Transcript:

Vladimir Putin: Good afternoon, or rather good evening. We are meeting in Sarov, which is an appropriate venue to discuss the issues of the development of our army, navy and defence industry.

We are drafting long-term plans and strategies for the development of the economy, healthcare, education and other spheres of life. Everything that concerns the army, navy and our defence industry as a whole also requires forecasting and planning, and importantly, for a long-term perspective – for at least 30-50 years, considering that all this production usually takes place over a long cycle.

It is clear that in each specific case it is essential to take into account domestic and global perspectives in science and technology. We need to determine these trends in advance as precisely as possible. We must not only involve ourselves in these trends, we must also see things that others probably don’t notice in order to always keep abreast of the times and to be as effective as possible. We need this for our security and territorial integrity, and this is not only for us. It is no exaggeration to say that the whole world needs this.

We have earmarked 23 trillion roubles for the development, upgrading and technical re-equipment of the army, and the modernisation of our defence industry. This is a huge amount of funds. I can tell you that we have strained ourselves to the limit to come up with these funds, and therefore we will try to use them as effectively as possible. When I said that all our efforts are directed at ensuring our security I also meant international security, bearing in mind our partners' plans on missile defence. And our national task – not just our national task even, but our responsibility to humankind – is to preserve the balance of strategic forces and capabilities.

This is very important because after WWII, and all those present know this very well – and I hope you have the same views…Why am I saying I hope? I have read your views, I am familiar with them and many of our foreign partners also feel that the strategic balance that has taken shape in the world has saved us from global conflicts. Regrettably, there are many regional conflicts and their number has been growing in the last few years, but thank God, the balance of strategic forces has allowed us to avoid large, global conflicts, and therefore our task is to preserve this balance. In view of our partners' missile defence plans, we must make the necessary efforts to maintain this balance as an element of global stability.

It goes without saying that we must think of how to resolve social issues appropriately and effectively. As you know, in 2007 we made the decision to change the system of basic pay in the armed forces. We were getting ready for this in 2008, and in 2009 the Defence Minister issued order No.400 on introducing a new system of pay for military personnel who bear special responsibility for the country’s defences – aviators, the navy, missile forces and some other areas, including task forces. Starting on January 1 of this year we took a new step and substantially changed the system of remuneration. But there is more to it than that. We are doing more in the social sphere now. In the mid-1990s, and in the 1990s in general, and regrettably, in the early 2000s, we could only afford to allocate or build 6,000-8,000 flats for service members of the armed forces per year.

But in recent years, there have been hundreds of thousands, 245,000, I think it was, yes, Mr Serdyukov (Anatoly Serdyukov)? 145,000 plus another 49,000 service housing flats. We spent a huge amount on this – 275 billion roubles. I also want to point out that during this period, we spent 217 billion roubles to provide housing for our veterans of World War II.

We had planned in 2010 to resolve all the problems with permanent housing, but unfortunately, we had to set some things aside because of the crisis and because it was not clearly established who needed what. But I hope that finally, at least by the end of this year or the middle of 2013, we will resolve the problem of permanent housing once and for all, and in 2014 finally resolve the service housing issue. In general, it's a large set of issues.

Recently, my colleagues and I have been working separately on issues of defence industry development – we have adopted a federal targeted programme for the defence industry. And today, I would like to thoroughly discuss this sector with you. Bearing in mind that virtually every one of you deals with these issues at one point or another, I'm happy to listen to your opinion, and I propose that we talk about it.

Please, let's begin. Who would like to speak? If you please.

Ruslan Pukhov (publisher of Export Vooruzheniy [Arms Exports] magazine, director of the Centre for Analysis of Strategies and Technologies): Mr Putin, I have one local issue, but it has concerned me for several years. Excuse me, please – I would like to articulate it, and I think some of our colleagues will be divided on this issue. Everyone knows that the government has decided to build two new plants to expand production of the new generation S-400 anti-aircraft weapon system.

Vladimir Putin: Exactly.

Ruslan Pukhov: Everyone knows why comments are also not needed in this regard. But we all know that the Yars, Topol-M, Iskander and Bulava – are all made at the Votkinsk plant. And if we're also going to make the heavy liquid rocket that you, the Chief of Staff, and the Defence Minister mentioned, it is clear that this cannot be done at Votkinsk. It is also clear that it is impossible to do at Reutov, where the previous generation liquid propellant missile was once made. After all, Moscow is nearby, and it's just like building MiG fighters two hundred meters from the Belorussky Railway Station, it's probably not the best idea. Despite the government being concerned about building a new plant, but because this information has never been leaked and is discussed behind the scenes, I now dare to make it public. Please tell us.

Vladimir Putin:  We have thought about this, and the question, of course, is how the Defence Ministry and related agencies and the deputy prime minister in charge, who is sitting to your left, Mr Rogozin (Dmitry Rogozin) will direct the money that we allocate for these purposes. I have said that we need to fit it into the weapons programme, into 20 trillion roubles, and not increase that amount.

My answer is very simple – these 20 trillion roubles evolved and emerged as a result of a very tough, shall we say, hard-hitting debate between various government agencies and the security-related bloc, the Defence Ministry primarily, and the government’s economic bloc. The Defence Ministry, or to be more exact, the General Staff, in fact, tallied what we need in terms of quantity and quality, of course... I mean, we already live in the 21^st century and we have to think about the end of the 21^st century and even about the 22^nd century, and I said, and you understand this, we must forecast at least 50 years into the future.

We had to calculate how many air-, sea- and land-based missiles we need. So we calculated it all, began to consider how much it would cost. Well I say roughly, considered how much it would cost. If we are going to somehow... We, of course, will have to adjust some things, this is clear, and life always makes its own adjustments, but we need to do this carefully. You can certainly unveil large-scale construction and put everything into the concrete, into the walls, fences, and you can invest in R&D and so on. They need to count the costs and say, “Yes, we'd better build a new plant – it will be more efficient in the long run.” Then I will not object, but they will have to prove it.

Alexei Arbatov (director of the Centre for International Security of the Institute of World Economy and International Relations, Russian Academy of Sciences): May I?

Vladimir Putin: Of course. Mr Arbatov, if you please.

Alexei Arbatov: Mr Putin, thank you for taking the time. I would like to talk about aerospace defence. The fact that aerospace defence forces were established in December 2011 is a very important and very positive development.

I want to recall that in previous years we tried to negotiate with the Americans on this issue without having a strong bargaining chip, and so we found ourselves in the position of a poor relative, begging to be a part of their missile defence. Naturally, they did not want to let us in. The establishment of aerospace defence strengthens our position for the future.

I want to remind you, in fact, where the process of our dialogue began – with the fact that the Soviet Union was the first to deploy a missile defence system. The Americans were worried about this, and they asked for negotiations on this issue – this was how the SALT-1 treaty was signed and how negotiations and agreements were eventually established. But, I think, in addition to completing the planned aerospace defence programme, we must now focus on its philosophical and conceptual foundation. Specifically, we need to clearly define the parameters – what does it protect, from whom, under what scenarios, what should our military doctrine and strategy include and how does it fit into our concept of strategic stability? What is the difference between our aerospace defence system and the US-European missile defence system, which does not fit into the concept of strategic stability? I think that's a concept we need to concentrate on. I'm sure that they will soon initiate new talks on this issue.

Vladimir Putin: Mr Arbatov, I agree with you completely. I was going to be honest about this, even say a few words in my opening remarks, but I just missed the chance. But we do need such a serious underlying rationale for all that we are planning. There should be a certain philosophy behind our work, I fully agree. But we still have something that I think should encourage our colleagues and our partners to do more constructive work than we have seen thus far. What do I mean?

Most recently, a few years ago, they did not tell us directly, but I know they talked to the others in their bloc, saying something like: “Well, let Russia beat itself, we’re not even very interested – they only have rusted equipment left.” But this is not true! Today, it is definitely not the case.

I'm not talking about what we had in the past, but today I want to report – from 2008 to 2011 alone (2008, 2009, 2010, 2011 – four years), 39 intercontinental ballistic missiles were delivered to the forces, two new submarines were commissioned, we have 12 launchers for the Iskander missile systems and a wide range of other equipment, and what’s more, the strategic nuclear forces are being built up ahead of schedule.

We continued upgrading to modern strategic missile systems such as the Topol-M and Yars. Ten regiments with us, yes? Ten new regiments. Here I want to point out – this is, after all, the Topol-M and Yars... In the past, we have had systems to defeat missile defence, and the Topol-M and Yars are modern systems that can beat a missile defence system. This is no joke! And the percent of advanced missile systems among the strategic nuclear ground forces has almost doubled – from 13% to 25%. This is a major qualitative change in strategic nuclear ground forces.

And the Navy? You know everything, you're the experts, this is your life, and we had problems with the Bulava. But these problems have ended, that's it, and the Bulava will be used. New ships were built, I said, two – the Yuri Dolgoruky and Alexander Nevsky – and they will be equipped with new modern systems. The Tu-160 and Tu-95MS will remain in the strategic nuclear air forces, but not only that, we have launched projects of a general nature, but nevertheless...

By the way, these aircraft have been upgraded, and we are now thinking of creating new strategic air systems. The Air Force has seven large air bases with strong infrastructure, and the basic airfields are being modernised – for the first time in 20 years, 28 airports have been renovated. It's all strategic infrastructure, and it continues to be developed. More than 30 air squadrons have been equipped with new technology: Su-34 Su-35, Su-27SM, Mig29-SMT, Yak-40 and helicopters and so on and so forth, and transport aircraft. Yes, we still have many problems out there, but no one can say that all we have is rusted iron.

Re-arming the missile forces with S-400 systems is a programme in progress, and you know that we are moving towards the creation of new, more state-of-the-art systems – the S-500. And the S-500 in all its characteristics – velocity, and so on – has elements of a missile defence system. I’m not talking about the peripheral elements of the system that you know about, but the complex is itself an element of an anti-missile defence system. That’s why we hope that we can work jointly with our partners on reducing nuclear arms, that we will both be aware of our responsibility to our people and to humankind, we must curb any attempt at an arms race.

You are welcome, Mr. Rogov (addressing Sergei Rogov).

Sergei Rogov (Director, Institute for US and Canadian Studies, Russian Academy of Sciences): Dear Mr. Putin, as the director of the Institute for US and Canadian Studies it is natural for me to speak about our potential partners and about our relations with the United States in as much as both global security and strategic nuclear stability depend on this to a great extent. In previous decades a vicious circle emerged. The threat of confrontation, then détente, then another confrontation followed by another détente, and now we talk about the “Reset” – well, détente as it was called 40 years ago. Now we see some cooling in relations on a number of issues, and not just on AMD; we have some serious disagreements with the US. Assuming this is true, I think it’s important to consider both a military approach and a political approach – to avoid this tired cycle, all the more so now that, as you have noted, the nation is allocating massive money – 23 trillion roubles. But our priorities are in fact not limited to strategic nuclear force or military space defence. Our conventional armed forces, or as you write in your article, cutting-edge, non-nuclear weapons, where the US has an edge… I think our media give us the impression that we are repeating around 30-year-old mistakes. When Reagan came up with “star wars,” some people in our country decided that we were doomed, but later an asymmetrical response was found and strategic stability was maintained. And now, in my opinion, there is a real opportunity to avoid past mistakes, to answer with a similar response. In this regard, looking at the United States, we see that the US is on the prowl. We cannot rule out a Republican presidential victory. Maybe it’s only a 20-30 percent chance, but they could win. Actually, Dmitry Rogozin’s “friend” Senator Kyl, from Arizona is retiring, but if a Republican administration is reelected, they will be “neocons” who would make the Bush administration look like kids. We could expect much pressure both on AMD, and over Ukraine, and Georgia, and in all directions. However, we have possibilities… I think Obama has a better chance of winning, and if so, there remain opportunities for agreement, in my mind. And it seems to me, now that the clouds are already gathering, that we can think of some initiatives to demonstrate that we are ready for serious talks as soon as in two months, and be prepared for a 2013 discussion on both anti-missile defence and on nuclear weapons issues. We do expect new proposals from the US on radical cuts, and we could find ourselves in a grave situation if we just reject them. We have to review our alternatives; we have time to explore our options, what can be done, what can be offered. Thank you.

Vladimir Putin: I don’t think we are seeing a cooling. Why do you have this impression, Mr. Rogov? I don’t understand. We have a constant dialogue – we dislike some of the things our colleagues are doing, they don’t like some things  we’re doing. But in general we have built a partnership over the key issues on the international agenda. Yes, we do have a dispute over the AMD system and how it should be developed, but this didn’t start yesterday. It started before this modern-day détente you mentioned. There is nothing new here. As for some ultra conservatives coming to power and tightening the screws – let them screw away. They can screw and screw until they screw up. They are pursuing a policy that is costly and ineffective. Okay, they have changed regimes in North Africa, but what will they do there now? Ultimately Israel will find itself caught between two fires… It is hard to say what kind of regime Egypt will end up with, and it’s hard to say what sort of a mess they’ll make in Syria. No one can predict what will happen in the Maghreb countries either. Are you sure they are in control of the situation there? Apparently, they are trying to control it, but nobody, including them, knows what will come of it. That’s why whatever is being done… There is pressure for change, but it’s very costly with little efficiency so far. 

As for building relations with AMD, they really don’t want to talk to us (yes, the defence minister is here, other officials are here, too), but I can tell you straight out– they are evading the issue. Basically, they only offer superficial discussion and attempt to present it to the international community like this: yes, our relations are developing, yes, technology is moving on, yes, threats do appear and no one can stop us from curbing those threats in the future for the sake of their national security. Well, would anybody be against that?

Obviously, national security threats should be curbed, but it should be done in such a way so as not to create new global threats, to not destroy the balance of strategic power, that’s the issue. However, in our view, an attempt is being made to destabilise that balance and to create a survivability monopoly in their favour; that’s what it’s all about. We should simply respond as we have already announced. And what have we already announced? That we’ll take asymmetric but effective steps. I have already said this publicly, and I will say what I said to the previous president, “If you carry on like this, we will be forced to take these asymmetrical steps. Say, steps to develop new systems that will be much more efficient in breaking through this ADM system. This development process is much cheaper and easier for us. So, what’s next? We’ll see, but they tell us that the AMD system will not be directed against us. Then we can only respond that our system will not be directed against you.” The reply was simple: “Do as you please, we are not enemies anymore.” - “Okay, that’s what we’ll do.” We currently have ten missile regiments equipped with Topol-M and Yars missiles, and we can do more than that. Still, I think the awareness that we could end up in a new round of the  arms race will make us more cooperative in the negotiating process, that’s number one.

And secondly. You touched on a very important issue Mr. Rogov. You said questions should be raised concerning further nuclear disarmament. We will not disarm unilaterally. As for further steps in nuclear disarmament, those steps should be comprehensive in nature, and all nuclear powers should participate in the process. We cannot disarm while other nuclear powers are increasing their arms. That’s out of the question!

And one more thing. I believe I mentioned this in my article, and it’s critical. We see how technology is developing. Our partners really are ahead of us, especially in high precision weaponry. And these precision-guided weapons (I mean today’s capabilities and the power of modern munitions) combined with the time of delivery to an intended target become comparable with weapons of mass destruction though they are not technically WMDs. However, the result is not much different, and in the future, probably, will be no different from weapons of mass destruction. So we will eliminate nuclear weapons only when we have this kind of technology. And not a day earlier! No one should have any illusions about that! That’s the way it is.

You are welcome.

Igor Korotchenko (editor-in-chief, National Defence magazine; director of World Arms Trade Analysis Center): First of all, I would like to express a common opinion I think, and on behalf of our military experts, to thank you for your brilliant article that was recently published. It really is conceptual in nature, and very important, I believe, both for the world and for Russia. In this connection a key issue to me is the fight against corruption in the military procurement system. Twenty-three trillion roubles is a lot. And it is absolutely intolerable for someone to carve-up that amount. We know perfectly well from experience how various corruption chains were formed during the state defence procurement process. I think in this respect we should lend our total support to the policy that is being pursued by the Defence Ministry concerning the transparency of pricing, because it is absolutely unacceptable that some companies take an 800% profit, especially those at the second and third tiers. We should also support the policy pursued by the new deputy prime minister who has said, again, that fighting corruption should top the agenda. I have a specific question in this regard. We are talking about the new S-500 system for aerospace defence, but Almaz’s tangible assets have been almost completely lost over the years. I believe that in terms of practical steps we should raise the issue of determining where the defence companies’ property went. This is something we absolutely need to do. I would also like to say, I would like to point out that a campaign has been launched questioning the policy that we’ve adopted of creating vertically-integrated defence industry groups. For instance, as our colleagues have already mentioned, the construction of two new plants by an air defence concern has been described in a news story as redundant and resulting in nothing but the siphoning off of funds. You see, this kind of information doesn’t appear for no reason. We should have a clear system of objectives for the construction of a new aerospace defence system, and there’s no way someone should be allowed to question national policy. Those who instigate such news stories should be slapped on the wrist.

Mr Arbatov (Alexei Arbatov) was absolutely right in his assessment of the European Air Defence System. Remember there was an excellent book in the Soviet Union called Where Does the Threat to the World Come From, edited by Chief of Staff Marshal Nikolai Ogarkov. I believe that in terms of backing up our information efforts during our talks with the United States and NATO, we need to come up with a similar book, written jointly by the Defence Ministry, the General Staff, the Foreign Ministry, and the expert community. We need this so we can approach a negotiating session with a well-grounded concept, able to say that the American proposals threaten stability. In this respect, I would like to see the potential of the Russian military expert community used more broadly than it is now.

I would also like to ask you to state your position on Syria and Iran. We see that things there are developing unfavourably. Clearly, the instability in these countries could spread to Russia. Actually, we already see it, because the new ambassador to Russia is a political strategist. It is also clear that events in Moscow on March 4 could have unpredictable consequences. So I’d like to see those who can publicly defend the choice that will be made by the Russian people on March 4 have a chance to use their potential – so that those who take the disgruntled portion of society to the streets are stopped from running the show. Thank you.

Vladimir Putin: With respect to our domestic events, we will certainly operate in a way that guarantees sovereignty for the Russian people when they make critically important decisions. Anyone who operates within the law should be confident that their constitutional rights are guaranteed. Anyone who goes beyond the law should know that violating existing legislation will be treated in the same way, and the government will respond accordingly.

With respect to your first question, you are absolutely right. We will look carefully into these material assets to see where they are, who is managing what, and how they ended up with particular assets. This is absolutely right, and I hope that Mr Rogozin will address these issues in a more comprehensive manner – I’m talking about that quite a big ‘pie’ that is now being baked by the defence industry and the Defence Ministry. This pie looks big, but there’s nothing extra in it to take, and we should pay a lot of attention to it. More than that, as I have said to Mr Rogozin, and I’ll say it again here, since it’s no secret: I believe that we should establish a special control system to monitor all defence contracts. The Defence Ministry and several supervisory bodies are already exercising this kind of control, but it’s not a focussed effort. We should be able to clearly understand the performance objectives under specific contracts, including deadlines, costs, and contractors. Anytime we see even a slightest change, say, in a deadline, an alarm should go off straight away and the situation should be addressed. I’m not talking about an administrative response only. Perhaps, people just need some assistance, which is quite possible.

There’s one more question with respect to contractors. I’ve mentioned this too: in some cases, up to 80% or even 95% of the profits are retained by subcontractors, not the main contractor. Unfortunately, sometimes things turn out the opposite way. I met with our colleagues in one of the regions. They complained that the lead contractors were making them operate at a near break-even margin or even at a loss, which is also unacceptable. This issue also needs to be considered. As far as information support goes, yes, the state should be able to protect itself, including in the area of information distribution. This is true. Mr Fortov, please go ahead.

Vladimir Fortov (director of the United Institute of High Temperatures at the Russian Academy of Sciences): Thank you, Mr Putin. I’d like to briefly touch on an evergreen subject as they say, i.e. the relationship between fundamental science and defence development science. We have discussed this subject before, and it’s part of your article, which is quite justified. It suggests that if we don’t base our work on the fundamental sciences or on advanced designs, if we continue like this, we won’t be moving forward; we won’t even be able to stand in place, because we will fall behind others’ developments. Among the many problems facing us, there is one that I believe we can resolve on our own. I’m referring to the extreme amount of red tape involved in these types of activities. Very often, it involves something minor like departmental barriers. Still, we have managed to gain a certain positive expertise. Recently, we established a sort of virtual centre at the Ministry of Nuclear Energy, under an initiative from Sergei Kiriyenko. Researchers from the Academy of Sciences, Arzamas, Chelyabinsk, and the Institute of High Temperatures are working there on a specific assignment. The idea is very simple: we assign them a specific task that needs to be performed within a given deadline. The beginning and the end of the task are clearly defined. Researchers meet, and we share equipment, computer codes and computational capabilities as we work on a particular problem. It works fine for us. You were shown some experiments today at the gas dynamic department here in Arzamas, where they have set the world record for creating spherical plasma by compressing it at up to 80 million atmospheres. I believe this is a good medicine for the red tape that’s been stifling us in many ways.

There’s one other example. We are developing electromagnetic weapons at the Academy. This is a non-lethal weapon. The Americans classify it as a strategic weapon. The idea behind this weapon is that a strong impulse of electromagnetic radiation hits a cruise missile or any other smart weapon and damages it. You can consider it an asymmetric answer or a strategic answer – as you wish. However, this involves a lot of work, and part of this work can be performed by the Academy. But, the other part of work must be done by the institutes run by the Defence Ministry, because it’s part of their job, not ours. When we combine this work with the 12^th Institute, for example – the one in Zagorsk – we tend to get good results and can speed up our work literally by many times over. I believe this may be of interest to those at the defence institutes who work with us. Young properly trained officers with access to advanced technology get the chance to broaden their horizons, defend a thesis, write books, and much more, which is particularly important now that defence science is integrating with higher education institutions. This process will take more than one day to complete. It looks like we can join our efforts here and work without having to deal with the bureaucracy.

I should also mention that the second important issue here is creating a body that can finance this work for the long-term. Currently, the Academy of Sciences has a work schedule. If you don’t include an activity in this five-year plan, then any amount of money that you spend on it will be considered unauthorised use with all the ensuing consequences. However, I can’t make plans for five years. By the same token, the Defence Ministry has to include such design and development work in their defence contract documents in order to be able to finance it. That way we end up with a five to six years’ gap. We can avoid this if we do what the Americans did after they launched their first satellite and created DARPA, which provides financing for such research.

Finally, I’d like to quote a historical example: in 1711, when Peter the Great lost the Southern War to Turkey and signed the Treaty of Prut, Russia was supposed to destroy Taganrog under this treaty. He agreed to it, but issued a secret order saying that buildings should be torn down, but the foundations left intact. When Russia seized this place thirty years later, the city was rebuilt...

Vladimir Putin: Mr Fortov, not “seized”, but took it back.

Vladimir Fortov: Yes, took it back, in a positive sense.

Vladimir Putin: Yes. With respect to the administrative body that you mentioned, this is exactly what I suggested in my article, this is precisely what I described. The proposal is exactly for the establishment of a body that could engage in promising research work and organise financing.

As for merging academic and industrial sciences, I believe that this is the absolute right direction. You know what we need to do? We need to consider how best to do it and outline some practical steps. The government is ready to support this. You need to draw up a specific action plan for establishing such cooperation.

Vladimir Fortov: Let’s use the expertise gained by the Federal Agency for Atomic Energy.

Vladimir Putin: Yes, agreed.

Vladimir Fortov: They’ve been working on it for several years now.

Vladimir Putin: Good.

Vladimir Fortov: I’d like to give you a book.

Vladimir Putin: Thank you very much. This is a good addition to my library. Thank you. Please go ahead.

Pavel Zolotaryov (deputy director of the Institute for US and Canadian Studies): Thank you. Mr Putin, this year we are celebrating the 20^th anniversary of the signing of the order by the first Russian president on establishing the federal contract system in Russia. Clearly, we couldn’t implement it during the 1990s, but a lot of work has been performed recently, and a draft law on establishing such a system was prepared. As we can see from our own and from Western experience, it’s almost impossible to get a fully operational law and a system at the government level. We have agreed on the wording for certain provisions, but agreeing on them often waters down certain fundamentals. As we know from our experience, the system only works when administrative procedures related to the establishment and the development of this system are controlled at the presidential level. Therefore, I’d like to request that we make effective use of allocated funds and create an operational state economic management mechanism. Western countries never stop improving this, and the role of the state in this area is ever increasing. I wish we could go down the same path, so that this issue becomes the responsibility of the corresponding bodies at the presidential level after the March elections. Thank you.

Vladimir Putin: I’d like to say a few words about this. As you may be aware, all financial issues are overseen by the government, so we’d better leave it that way or otherwise we’ll mess up all the competencies. I think that if we assign all the elements that you mentioned to one entity within the government, then it might well be more effective – on a condition that there is a mechanism in place for oversight of these activities by some presidential bodies. You are right when you say that currently these entities are disparate, although they have recently established such an agency at the Defence Department. However, we agreed – I believe it was five years ago – that all issues related to government contracting should be overseen by the prime minister so as to distinguish those who use weapons from those who buy them. This is the right approach which needs to be followed through on. There must be a system of interaction between the customer and the contractor and those who are supposed to oversee this process. However, there are problems, and Mr Korotchenko mentioned the corruption. The main point of what you have just said is to draw a line and make sure that the final result is acceptable both in terms of cost and quality. We are thinking about this. I just don’t think that we should take it directly to the presidential level. However, it makes perfect sense to make them directly accountable to the government, something we have discussed in previous years.

Go ahead, Mr Ivashov.

Leonid Ivashov (director of the Academy of Geopolitical Issues): Ivashov, Academy of Geopolitical Issues. Mr Putin, I believe that no one has any doubts that the military and political situation, including in Russia, will become more difficult, and that threats will intensify. These are the current trends in global development.

Mr Rogov spoke about negotiations with the United States and whether Obama’s presidency is good or bad for Russia. We can see even during the recent decades that America has a clear-cut geopolitical agenda, a political strategy and specific programmes no matter who sits in the White House. Take, for instance, the air defence programme. It was initiated under Bill Clinton and then taken up by George Bush and now Obama. Same goes for Yugoslavia: its destruction was spearheaded by a Democrat, and then G.W. Bush continued with Iraq and Afghanistan. Now, we have seen how a Nobel Prize winner destroyed Libya. So, we shouldn’t have any illusions about this. Of course, we need to pursue talks, at least to keep our Foreign Ministry busy.

Here, too, in order for us not to take any missteps and to avoid the use of force, we need, first, an analytical centre to conduct the analysis of threats and to plan actions that would neutralise such threats. I have a request or rather a complaint with regard to our foreign policy and diplomatic service. Based on our military capability, especially if it becomes stronger, we need to neutralise a threat using primarily political and diplomatic methods in order to keep things at bay. We need to form an offensive system to ensure general security and we should also try to corner the United States, as they say. Even now, we can see… Allow me to quote Henry Kissinger, who said the following on January 24: “The United States is baiting China and Russia, and the final nail in the coffin will be Iran.” Even though he may be getting a little senile, the Iranian problem is still a serious threat to us. We can go ahead and request a Security Council session in order to consider the threat to international peace. Using such offensive moves, we can push America to think twice before acting. This is my first point.

Secondly, along the same lines: we are a loner country. To be honest, the three top-tier centres of power – the United States, Europe, and China – are not exactly our friends. Today, we do not have any strategic allies. This doesn’t have to be a military union, but still we should have some allies. China isn’t against opposing the deployment of the US air defence system. I believe they would join us, but we should carry on both open and covert talks with China. I’m sure that they will agree to it. There are many opportunities to form alliances in various areas. Perhaps, we should feel more confident in establishing our presence in the Americas, just like they are doing here. We should work more actively with India and probably with Iran as well. If we go it alone, we might just go bankrupt. Thank you.

Vladimir Putin: Thank you very much, Mr Ivashov. You lumped the United States and Europe together, saying that they were unfriendly powers, and instantly suggested building an alliance with China. Of course, the United States and Europe are part of NATO, but relationships between them are also changing, changing in a crucial way. And what happened just before the events in Iraq, the fact that two leading European countries didn’t support their main NATO allies in Iraq operations is a telltale sign that is indicative of certain internal processes within NATO. This alliance was built to oppose the Soviet Union, but the Soviet Union is no longer there. Who is it supposed to fight now? Are such alliances really needed? Today, NATO is more a foreign policy tool than a military bloc. The United States is using NATO primarily as a tool to preserve its leadership within the Western community. Article 5 of this organisation is still there, of course, and this is still a military organisation, and we should keep that in mind. But this tells me that we can build relations of our own with Europe, which is exactly what we are doing.

I have to say this is finding increasing support among the European public, which is very important: I’m referring to the quality of statehood in these countries. No matter how hard someone may try to do something about it, the world is changing in a strategic way, and this will make itself felt. Many people used to tell me – I will not give any names so as not to embarrass anyone – but many people in Europe used to tell me the following: “The Americans keep trying to scare us with you, but we don’t feel any fear, because we know that Russia has changed and the world has changed as well.” In this connection, many people say that there’s a need to come up with external threats, such as Iran. However, Iran can’t take the place of the Soviet Union. I believe that it represents a threat not to the United States, but to some of its allies. This is what causes our concern primarily.

They asked me what I thought about events in Iran, and answering this question somehow slipped my mind. However, there is no need to expand nuclear club membership. We are against it, but not because a country that claims this membership doesn’t sit well with us. No, we are against it because expanded membership will increase the risk to international stability and security and make other countries want to become nuclear powers as well. As for the technology, we have many nuclear physicists in this room, and they can tell you that making it isn’t that complicated.

Leonid Ivashov: China and Russia should guarantee security for Iran in exchange for their renunciation of nuclear weapons.

Vladimir Putin: But they say they aren’t manufacturing any nuclear weapons. And we trust them. Things in Iran are not as simple as they may seem.

With respect to our relations with China, you can see that our shared position on Syria prevented the adoption of a resolution that we believed was dangerous for Syria. However, this is not all that we are doing with our Chinese partners. We are also cooperating in defence and in military technology, where our ties run deep. We plan to expand this cooperation and go beyond trade relations to include joint research activities. However, we should proceed with caution here. I’m referring to the protection of our national interests. But, we are moving in this direction.

With respect to India, we will begin summing up the results of our cooperation in military technology in 2011. I believe it’s about 25%, correct?

Remark: 26%.

Vladimir Putin: India accounts for 26% of Russia’s foreign trade in military technical equipment. More than that, we have made better progress with India in terms of joint research work than with any other country, including China. As you know, we jointly designed the Bramos missile, which is a modern high-tech product. Prospects are good for future cooperation. We have also just sold a submarine to India. I believe it should arrive in India tomorrow from the Far East, if it hasn’t already. Was it Friday?

Anatoly Serdyukov: We leased the submarine to them.

Vladimir Putin: Yes, it’s a lease. Has it left yet?

Anatoly Serdyukov: Yes, it has been accepted in full.

Vladimir Putin: No, it was supposed to take to the sea by now. Today or tomorrow.

Anatoly Serdyukov: I’m not sure about that, but it was accepted two days ago.

Vladimir Putin: Yes, it was, and the crew is already in there. They were supposed to take to the sea and head for home yesterday or today.

We are working very closely on transport aircraft. They joined our work on the fifth-generation advanced frontline aircraft system, the T-50. We have almost completed the first phase of this work on our own. It’s clear now that we will be able to build the T-50. We have two or three fully operational planes, and we will have several more this year. It’s absolutely clear that we will be able to build it rather quickly, because all the technical issues have been sorted out. We do need a partner so we can bring down the final cost of the product. They will be buying it from us in large quantities. The T-50 is superior to US-made fifth-generation aircraft, which is obvious to any specialist. This is not just talk; this is specific work being carried out. We will join resources and begin manufacturing transport aircraft with India as well. As a matter of fact, we are already doing so. Therefore, we have established very strong and dynamic cooperation with them. Mr Solomonov, please go ahead.

Yury Solomonov (chief designer of the Moscow Institute of Thermal Technology): Mr Putin, I’d like to focus on two points. Speaking about new threats, you have correctly noted that we shouldn’t create new ones. This is obvious. However, there’s another aspect to this. Our project should be cost effective. Since I’ve been in the business of missile technology for over 45 years now, I’ve seen a lot, and I can quote two anecdotal evidences which, I believe, clearly show that we can’t base our responses on myth. In March 1983, the strategic defence initiative announced by Ronald Reagan was published in the foreign and Soviet media. Within two months, all the fiction that had been published, including X-ray and excimer lasers, particle beam weapons, laser guns and so on and so forth, instantly became part of the requirements issued by the Defence Ministry for new weapons. This led to a drop in specifications across the board, and, in some cases, these absolutely mythical and hypothetical requirements complicated the designers’ work to such an extent that they became outright unfeasible and tied up huge intellectual, material and financial resources. Five years later, in 1987-1988, the media spread the news that a US Congress commission created an ad hoc group of experts to investigate the statement of the US Department of Defence about the destructive potential of laser weapons with regard to the missile hardware, in particular, the Titan IV modules. Later, it became clear that it was a total bluff. The destructive potential of laser weapons was a premeditated misstatement, and weapon tests never took place. The module was loaded up to the point of self-destruction, and the slightest thermal impulse destroyed it – there was a video on this subject. This led to a huge scandal, and a number of programmes were shut down. I believe that this is more proof that such statements should be taken with a grain of salt. We stood up for our defence programme at the Central Committee of the Communist Party and insisted on continuing our work on the strategic compact Kuryer complex rather than engaging in a game that someone wanted to impose on us. The same scenario came up during the Desert Storm campaign when the newly developed Patriot system was used to take out the Iraqi Scud missiles. The Raytheon Corporation officially announced that the new anti-missile system boasted a 40% effectiveness. All 44 antimissiles used to intercept missiles designed 30 to 40 years ago missed their target even with an effective dispersion area of dozens of square metres.

My point is that we’ve been hearing a lot of similar talk about the missile defence system in Europe. In most cases – and I’m saying this absolutely officially and competently – this is an absolutely far-fetched threat to our strategic potential. Therefore, I fully support Mr Ivashov’s idea of establishing an analytical centre where professional and independent experts would work on forming opinions about certain issues as officials are not strong in special issues, which is quite natural. This work might take the form of debates, which, I believe, are quite useful in dealing with such complicated matters, but we would still be able to come up with balanced decisions about our future steps.

Here’s my second point.

Vladimir Putin: This centre could be established under the president.

Yury Solomonov: That’s exactly what I said to Mr Ivashov. Mr Putin, I believe that a special commission should be set up under the Russian president…

Vladimir Putin: We can do it.

Yury Solomonov: ...which would convene, say, twice a year. I’m referring to the way it’s being done in the United States, where they have done a great job of systemising this work. This does not necessarily need to be used as a practical guide. It just adds perspective, and the president can use the findings to make his final decisions as the person carrying the ultimate responsibility under the Constitution. I believe that the results of in-depth analytical work carry more weight than a proposal made by a single albeit high-ranking official.

Second. I’m not sure about you, but I have worked a lot with Americans over many years on START-1 and on medium-range missiles. Using sport  jargon, we’ve been second stringers over the past several decades. We have fully abandoned the initiative in certain key areas in favour of the West, and now simply react to their proposals about a sectoral missile defence system. I don’t mean to criticise anyone. Perhaps, this is the right thing to do, but I believe we should put an end to this and have this analytical group come up with pro-active proposals and initiatives. I can give you three such ideas right now. They are quite productive, and the West would clearly be receptive. Most importantly, they’d be coming from us, and we would thus lead the way. Firstly, in addition to strengthening Russia’s authority, they would put Russia in a favourable position with respect to our relations. Still more importantly, this would allow us to establish positive relationships and pursue our policy based on this kind of analysis. Thank you.

Vladimir Putin: This is interesting and we can do it. Mr Velikhov, please go ahead.

Yevgeny Velikhov (president of the national research centre Kurchatov Institute): Mr Putin, I have two brief comments. For the most part, I agree with what you have written in your last article on national security. Here are my two comments. First, the rearmament programme is very strong, but it should have more stability. Our experience gained in the course of 20 difficult years shows that we can do this in only one way: our programme should focus on developing defence technology. At the same time, such enterprises should also engage in manufacturing commercial products. You know this well from the Severodvinsk plant. I remember having an extensive discussion about this with Dmitry Ustinov (Soviet defence minister) and he told me in no uncertain terms that I was wrong, but those were different times. I believe that this is the way to go now. Take, for instance, Borei that we discussed here today. Some things will take more time than planned, and there are many other issues as well, so we need to have a “second leg” just to be on the safe side. This is very important in this particular case.

Vladimir Putin: We did build a platform there, didn’t we?

Yevgeny Velikhov: You know how much it helped David Pashayev (David Pashayev, prominent Russian shipbuilder) to build the ships you mentioned. He wouldn’t have been able to create them if it weren’t for this platform. This platform helped the Kurchatov Institute survive as well.

The second point that I’d like to make is that the asymmetrical response is an appropriate answer to the United States and NATO. I often think about our discussions with Yuly Khariton. He had a fairly straightforward perspective and believed that nuclear interception was the most effective method for intercepting ballistic missiles. I’m not talking about us necessarily working to develop nuclear interception. As you are aware, it exists in the 135^th system. Importantly, if we added an optional nuclear interception section to our programme, it would be a major wake-up call to our partners, because this is totally unacceptable for the US politically. This would be a totally asymmetrical answer, since they simply can’t do it. I will not elaborate now, but this is a 100% likelihood. As you know, this is even less acceptable for the Europeans. Therefore, just including it as an option and including discussions about a nuclear interception project would be the right thing to do technologically and politically.

Vladimir Putin: Thank you very much.

Mr Sharavin, please go ahead.

Alexander Sharavin (director at the Institute of Political and Military Analysis): Mr Putin, I believe that Russia has a unique chance today for building modern armed forces to meet the challenges of the 21^st century, because not only do we have proper material resources (we have allocated vast resources to this programme), but also subjective conditions. Judging by your article, there’s a desire and a willingness to achieve this. We are now speaking about hardware and military equipment, but if we want to build new armed forces, we will need military service personnel, both officers and soldiers of a different quality, as well. Much is being done for the army now: new pay, new apartments and a more humane environment. However, this is not enough. We need to change the way military personnel are perceived by society and the state. We also need to change relations between servicemen, because our goal is not in giving a facelift to the army, but in changing its inner philosophy so that servicemen don’t feel like a cog in a machine, but rather like a full-fledged citizen wearing a uniform. There’s much work to be done, but we will only be able to talk about a new army after we achieve progress in this area. There’s a need to increase the role of officers’ meetings during appointments to top positions, distribution of bonuses, and so on. Officers’ meetings should have a greater say in the army. We also have to take other similar steps. This is what I wanted to call your attention to. Thank you.

Vladimir Putin: Mr Sharavin, I believe we had this procedure for appointments to top positions in 1918. Or you were talking about something else?

Alexander Sharavin: No, we have a great track record in this regard. Peter the Great introduced the ballot vote among officers. Of course, I can’t call him either an anarchist or a democrat, but he understood that the ballot vote was the best way to promote the best officers and generals. The regiment meeting would decide which company commander should become a battalion commander. This has nothing to do with anarchy. The regiment commander was entitled to dismiss the decision made at an officers’ meeting. However, not a single commander ever dismissed the decision made at officers’ meeting. Why? Because if an officer appointed by the commander of a regiment wasn’t up to the task, then the commander had to quit together with the officer. Therefore, if the officers’ meeting decided on someone to become the commander of a battalion, then the commander of a regiment would approve that decision. However, the commander has always had the last word.

Vladimir Putin: Frankly, I didn’t expect this. I’m used to considering unusual ideas. Maybe there’s something to it.

Alexander Sharavin: Just one more example from the history. The Naval Board had to decide who would lead the Russian fleet into battle with the Swedes. The board was comprised of nine members. Peter the Great was a senior board member, but he had one vote just like everybody else. The board decided on a candidate that Peter disliked a lot. This commander came out on top. Do you know what Peter said? He said that he thought the commander was good for nothing, but that the system was great.

Vladimir Putin: Yes, let’s give it some thought. Anyway, it’s an interesting idea. This is one point.

Secondly, I fully agree with you that we should change a lot in the mindset of military service personnel, the officers and even privates shouldn’t feel like cogs in a wheel. Each one of them should keep their personality, understand their task and be able to use their creative potential.

Alexander Sharavin: Then we’ll have a positive result.

Vladimir Putin: Yes. The Defence Ministry has been creating such groups for a while now. They are not quite what you meant, but it’s establishing groups of young specialists across different areas. The minister reported the results to me not too long ago, and they look good. Of course, these are isolated occurrences in key areas, but the results are promising. Young men and women are working very effectively. Therefore, we should think about what you have said. I agree.

Mr Kokoshin has been raising his hand for a while now, so I should give him a chance to speak.

Andrei Kokoshin (member of the Russian Council for Foreign Affairs): Thank you very much, Mr Putin. You started out with a very important subject…

Vladimir Putin: Excuse me, Mr Kokoshin. There’s one more thing. We are aware of the decisions regarding military pay, but we also need to think about the salaries of those who work in the defence industry. Mr Velikhov was right when he said that a significant number of defence enterprises are working for the market, and their market share is getting larger. However, there are other centres, such as in Sarov, that are working mostly for the government. We need to think about developing a remuneration system that would be in line or perhaps even higher than international standards, so that people will desire these jobs and so there’s competition for these jobs. Do you see my point? If the entry-level pay for a lieutenant freshly out of school is 50,000 roubles per month now, then good, one-of-a-kind specialists should have proper living conditions, including income, housing and so on. We will need to think about that.

Please excuse me, Mr Kokoshin.

Andrei Kokoshin: Thank you, Mr Putin. I’ll add a couple of words to what you just said. You said in your article that you welcome the participation of higher educational institutions, state research centres and institutes of the Russian Academy of Sciences in the research, design and development of government defence contracting. A lot can be done in this regard and a lot is being done. The defence minister is aware of it, since we reported to him about this as well. However, it is very important not to leave behind the employees of these entities. Not only the ones who are formally part of the defence industry, but also the ones who are not; however, they need financial incentive as well. For example, we are subordinate to the Russian Academy of Sciences, but our employees are not too eager to take secret jobs because secrecy involves certain restrictions, and financially the extra pay for secrecy does not make up for a young person for the restrictions, for example, on foreign travel. I would like my colleagues to make a note of this, because it is an important factor. Now for my main message. You started with a very important theme. We do indeed need a long-term plan for the development of weapons and military equipment, for research and development, and it should be based on what is currently called “foresight” and used to be called “prognosis”. There is a huge shortage of such research and development. I have a concrete suggestion to make: we must come together – the defence industry, the Defence Ministry, Rosatom and the Russian Academy of Sciences – bringing in our top experts to prepare a list of fundamental and applied research priorities that may bring about a breakthrough in the development of weapons and military equipment.

Vladimir Putin: That can be done as part of implementing the proposal made by Yuri Solomonov .

Andrei Kokoshin: Yes, of course, within the same commission. He was more focused on a specific theme, but that really applies to other themes as well. Vladimir Fortov mentioned some research and development being conducted at his institute. They may indeed be asymmetric in character in relation to the main potential enemy, as they used to say, high-precision long-range weapons: that too could be one of the topics. But I think that this list, as our preliminary work has shown (on the defence minister’s order the ministry established a special council on science policy, which I have the honour of being the head of). That work must include hundreds of components that form a very complicated internal hierarchy. We need experts, organisational efforts and we need political support, so I am ready to initiate this work on behalf of the Academy of Sciences, jointly with my colleagues, Mr Putin, in conjunction with our colleagues from the relevant agencies and organisations present here. But I would like to ask for your political support.

Vladimir Putin: Very well. Thank you. Yevgeny Buzhinsky, please.

Yevgeny Buzhinsky (Senior Vice President of the Russian Centre for Political Studies): Thank you. I would like to speak briefly about the following. Some ideas have been aired here to the effect that we should come up with arms control initiatives. I don’t think it makes sense for us to enter that race at present. We should make a pause. As for nuclear disarmament you have already spoken about it. Tactical nuclear weapons is a very fashionable theme. Tactical nuclear weapons is our trump card and we cannot afford to give it up at present. It is an element of our nuclear deterrence.

Vladimir Putin: Mr Buzhinsky, I can tell you straight away that we are not going to give up any of the things that we need. You see? We will only give up what encumbers us and does not bring any benefits. That is all. As for what we need and does not burden us, but on the contrary, offers certain guarantees, we are not going to give it up.

Yevgeny Buzhinsky: May I continue?

Vladimir Putin: Yes, of course. I am sorry.

Yevgeny Buzhinsky: I simply wanted to say that we are lagging behind on precision weapons and we are lagging behind on drones. Until the lag is eliminated there is no point in making any cuts. The Americans are creating systems… This is a long-standing topic, we have always come out for limiting sea-based and air-based cruise missiles. Now they say: let’s do it, nuclear cruise missiles are practically ready, but they forget that… and I ask them: what about unmanned strike aircraft? No answer. In fact, that means that they are way ahead on drones and now they can talk about cruise missiles. Until we bridge the gap on certain items we cannot make any cuts. Thank you.

Vladimir Putin: Mr Buzhinsky, I appreciate your brief remark. It tallies with our own ideas of what we should do and what we should not do.

Mr Ilkayev, you have the floor.

Rady Ilkayev (Research Director at the Federal State Unitary Enterprise Russian Federal Nuclear Centre – All-Russian Research Institute of Experimental Physics): I subscribe totally to what the previous speaker said. We too are very concerned that the issue is sometimes being discussed in the corridors. Your latest article does not touch upon tactical nuclear weapons, but everybody is telling me that this is because we are not even going to discuss that issue being aware of its great importance. It is totally in line with our philosophy, we support it completely. Now concerning diplomatic proposals. We would hate to have a philosophy that prevailed formerly when many of our leaders tried to score a diplomatic victory at any cost.

Vladimir Putin: I have never been accused of doing that, Mr Ilkayev.

Rady Ilkayev: No, and we are very supportive today of a totally different approach, it is absolutely reasonable and sound. We should carefully consider all our diplomatic moves and we would like our specialists to be involved in this process. You see, even when the position is absolutely correct, but when they do not consult us, we have an inner sense of unease about having missed something and then we would be very sorry that we have missed it. So we would like to urge you to bring in experts from our nuclear centre and other scientists to discuss this issue. I have nothing against the officers’ assembly, it would never come up with wrong advice, but I think that scientists too would never give bad advice.

Vladimir Putin: All right.

Rady Ilkayev: And the last thing. You have rightly said that we should think far ahead. Without serious development of science there will be no progress and no future, that is obvious, especially since weapons are becoming smarter every year and this is impossible without serious fundamental and applied research. Last year when we were putting together a programme for the development of fundamental and applied research for defence, many people were working on it, including on nuclear and other weapons. We drew up such a programme, but it is slow in getting off the ground. Please, Mr Putin, help us with the launch of this programme as a first step because it involves the Academy of Sciences and practically all the industry-specific institutes. I think it will be useful.

Vladimir Putin: Under what directives was this programme developed? Who did you work with?

Rady Ilkayev: As far as I remember it was a directive…

Remark: It was a directive of the defence industry.

Remark: It was a directive of the Science and Engineering Board.

Remark: It was the President’s directive.

Vladimir Putin: Was the programme adopted?

Remark: Yes, it was.

Vladimir Putin: Very well. Dmitry Rogozin, let us…

Dmitry Rogozin: But it is in some kind of paralysis. I have looked at this programme, it is absolutely viable, and it simply needs to be revived.

Vladimir Putin: All right, revive it and report back to me. Thank you, Mr Ilkayev. Vladimir Orlov, please.

Vladimir Orlov (President of the Russian Centre for Political Studies): Thank you. I would like to come back to the topic of global threats to our security… I think one of the new threats, and I absolutely agree with you there, is the expansion of the nuclear club, which is definitely not in our interests. But if we look, for example, at the Iran situation, we see that sometimes the slogan of preventing nuclear proliferation is used to promote other agendas, namely: they speak about preventing proliferation but in reality they mean a change of political regime. That is something that we should not support, at least that is my opinion. And I think we have gone too far with the UN Security Council resolutions, and the Iranians instead of holding negotiations under pressure, there is too much pressure… When there is talk about strikes they tend to think that perhaps they should do more for their national security and thus we are not going about solving that task the way we wanted to. Isn’t it high time Russia stopped saying yes to everything the Americans propose? I think we have been spoiling them recently and perhaps we should think about resuming military-technical cooperation with Iran and about some other measures: joint efforts not only with European countries and the United States, with whom we are working without breaking off the dialogue on Iran, but also work together on the Iranian issue with such states as Turkey, Indonesia, Egypt, China and Brazil, getting new partners here on the international arena and voicing our own position and not yielding under pressure. Thank you.

Vladimir Putin: I have to tell you, Mr Orlov, that this is exactly what we are doing, we are working with everyone, practically with all the partners you have mentioned. You will of course know, you have mentioned Egypt, it is hard to work with anyone there because the country is in political turmoil, but it is still the leader of the Arab world and the Arab world is highly sceptical about the prospect of Iran acquiring nuclear weapons. The Arab world categorically objects, and the best proof of that is the way the Arab world perceives the events in Syria. All these things are interconnected and we are taking them into account. I think our position on Syria at the UN Security Council shows that we are not going to be yes-men to anyone. I hope that this will continue to be the case. We have our own interests. Of course we must work in a cooperative manner, we must understand what is taking place in the world and we should never be in isolation: that is not the way to ensure our national interests.

On the whole we are on the same page, that is how we are planning to act and your assessment is correct. I also believe that the fight to prevent the proliferation of weapons of mass destruction by allowing another member into the nuclear club, Iran, is used to pursue other goals, such as regime change. We have our suspicions so, as you have noted, our position differs considerably from what is being presented to us as the general approach to the Iranian problem by our partners. But on some points our positions coincide, namely, we are not interested in Iran becoming a nuclear power.

As for the independence of our position, it was manifested among other things in our following through with the work on Bushehr. We have done it despite outside pressure and we intend to continue working independently. Make no mistake about that. We are going to proceed independently (but not aggressively) and in cooperation with our partners in the world. And of course we should always be aware of who shares our positions and at what point we should look for and find allies on each problem. You are absolutely right. Mr Rogov, would you like…

Sergei Rogov: I just wanted to give some information.

Vladimir Putin: … provide a theoretical base?

Sergei Rogov: … Leonid Ivashov was quoting Kissinger and you may have been surprised by the quotation because you meet with Kissinger occasionally. But he never said anything like that. It is a completely false interview published by Komsomolskaya Pravda and it was first published on the British comical website “Quibbles”.

Vladimir Putin: How’s that again?

Sergei Rogov: Quibbles. They publish reports such as these: “Ku-Klux-Klan backs Obama for a second term.” “Margaret Thatcher attends a cabinet meeting dressed as a prostitute.” Well, we were led to believe that this was Kissinger’s true face.

Vladimir Putin: I have to admit that I was really surprised. I have known Mr Kissinger for a long time, for many years. Of course he defends the interests of his own country, but it is very out of character to say what he allegedly said with regard to Russia and China. Yes, I was greatly surprised. I made no comment, but thank you for the explanation.

Sergei Rogov: He simply never said any of that.

Vladimir Putin: I understand. Well, all points of view should be heard. It is good of you to have enlightened us. Next please.

Ruslan Pukhov:  Mr Rogov asked a second question, so may I ask a second question too? Mr Putin, reports are circulating in the press that there is some secret plan to cut military spending and that it may be implemented after the elections. Even if that is not the case, the situation may take such a turn that this ten-year plan of military spending would be impossible to keep in place. Does the government have an idea as to what issues are more important and what issues are less important? To put it crudely, if cuts have to be made, where should they begin and so on?

Vladimir Putin: No, no, no. Let me explain.

Ruslan Pukhov: Please, we want to be reassured.

Vladimir Putin: Yes, I will reassure you and I will do it quite openly, there are no secrets there. The disputed issue has always been this: how much money and time we need in order to modernise our Army and Navy. The discussions ended when the decision was made. The only problem is – and when our opponents look at the problem the way I will tell you now, it is hard for me not to agree with them – will the defence industry be able to fulfil that programme? That is the key question. And if we are to be realistic, and we must be realistic, we should think how we will use the 3 trillion for modernising the defence industry, because as we know and understand, it is impossible to use old equipment to produce some new cutting-edge weapons. We must procure the equipment, set it up and tune it up and train personnel to use it. That is a challenge. In parallel we could tackle other issues: organisation and personnel. If we see that the defence industry is lagging behind in some ways we will have to postpone the deadline by a year or two, I’ll have a closer look at this. But to say that we are already thinking of cutting this funding – that is not the case, we are not doing it and we do not have any such plans, and we are not thinking of what cuts we should make. We are not going to make any cuts. The question is whether the industry will be able to meet these targets. And that is why, as you understand, we cannot plan what should come first and what should come second.

Everything is important. Naturally, the priority remains the same, and I wrote this in my article and I can say it again: the nuclear deterrent and missiles is our absolute priority and we have funded that programme 100%, just like the General Staff has asked. And we have the results: we have formed nine regiments with 39 ballistic missiles. In that sense we are even a step ahead of our American partners: they have yet to modernise and build their new strategic missiles. They used to say that what we have was all rusted iron, but now their weapons are perhaps older than ours. We are slightly ahead already. I am not entertaining any illusions and I don’t want to engage in saber-rattling claiming that we have overtaken them – we have not, but in that segment we are a little bit ahead, half a step ahead of them. Our plans on other elements – the Navy, aviation and conventional weapons, are fairly modest. I don’t see what else we could reduce. Of course we would like to have aircraft carriers but our plans do not yet include that, although we are thinking about it.

In general, it is a philosophical thing. Russia is enormous, huge. We must insure its absolute defence, so that no one will be tempted to even set foot here. All this talk that global resources should not belong to any single country, it should be scrapped, we should not even discuss that topic. I am not speaking about the political aspect. But this is the most important point. Alexei Arbatov has spoken about it, but we should do more to provide a philosophical grounding for our plans. This would not come amiss. But in any case our plans are not overly ambitious. I for one do not see what else we can cut. I must tell you frankly: we can see what is going on in the world economy, we have no control over all the uncertainties that there are. We have seen what began happening in our economy in 2009: our revenues dropped but we retained the level of social spending, even increased it a little bit; however, that was done at the expense of our previous savings, the reserve funds. We do not know how the global economy will develop. If some adverse processes take place they will affect us as well. We will have to act in accordance with the reality, our budget revenues and the need to meet our social obligations. Then we will see, together with specialists, including many of those present, and think how to rearrange these plans. So far there is no intention to change these plans and I hope no change will be needed. I think it is time for us to wind up.

I would like to thank everyone for this meeting. I hope that we will implement the proposals made here today, whether in this or in some other format, but I am absolutely convinced that we should meet regularly, though not perhaps too frequently. Thank you very much. I wish you all the best.