be so. So the militants had to launch terror against their own people. And that put on the agenda the issue of defending those people against the militants. You know the recent tragic event: an explosive device went off in a square: there were civilian victims. You know that many important religious figures were killed there in spite of their age. You know about attempts on the lives of the heads of district administrations in the Chechen Republic. Nobody thought that the federal authorities could find support in Chechen society. But it has been done and it triggered a backlash from the militants. They started killing people. That put the issue of protecting civilians on the agenda, and we will do it.
Question: To what extent has the Chechen experience, including negative experience, influenced the concept of the military reform?
Vladimir Putin: It has definitely influenced the concept because it exposed the structural looseness, as it were. It became clear that much of the spending on the Armed Forces goes into spheres and areas for which there is no need today and it is unlikely that there will be a need tomorrow.
Question: The army must be professional. Is it a final decision or not yet?
Vladimir Putin: The army must be professional. It means that we should give up military conscription. I doubt that we can solve the issue quickly, but it is a valid goal.
Question: A question about the Kursk. Every tragedy is a lesson. What lesson?
Vladimir Putin: Above all, it is a moral lesson, a moral lesson for all of us. What evoked such a reaction in society and what struck the heart of every person was this. First, we all identified with our submariners, everybody felt as if it was he himself down there. That is why it was so painful. Then there was the sense of powerlessness. It was the most terrible thing. Because the submarine was there, we knew where it was, and nobody could do anything about it. But it was also a lesson in purely practical terms. In terms of the need for restructuring the army, the need for military reform. We must know the economic forecast, we must know how much money we will have in our budget in the next 10 years and how much of it we can spend on the defence and on what areas of the defence. What we need is not a huge and bloated, but a small and mobile highly professional well-trained army, which is well equipped.
Question: You have said more than once that all the Russian problems are within the country, yet you have made many foreign trips in a short space of time. Those were obligatory international events and countries with which Russia has a common border. What is the overall logic of Russia’s contacts with other countries?
Vladimir Putin: First, you rightly said that those were obligatory international trips to attend events that I had to attend. Besides, some debts built up over the past 10 years had to be paid back. I mean diplomatic debts, because several heads of state and government had visited our country and it was our turn to reciprocate. In some countries Russian leaders hadn’t been seen for 20 years. For example, in Mongolia. And yet it is our close neighbour and not the least important country for us geopolitically. But speaking about priorities, they are based on internal policy priorities and pragmatic economic interests. If you noticed, I have visited either the countries with which we have a common border or the countries which are our major partners, mainly the industrialised G8 countries. I must say that a whole range of issues was outstanding, and that accounts for a measure of activity. I would say more: in the Soviet times we had so scared the rest of the world that it led to the creation of huge military political blocs. Did it do us any good? Of course not. But 10 years ago we decided for some reason that everyone was so fond of us and that we could sponge off the G8 countries. We didn’t have to do anything, we thought, things would take care of themselves. This turned out not to be so. We have to get rid of our imperial ambitions on the one hand, and on the other hand, we should have a clear and precise notion of where our national interests lie. We should promote these interests and formulate them clearly. But all along we should maintain good relations with our neighbours and partners. To create such an atmosphere we had to explain our actions and to communicate.
Question: A related question. Since your foreign trips this year do not take in any former East European socialist countries, does it mean that they are no longer our strategic partners and that we will deal with Western Europe over their heads? Formerly we were friends only with Eastern Europe and now will we be friends only with Western Europe?
Vladimir Putin: No, that is not the case. All it means is that Russia will not impose itself on anyone. We will work with those who want to work with us. Many East European countries, just like we 10 years ago, by the way, have reoriented their foreign and internal policies and economic policies towards the West. They are not to blame; we tried to do the same ourselves. Now there is a growing awareness that the former interstate relations should be absolutely free of ideology, but they should be used to derive mutual benefit, above all from the development of economic ties.
Question: What about the rogue states? You have been to Cuba and to North Korea. The President of Iran is to visit Russia. How will Russia build its relations with these countries?
Vladimir Putin: In former times our relations with many of these countries in the economic and political fields were based on ideology. We should get rid of ideology in these relations, but we should take advantage of the level of interstate relations that existed then. The main thing is not to let anything slip away from us. You have mentioned Cuba. Cuba’s debt to Russia is estimated at $22 billion, though our Cuban partners have a different estimate. Some facilities, and there are a good many of them in Cuba, have not been completed. And their construction has been put on hold or abandoned. Last year alone we spent $30 million to mothball an unfinished nuclear power plant in Cuba. Are we going to do that every year? What are we to do about all this? It is high time to revisit the issue, to look at what has happened over the past years, how much has been invested, and while preserving the good relations and a high level of interstate relations to clear the logjams that were formed recently and move towards a constructive path of development, to look to the future and think about what to do next. In Cuba, for example, 75% of the nickel industry is controlled by the Canadians, who are doing very well there.
Voice: There is no way we can get back there.
Vladimir Putin: The latest negotiations show that it is hard to get back there. There are problems already. In the tourist industry Spanish agencies are active and French agencies are active. We have no presence there. And this is despite the fact that a good start had been made between our states, but for some reason we are shy of building on those achievements.
Question: Does that apply to Iran and Iraq?
Vladimir Putin: It applies to that region too. There is a distinction there because we have to take into account the concern of the international community connected with security problems. As a permanent member of the UN Security Council, as a member of the G8 we must be mindful of this concern. But, I repeat, we should not forget our national interests. Serious changes are taking place in Iraq and Iran. In Iran the change is obvious. You mentioned our foreign trade links, and the Federal Republic of Germany, Hermes, I think, opened a credit line for Iran of 1 billion marks or even 2 billion, but I may be mistaken. Anyway, this gives you an idea of the level of relations between Europe and Iran. And why should we be shy?
Question: The advent of the new US Administration has caused some moaning among our political elite, which is used to dealing with the Democrats. The American position is expected to harden because the Republicans will be tough on Russia.
Vladimir Putin: I find it hard to agree with you that we should expect a decline in Russian-American relations. My analysis of recent history shows that whenever the Republicans came to power in the United States there was no decline in Soviet-American relations. I don’t see why American-Russian relations should deteriorate. We have always been able to find the right tone and the right approach to dealing with the Republicans. What the American President-elect says – and he says that we can start building our relations in the security and defence field from a clean slate because – and this is very important – the United States and Russia are no longer enemies or adversaries as in the former Soviet times. Isn’t that a positive development? I think it is a serious statement that gives grounds for looking to good relations between Russia and the United States in the future. I think we made a good headstart, the headstart built by the Clinton Administration. I have already said that I would like to hope that the new Administration will take up the relay. We are hoping for it and we are ready to cooperate in a positive way.
Question: We have not yet discussed the problems of the CIS. There is perhaps a host of problems. If you were a doctor, would you define the past year in the life of the Commonwealth as a recovery or a deterioration?
Vladimir Putin: In our relations with the CIS countries we are passing on from political formalities to a realisation that we need a permanent mechanism of consultations within the CIS. Secondly, we need an instrument to enable us to create conditions for closer integration, above all on economic issues. As you know, we are developing relations with the CIS countries in various formats: on the uni-lateral, bilateral and multi-lateral basis. We miss no opportunity to bring our positions closer and to make our mutual relations more beneficial and more effective so that they bring real benefit to the people who live in our countries and in our economies. But let us not forget that more than 20 million Russian citizens who consider Russian to be their native language live in the former Soviet Union countries. So for us the relations with the CIS, not with the CIS as an organisation but with the CIS countries, have been and will remain the number one priority.
Question: We are withdrawing all our bases from Georgia, including the areas that are not controlled by the Tbilisi authorities… Yet Georgia’s good faith with regard to our actions in Chechnya is questionable.
Vladimir Putin: Why did we decide to withdraw our bases from Georgia? We made that decision after Georgia raised the problem itself. Georgia is an independent sovereign state, and it does not want Russian bases on its territory. Whether it is good or bad for Georgia is up to the Georgian leaders to decide. This was not our decision. The only thing that worries us is that it shouldn’t happen the way it happened during the withdrawal of our troops from East Germany when hundreds of thousands of people found themselves stranded in a bare field without infrastructure and without normal accommodation. It takes some time. And we are ready to do it and we will do it by agreement with the Georgian side. And we will be guided by the norms of international law and friendly relations with Georgia.
Question: There is a sense that the relations with Ukraine improved dramatically in the past few days.
Vladimir Putin: That is a wrong impression.
Question: Haven’t they improved?
Vladimir Putin: Let me explain where I think you are wrong. They have improved dramatically, but not just recently. They improved dramatically after my meeting with the Ukrainian President in Sochi. They improved dramatically because there we agreed in principle that in the interests of the Russian and Ukrainian peoples we would resolve the outstanding problems built up over 10 years. These are above all economic problems, which gave grounds for saying that our Ukrainian partners have not always behaved properly with regard to some aspects of the gas issue. And I think President Kuchma made an absolutely correct and economically valid decision to settle the energy dispute. It makes Ukraine an absolutely civilised partner not only for us but also for the European Community. It makes Ukraine an independent partner in dealing with European energy problems together with us. We provide the product, and they can act as an independent player in this field, as a country offering transportation services, pipelines, and that creates an atmosphere of trust between our countries, which is the most important thing. It enables us to come to grips with other issues, in particular, in the field of cooperation. We have massive cooperation with Ukraine in the defence industry. In some sectors Ukraine gets up to 80% of components from Russia and we get up to 80% of components from Ukraine. It enables us to discuss and solve energy issues in the interests of Ukraine without forgetting the interests of the Russian Federation. It enables us to coordinate our efforts in a more balanced way in the international arena. So I would say that a qualitative change for the better occurred in the relations between Russia and Ukraine during the past months.
Question: I think my colleagues would agree with me. Being journalists and representing, as it were, all Russian journalists today, it is our duty to ask you what you think about the freedom of speech and freedom of the press in 2000. Are we going to see both situations deteriorate dramatically in 2001?
Vladimir Putin: No. I think what journalists should pay attention to is the economy.
Voice: The economy of their own media outlets?
Vladimir Putin: The economy of the country. The economy is the only factor on which they should depend. Otherwise they should be independent from everyone. They should develop on their own economic basis. To have such an opportunity it is necessary to preserve the rate of growth and see to it that the state should guarantee the conditions for the normal functioning of the economy. There should be no fears about an imminent tightening of the screws. I think that would be counterproductive for the Government itself because society wants to have a free press.
Question: Two or even three more questions. How would you like the Russian citizens to see you? Why am I asking this? Because some Russian citizens have already written books about Volodya when he was little, and I hear that a sculptor has already cast a small bronze sculpture of you. Aren’t you afraid that one day you will come to some Russian city and see a statue of Mr Putin in the central square with his outstretched hand showing the road to the bright future?
Vladimir Putin: I have never thought about it. But I understand that when somebody somewhere does something like this he has the best of intentions. And he does it because he likes me. I would like to thank them for it, but I would also like to ask them not to do it. I would ask them not to write books or cast busts. I cannot do anything to stop this, but I do urge you not to do it. I think that is inadmissible.
I would like the people to see me as a person they have hired. They have hired me to perform certain functions and professional duties over a certain period, and I would like them to see me as a person with whom they have signed an employment contract for four years. An employment contract is signed on the results of elections. The elections took place in March of this year. The employment contract, under our Constitution, is signed for four years. Time will tell what will happen after the mandate expires.
Question: The last decade of this century was a difficult one for Russia, which saw global changes. Everybody recognises that Boris Yeltsin, the first President of Russia, contributed greatly to these global changes. Do you have a feeling that Mr Yeltsin has some skills which you would like to have too, or you would like to have had them from birth? They say that Yeltsin has very powerful intuition.
Vladimir Putin: First, I would like to say that the number one of any level always attracts great attention. One can always find something wrong. I think that Boris Yeltsin, looking back, himself, on the past years, would have done something differently and more efficiently, but one thing you must hand to him. Unlike many other people, he was a person who could assume responsibility. That is a crucial quality for a leader of any rank. He was not afraid to take on responsibility. I have to tell you that he never imposed decisions on me, even when I was effectively his subordinate, when I was the Prime Minister and he was the President. He has his own way with people and it appeals to me very much. And of course he does not impose any decisions on me today. But it is true that he has a powerful intuition, and he has vast experience of international relations. I took on board and used some of the things that we discussed with him, but not because he told me to do this or that, he was simply thinking aloud. I have poached some of his ideas and used them.
Question: And perhaps, the last question, it’s about the coming New Year and the new century. Do you have a special feeling for this holiday?
Vladimir Putin: It was a very intensive year for me, and in general I am used to working hard, and if the pace slackens I feel ill at ease. But this year has been particularly intense, at least for me. As for some special feelings and emotions in connection with the onset of the new century, frankly, I don’t have any, I haven’t had time to think about it. But I simply like New Year as a good holiday which generates expectations. In my opinion the results of the last month of the past year give grounds for a positive view of the future. I would like this mood to be shared by all Russian citizens.