Official Kremlin Int’l News Broadcast
June 17, 2005 Friday

PRESS CONFERENCE ON RUSSIA, EUROPE, CIS WITH EFFECTIVE POLICY FUND
PRESIDENT GLEB PAVLOVSKY AND CHIEF EDITOR OF EXPERT JOURNAL VALERY
FADEYEV FULL TEXT RIA NOVOSTI, 11:00, JUNE 16, 2005

Moderator: :Any more questions, please.

Q: Radio Liberty Azerbaijan service, Roman Agayev. A question for Mr.
Pavlovsky. Russia is withdrawing its military bases from Georgia.
This is a fact. Do you think that their transfer to Armenia, I mean
the transfer of Russian bases to Armenia is logical, as officials
have stated? Or is it a forced measure and one can also see a
geopolitical context? That’s the first question. And how will it all
reflect on the settlement of the conflict between Armenia and
Azerbaijan given that official Baku, in addition to expressing its
discontent with continuing Armenian aggression against Azerbaijan,
has also lodged an official protest with the representatives of the
Russian authorities, that is the embassy of the Russian Federation in
Baku? What can you say about it?

Pavlovsky: First, the movement of Russian bases is on no account an
attempt to influence the context of the territorial problems between
Azerbaijan and Armenia. It is an action that does not in any way
affect the resolution of the Karabakh problem, the negotiating
process. It maybe put in such a context emotionally, but this is not
the right way to approach the issue. There is no such implications in
Russian actions.

Regarding your second question. Do we need a security architecture in
Eastern and Southern Europe, in the Caucasus-Caspian hub or not? Or
do you think that security settles in by itself, like good weather?
It never happens that way. Security is an intricate architecture. It
arose after the collapse of the Soviet Union, a new security
architecture arose in the Caucasus as a result of wars, yes? We have
for some time now seen a peaceful situation in the Caucasus,
comparatively peaceful, peaceful with big reservations. Nobody wants
to be back to the early 1990s, I hope. So, Russia should seek to
strengthen the security architecture in Eastern Europe especially now
that revisionist forces have emerged which are trying to revise it.

The revisionist forces, of course, include the Georgian leadership
which does not hide its penchant for geopolitical and possibly even
military improvisations in the Caucasus whose outcome is beyond
conjecture. And of course, the future regimes of unrecognized states
in the Black Sea region is unclear. They will certainly be very weak
entities which in a sense will need to be involved in the process of
a new international settlement. In this context, the liquidation —
the creation of a vacuum when Russian troops leave will have the same
consequences as the vacuum of Soviet military power in other places:
the resumption of military improvisations in the Caucasus and in the
Black Sea area. It is a very dangerous situation, we should avoid it
in order to finally regulate the territorial problems in the
Caucasus, including the problem between Azerbaijan and Armenia.

Q: A question for Mr. Pavlovsky. A parliamentary election campaign is
already starting, in a way, in Ukraine. What are the processes of
this parliamentary campaign? Can the East challenge the West and win
the majority in the future parliament and in this way realize its
ambitions? And another question. Yanukovich has spent five or six
days in Moscow. Did you meet with Mr. Yanukovich?

Pavlovsky: I don’t think the Ukrainian election campaign will be
exclusively over territorial differences inside Ukraine. It would be
a very bad result for Ukraine. If it happens, if the 2006 elections
will turn out to be a confrontation between the South East on one
side, and the Center and West of Ukraine on the other, it would mean
a total collapse of the Ukrainian political system. Nobody wants that
outcome.

One conclusion from this — Mr. Fadeyev already spoke about
conclusions today, but I would add one more conclusion from this
political year, namely, that revolution does not provide a solution
of the country’s internal problems. Ukraine, Georgia, their economies
and their social policies, their performance generally, indicates
that very clearly. All the positive things that are happening in
Ukraine amount to a roll back from the revolutionary demagogy of
revolutionary slogans. Everything that is being done to implement
these slogans has dire economic and political consequences. For
example, Russian enterprises, in particular, the Russian human
resource market, are eagerly absorbing Ukrainian manpower which flees
from Ukraine, including people who have lost their jobs on political
grounds. These are not tends or hundreds, these thousands of people.
It’s good for the Russian economy, but it’s hardly good for the
Ukrainian economy.

The economic policy of the new government, which I consider to be
sheer madness, will result in a crisis before the 2006 elections, or
worse. I think a political crisis could be expected not later than
early autumn. And it will determine the look of the new power team
that will contest these elections.

The opposition, obviously, is being too slow strategically. It is
lagging behind. The conflicts within the ruling coalitions today are
much more interesting today than the opposition proposals. This is
the real fact. The opposition should rally not around a personality,
but around a program. So far, a program is not in sight. Mr.
Yanukovich travels a lot inside and outside Ukraine, including
Russia, and he is engaged in political consultations as a prominent
legal opposition politician in Ukraine. He is a high profile,
respected politician and there are no problems communicating with him
on the part of Russian political circles.

Q: I understand you have met with him.

Pavlovsky: You know, I am a businessman and this has nothing to do
with the political aspect of our discussions.

Q: I represent the newspaper Zerkalo Baku. A couple of questions, if
I may. First, a news agency in Baku has reported that you are going
to take part in the PR campaign of the ruling party in the upcoming
parliamentary elections in Azerbaijan in November. How accurate is
this information? Second question. The question of hosting an
American contingent on the territory of Azerbaijan has been under
discussion in Baku for more than two years. Do you think that the
redeployment of Russian bases from Georgia to Armenia will provide
additional arguments for those who advocate the stationing of
American troops on the territory of Azerbaijan?

Pavlovsky: On the first question. Let me say outright that I never
comment on the activities of other members of our milieu, PR
agencies, just out of corporate solidarity. I do not criticize them
and usually do not disclose any information. This is part of business
reality. I am not going to depart from my rule on this occasion. As
regards the second question, America is today a country with real
global responsibility. There is a certain America military security
infrastructure which does not always suit the local security
architecture. In each particular case one should ask the question: is
this or that move reasonable? If for example, the Euro- Atlantic
structure wants to replace the existing security system in Eastern
Europe, what can it give Eastern Europe in return? It’s the same
here: what can an American military infrastructure contribute to
stability in the region? Is it or is it not capable of investing in
stability?

American military presence in Georgia for the time being, quite
obviously, merely increased the tendency of the local administration
to engage in dangerous improvisations in this region, dangerous even
for the American policy goals. Will American presence in Azerbaijan
increase the conflict between Armenia and Azerbaijan? One would like
to avoid it. So, I think the pros and cons of such actions should be
considered. I think the discussion of this issue in Azerbaijan is
useful, but I think that a similar discussion would be useful in
Washington too.

Q: France Presse. Could we come back to the European Union? You have
said that Russia cannot accept a Europe without Russia. I should say
that as far as Western Europe is concerned, including France, the
question of relations between the European Union and Russia is far
from settled and in the debate preceding the referendum there the
question was asked by the French population, though not necessarily
politicians, and indeed the referendum in France was a setback for
NATO because this is very unclear in the Constitution and the French
didn’t want it in the Constitution.

Pavlovsky: Yes. That is correct.

Q: So, the issue of Russia has been raised. Russia is not excluded as
a potential member of the European Union. Having said that, its
membership is under question and the same is true of the form of
membership. But I would like to link my question to what you said
about sovereignty, which was also focal to the debate preceding the
referendum. If you were asked whether or not Russia should join the
European Union, would you have voted for or against such a
Constitution?

Pavlovsky: Well, I think these are questions to be directed to each
of us individually. Russia hears a lot of friendly assurances on the
part of the European Union, reassuring us that of course Russia is
part of Europe and of course we are not isolating you and we are not
infringing upon Russian sovereignty. The question is, what is been
built in this way. What is been built on the basis of this concept?
Does this structure imply restoration of the unity of Europe that was
destroyed in 1914 and further aggravated by 1917 and the Cold War?

This structure does not imply, it simply cannot accommodate,
ideologically, all the countries of the European East, above all
Russia. It proceeds from a unitary concept of Europe which I think,
is a profoundly un-European concept. This is simply not the European
way of thinking. The idea of unified Europe, the idea of European
standard to be adopted by everyone from Greenwich to Karabakh, I
think is absurd. So, of course, I would vote against this idea.

But let me tell you that Russia cannot be indifferent and won’t be
indifferent in the face of the strengthening of this dogma of a
unified Europe. It is dangerous in the long term. In the current
comparatively stable world situation one might feel that there is
nothing wrong with the European Union considering itself to be the
whole of Europe. No harm in that. But if you imagine the situation
20, 30 or 50 years from now you will see that the triumph of that
ideology would lead to conflict, perhaps even a conflict in Europe,
which is dangerous. So, I vote against.

Moderator: And how would you vote?

Fadeyev: How would I vote? What Gleb Olegovich said about unification
runs counter to the Russian tradition and the Russian approach. I was
reminded of the words of an outstanding philosopher, Danilevsky, in
the 19th century regarding unification and sameness. He said that
peoples cannot follow the same path marching in single file. God
created peoples to be different so that they should walk all over the
field. Unification is dangerous because it binds societies, nations
and people. This concept limits freedom. It is not a liberal concept.
It limits the freedom and sovereignty of countries and individuals
because people have to live the way somebody, some bureaucrats they
have never laid eyes on are telling them.

Russia today is in the process of assimilating freedom. In a sense it
is in a better position than European countries because we have still
a lot of distance to cover. In that sense we can even set an example
after a while once the economic and political situation in this
country jells. And we should not take our queue from the European
Union. For several decades we will follow our own path which I think
will be instructive for many other countries, instructive not in the
way it was in the communist times, but instructive in a positive
sense.

So, I vote against, we simply have no business there. We have greater
chances.

Q: (Inaudible.)

Fadeyev: We are not criticizing them. We are pointing out that what
the French have done is very important.

Pavlovsky: And let me stress that the European Union is quickly
adopting some Soviet forms of ideological discipline. If you
criticize the Brussels bureaucracy, it means you criticize Europeans.
That’s exactly what I heard in my young years when one was
criticizing some concrete bastard, that was tantamount to criticizing
Soviet power. So, the European Union is largely a Sovietized
organization and at the same time Sovietizing. By the way, there are
positive sides to this, too, because the European Union’s social
policy is, I think, an ideal version of the Soviet social policy, and
therefore it is very likely that this model will sooner or later
experience a crisis similar to that experienced by the Soviet model.
So, once again, we do not criticize the French, and we do not
criticize France.

But we are facing a new thing. There is a new political animal called
the Brussels bureaucrat, who happens to be the bearer of some
European values. The idea that a bureaucrat is the bearer of values
and we have to listen to his sermons is strange and unacceptable for
Russian culture. We are not ready to regard Mr. Solana as a moral
subject who has a right to teach us something. And these people very
often quote other people who are not liked in Europe. For example,
Mr. Solana — I heard him speak in Poland in May when he put forth
three arguments in support of the European Union. The first argument
was as follows: “We are building a bastion of defense to protect
Europe from the chaos of the modern world.” It’s almost a quote from
the German fuehrer. Actually, it’s a well known quote.

The very ideology of building a bastion for Europe as a special
reality in the modern world, which is to be obeyed by the people
within it and studied by the people outside it is unacceptable to us.
I want to say that one of the objectives of the forum we are going to
organize, and one of the organizers is the Institute of Public
Projection, which is an enlightening organization. I think we need
effective political enlightenment. Russia is entering a period of
political enlightenment in the exact meaning of this word, and it’s
time for us to learn how the country that we are building is
organized, and how the world around us is organized. This is why
enlightening organizations are among the forum founders and sponsors.
One of them is Russian State Humanities University. It’s a well-known
and respected cultural and enlightening organization in Russia. And
we will expand the influence of cultural and enlightening
institutions on policy. To this end we have created a publishing
house, and Mr. Fadeyev brings different representatives of the
Western and European elites over here —

Fadeyev: One of the projects is called Russian Readings. Maybe some
of you have been to some of them. We invite Western intellectuals of
all camps, the left and the right, because the main purpose is not
propaganda but enlightenment, and we want our politicians,
entrepreneurs and civil society activists to listen to them and to
argue with them. About 10 Western dignitaries have already
participated in our readings. Immanuel Wallerstein, a thinker of
global magnitude, there is no one above him, was here in May.

Q: A question to Mr. Fadeyev. Will Russia work out an integral
economic program by 2008? Or, will the government continue dashing
from one side to another? And what role is the current government
playing in this? Does the economic policy depend in any way on its
composition? And what is the probability that the government will
change this year?

Fadeyev: I don’t know what the probability is that the government
will change because it’s not my topic. As for the economic policy, it
is important to understand that an economic policy and an economic
doctrine is not an intellectual product. No matter how effective an
economic doctrine is created by some wise men, it will not work
unless politicians, businessmen and public figures start contributing
to its implementation. So, it is largely a political issue. For
example, the magazine Expert has an economic doctrine, and it has
been published many times, there is enough material to make a
collection of articles and provide it with a foreword and call it an
economic doctrine. We think it’s a good economic doctrine, a liberal
one, it’s a doctrine that clearly states the role of the state, of a
strong state, and so on, but so what?

I mentioned Delovaya Rossiya. I think it’s an organization that is
becoming a leading public organization for the business community.
And unless the understand all the details of the economic policy, why
we need sovereignty, what is liberalism, what is the state or
investment policy, how large and medium-sized companies correlate,
why we need the financial system, unless tens of thousands of people
understand this, nothing will change.

A minister may be sacked and replaced with another minister, but it
will make no difference. And in this respect, we live in a democratic
country, not an authoritarian country for which Putin is often
criticized. If we had an authoritarian country, signals would pass.
But we live in a country with an incomplete democracy. A democratic
country should have many different forces, and it is interaction
between these different forces that will ensure its political
advancement. The lack of such advancement proves in a paradoxical way
that we live in a democratic country. So, I am sure that there will
be economic progress.

It would be extremely important to achieve this progress before 2007
because if it doesn’t happen, risks will grow. The economy is not
stagnating, but it is growing quite slowly. We need not 5 percent but
at least 7.2 percent in order to double GDP, as Putin insists. Russia
can grow at a rate of 10 percent because it has a tremendous
potential for growth. But if the economy does not tap its potential,
it begins to decline. You all remember that it was 8 percent, then it
was 7 percent, and this year we expect 5.5 percent. And we will
approach a critical point in three years with low growth rates. So,
the risks will be quite big.

So, my position is that is that the understanding of possibilities
and big risks by many participants in the process should live to the
change of paradigms.

Pavlovsky: If we remember that Putin’s supporters remain a dominating
political force in the country, and they have more and more
grievances against the government are piling up and I think the
following year will see some claims of a doctrinal, fundamental
character: “Guys, do you have a program or are you at least
fulfilling the program the President set forth in his address?” But
the government in its present shape is something…

You know, I had an experience. When I was in internal exile, I worked
at a Mobile Mechanized Fleet (PMK) and at one point the manager was
seconded to Moscow and power in the outfit was seized by the
secretary of the party organization, who was the chief accountant,
and by the secretary of the local trade union. And it happened to be
the time when money came from Moscow. In the absence of the director,
the funding of all production activities was stopped, but they
generously paid all sorts of loans and staged cultural events under
the local trade union auspices. The authorities in Moscow got wind
that money had not been used properly and recalled the money and the
outfit remained without funding for the whole of the next quarter.

What we have today is a kind of dictatorship of the accounting and
administrative offices which have formed a collation, a coalition of
accountants and property superintendent who are trying to propose an
economic policy for a great country which needs a truly serious
policy. Instead, it is invited to hold a discussion on how much
should be paid for inferior education and health services and so on.
And how much is to be paid out of the Stabilization Fund to make up
for the mishandled first period of the campaign of monetization of
in-kind social benefits.

So, this is a serious problem, I don’t think we want to take that
problem with us in 2007. Today the government is not a force that
solves problems, “it is itself a problem.”

Q: I would like you to explain a phrase in the press release: “A
distinctive feature of the international forum Europe: Results of a
Year of Change is that politicians, including party leaders, are
represented in this forum in their non-political roles as people with
humanitarian and political experience and as public personalities.”
And, I am just curious to know whom you have invited from Ukraine.

Pavlovsky: Just curious? Well, the idea is quite clear because we are
not convening a party forum or calling in political representatives.
There is no need for that. When the lectures, the Russian readings
organized by Mr. Fadeyev are attended by deputies of the State Duma,
including those belonging to United Russia, they do not represent
United Russia there, and their opinion and their questions to the
lecturer are not questions asked on behalf of the Russian
authorities. They are just people who are learning and taking part in
the discussion. It is the same with us, politicians are just people
who have some experience of solving problems. But instead they
constantly offer their opinions on current issues that we are not
much interested in.

It makes sense to discuss how they tackle the problem of party
building. The problems of party building in Ukraine and Russia. It’s
a very interesting question. I, for one, think that Ukraine is ahead
of Russia. It was ahead of Russia before in terms of the depth of
party building and the quality of party building. It proved
insufficient last year, but nevertheless, the Ukrainian experience is
very interesting.

As for who will come, that issue is currently under discussion and I
wouldn’t like to interfere with this process. We will hold a briefing
and tell you who will come shortly before the forum.

Q: A question about the situation in Azerbaijan. On May 25 the
official launching of the Baku-Tbilisi-Ceyhan pipeline took place.
Against this background what do you think about the prospect of Baku
allowing a foreign contingent of troops on its territory — it may be
NATO or American troops — not just for the sake of military presence
in Azerbaijan, but to secure the pipeline because wherever there is
oil, there is always a real threat of terrorist acts and so on. How
may that prospect reflect on the geopolitical picture on the southern
borders of Russia? And also I would like to hear your opinion of the
prospects of this process in the light of the upcoming parliamentary
elections in Azerbaijan. What changes may take place in the political
picture in Azerbaijan?

Pavlovsky: The pipeline will be guarded by foreign troops throughout
its length. Can one expect an Azeri contingent being called to
protect an oil pipeline in Turkey, for example? If it becomes common
practice and all the countries which have oil pipelines will demand
special military units to protect them, then instead of energy
supplies we will get pipelines that transmit conflicts from the
territory of one country to the territory of another. Theoretically,
Russia too may demand to be allowed to protect its pipelines on the
territories of other countries on the basis of the Azerbaijan
precedent, if such a precedent is set.

I think it is a very odd idea and a potentially dangerous idea. It
focuses on the struggle for control of the pipeline instead of
controlling what flows through the pipeline. As a result, we get not
new opportunities for peaceful economy, but more conflict in the
Caucasus. I think this is totally unnecessary.

As for the composition of future parliament of Azerbaijan, I am
sorry, but I have no reliable data on the composition of the future
Azeri parliament, but I hope that it will be formed in a free and
fair election and not by prior appointment.

Q: A question for each of the panelists. First, a question for Gleb
Pavlovsky. One of the results of the outgoing political year is the
electoral victories respectively of Voronin and Yushchenko, contrary
to Russia’s wishes. Don’t you think that the result of the next
political year will be the closure of the project called
“Transdniestria” through their joint efforts?

And a question for Mr. Fadeyev. You spoke about the internal policy
of Russia for the future. But how do you see the place and role of
Russia on the world scale? If you read the world press, more
attention is paid to the future, for example, India, China and
Brazil. The population of Bangladesh is already larger than that of
Russia. And in this connection how to you see the future of Russia?
Thank you.

Fadeyev: Let’s talk about the future. You mean distant future. It’s
always easy to talk about the distance future.

Q: Well, in the next 20-30 years.

Fadeyev: In the next 20-30 years. It’s always easier to answer such
questions. To be quite concrete Russia should emerge as the fifth or
sixth biggest economy in the world, that’s clear. In 20-30 years
China will be the biggest economy, that is absolutely clear. The US
will be second. Then India. But India is a problem because India has
a large economy but a poor population and in that sense India is so
far is not yet a player, India can be dismissed. And next … China,
the US, Japan, Germany and Russia. And Russia, too. Russia is the
world’s fifth largest economy. It’s easy to make calculations and see
how Russia related to major economies in the world in the 19th and
20th centuries. Russia has never reached the level of major countries
in terms of per capita income. And I think it never will. But since
Russia is bigger than European countries, such as Germany, France,
and Britain, in terms of population, it will most likely outdo them.
It will certainly outdo France and Britain, it will outdo Italy quite
soon and reach the level of Germany.

However, the structure is very important. Russia cannot remain a
supplier of raw materials. Each of the major countries, and there are
only seven or eight of them, has a certain internal structure and 10
or 20 transnational corporations. We have several such corporations,
but all of them deal in raw materials. We need big financial
companies, we need big banks and big insurance companies. We need a
big internal market. And in this internal market there must be ten
times more companies than now. The economic strength must grow
considerably.

Russia’s GDP will be three, four, or maybe five times bigger than it
is now at $2.5 trillion, but per capita GDP will be three times lower
than in the US. It is almost inevitable. There is no alternative.
Either Russia will turn into a gray zone that anyone can use — China
is using Eastern Siberia, and Europe is using our market to advance
its goods, and it’s a scenario of Russia’s disappearance — or, we do
not disappear, and we will live on and develop. Did I answer your
question?

Q: Yes, you did.

Pavlovsky: My topic is much less ambitious. I only want to say that
Russia had different positions with regard to elections in Ukraine
and Moldova. As for the Moldovan elections, Russia did not state its
position and did not prevent Mr. Voronin from imitating elections,
nor did the European Union. We and the European Union acted together
in accepting the sham that was offered to us. I think Mr. Voronin has
so far not bothered to announce the official results of the election
because there were some problems with the printing of ballots or
something like that.

So, as you can see, Moldova and Ukraine are two absolutely different
entities, not only territorially, but also economically and
strategically. But there is Mr. Robert Mugabe, a president, and the
population somehow supports him. And there is Mr. Voronin. We do not
have any special complaints about Mr. Voronin or any wishes with
regard to the future presidency in Moldova. The problem is that Mr.
Voronin is losing Transdniestria for Moldova. And it’s a fact of
life. It is not Russia that is losing Transdniestria but Moldova. And
there is a new competitor for Transdniestria, which is Ukraine, and
it is quite obvious because it is quickly spreading its passports in
this area and creating its political organizations there.

So, the dispute over Transdniestria is not between Russia and
Moldova. This must be understood. Russia wants the Transdniestrian
problem to be resolved by legitimate methods. But it’s a fight for
Transdniestria’s economic and territorial assets. And Chisinau itself
is involved in this fight. And I think the population of
Trasndniestria will have the final say in this dispute. Do you think
that the people who defended their independence under the threat of
ethnic cleansing and genocide will allow the situation of 1992 to
repeat itself? I don’t think so and the presence of the Russian
military contingent in this region is a guarantee against such
recurrence.

Anchor: Colleagues, let me thank our guests for this very interesting
conversation. The press conference is over.