Opening remarks by Prime Minister Vladimir Putin at a meeting with the participants in the 5th Valdai International Discussion Club:

Vladimir Putin: First of all, I would like to greet you all. Good afternoon.

I understand this is our fifth meeting, and if interest in this format of communication remains high it means that there is demand for it and that those present find it interesting.

I would like to say that my colleagues and I also find these meetings interesting and important because we can talk directly with the people who, as I said last time, have chosen as their main job the coverage of Russia, its policy and international relations. I am glad to be meeting with experts and I welcome the opportunity to have a live and direct dialogue about the most acute problems facing humanity as a whole and Russia in particular.

One of the most acute problems today of course is the situation in the Caucasus around South Ossetia and Abkhazia, everything connected with the recent tragic events caused by the Georgian leadership's aggression against these states. Note that I say "states" because, as you well know, Russia has recognised their sovereignty.

I am of course ready to discuss that topic, although I would not like our discussion to be limited only to the problems of South Ossetia, Georgia and Abkhazia; I would like it to cover a wider range of issues and problems that we can discuss and debate. You can be absolutely sure that, just as in our previous meetings, the position I will set forth will be absolutely open, honest and straightforward. I am not sure that we will see eye-to-eye on every problem, but you can be sure that I will give direct answers and that it will be a frank discussion.

Once again I would like to welcome you and wish you a pleasant time in Sochi. And enjoy your meal.

Thank you very much.

That is all I would like to say in the beginning because long speeches are tiring, especially for those who listen to them. Let us get down to our dialogue.

Thank you very much for the patience in listening to me.

Svetlana Mironyuk: Dear colleagues, on behalf of the Valdai Club I would like to give the floor to one of our veteran participants, Jonathan Steel, for introductory remarks and the first question.

Jonathan Steel: (re-translated from Russian) Thank you very much. Of course, I have attended all the five meetings. It is an honour to us to be here again. The first time we met, as you mentioned, was after the huge tragedy in Beslan. Now we are meeting against the background of a major tragedy in the Caucasus. So, obviously I should start with South Ossetia.

I am aware that you, like all Russian officials, were angry with the reaction of the West and the Western media to what happened in South Ossetia. But in covering this conflict the Western media genuinely tried to present an objective picture. They promptly reacted to the start of the war; they reported that Georgia had provoked that war; Western journalists went to Vladikavkaz and interviewed refugees from South Ossetia who spoke about atrocities by Georgian troops.

But in the next day or two the situation in the region changed. The Russian military, allegedly on behalf of South Ossetia, pushed out the Georgians and occupied that territory. The Russian troops moved further, and while initially you seemed to hold the moral high ground, so to speak, the situation later changed. Russian planes began to bomb Gori, and the number of refugees on the Georgian and Ossetian sides only increased as a result. The operation came to look more like revenge against Georgia than defence of South Ossetia. So, this is my first question: why did Russia go so far beyond South Ossetia into peaceful Georgian territories?

Allow me to elaborate by asking the second question about a broader view of the problem of security because, as you have said, we are not only talking about the Caucasus. We heard even before this crisis that Russia was going to propose a totally new European security architecture. The topic will be discussed this autumn. The idea of course takes on added importance because we see the danger of aggression from both sides caused by the enlargement of NATO and the accession of Georgia and possibly Ukraine. In this context, could you tell us what concrete proposals Russia is preparing on a new security system which will either replace or include NATO, and which obviously will assign Russia a very different place in Europe compared with the place your country occupies today?

Vladimir Putin: I am not surprised by your question. What does surprise me is the power of the Western propaganda machine. It is terrific and amazing. It is simply mind-boggling.

This is of course due to the fact that first, people are open to suggestion and second, ordinary people do not follow world events and it is easy to impose on them a point of view and falsify the real course of developments.

I do not believe that there are people in this room who do not know the reality. In any case everyone in this room knows and understands how the events developed in reality.

The reality was as I described it in my public statements, notably to CNN and ARD: without any provocation the Georgian armed forces - and these were armed forces and not some individual groups - launched an operation "to restore constitutional order in South Ossetia", as they put it. As early as the evening of August 7, practically in the afternoon, they started shelling our peacekeepers' camps and launched a ground operation, set up field hospitals close to the place of hostilities to receive the wounded, in accordance with military science; they attacked our peacekeepers' camp and in fact launched large-scale military operations using heavy tanks, artillery and infantry. Outnumbered by the Georgian armed forces by 7 to 1, our servicemen had to retreat to the city centre from the south and the Georgian troops seized the peacekeepers' camp called Yuzhny. In fact the Georgian troops seized almost the whole of Tskhinvali, including its centre, and only the northern part and our Severny camp continued to hold out against the attacks. After that bombing raids were launched on the whole of South Ossetia, including the city of Java in central South Ossetia at some considerable distance from Tskhinvali.

So, a small unit of peacekeepers and local militias held back these attacks for almost two days - it all started in the afternoon of August 7 and our troops did not reach Tskhinvali until the night of 9 and 10.

And you know what? I was in Beijing at the time. I looked at the world electronic media and there was complete silence, as if nothing was happening. It was as if somebody had given the command. I congratulate you. I congratulate all those who are doing it. You did a great job of work. But the result is ugly. And it will always be that way because it is dishonest and immoral work. Immoral policy always loses out in the long term.

Actually, let us look at what has been happening over the past year. If you noticed - and the people present here do follow events - we made the point at practically every international meeting -- I personally made it repeatedly -- that tensions were growing in the zone of the Georgia-Abkhazia and Georgia-South Ossetia conflicts. Our American partners were training Georgian forces. They invested considerable money, sent over a lot of instructors who mobilised the Georgian army and instead of engaging in a search, admittedly, a difficult search, for a solution to ethnic contradictions and ethnic conflicts, they egged on one of the parties to the conflict, the Georgian side, to aggressive actions.

This is what really happened.

Of course we had to respond, how else should we have behaved? Did you expect us to wipe our bleeding nose and bow our head down?" Do you want us to act in way that would throw the situation in the North Caucasus and Russia totally off balance?

I can tell you more, we are aware of the creation of non-governmental organisations in some republics in the North Caucasus, which, under the pretext of our failure to defend South Ossetia, raised the question of secession from Russia.

So, if we defended South Ossetia it was bad, if we had not defended it we would have been on the receiving end of another blow that would throw the Russian North Caucasus out of balance. This is the limit of impudence.

Now, why did we act as we did? Because the infrastructure used to attack Tskhinvali, our peacekeepers and South Ossetia as a whole stretched far beyond Tskhinvali. I am referring to control centres, radars and arms dumps. What did you expect us to do, wield a stationery knife there?

Next, I hear about disproportionate use of force. And what is "proportionate use of force"? When they use tanks, rockets and heavy artillery against us should we respond by using catapults? What is proportionate use of force under the circumstances? Of course those who launched this provocation should have expected to take as they gave. If there are points of controlling a territory or a conflict zone they have to be targeted. How can it be otherwise? This is what military science dictates.

Now about our going in and why we went in. I have already explained the military side.

Let us remember how the Second World War started. On September 1, 1939 Nazi Germany attacked Poland. Then they attacked the Soviet Union. Should we have reached our own border and stopped there? By the way, not only Soviet troops entered Berlin; there were also the Americans, the French and the British. Why did they have to enter Berlin? Why weren't they content to stop at the border? They didn't. The aggressor had to be punished.

And regarding the sovereignty of the former Soviet republics. Russia initiated the dismantling of the USSR. If it were not for Russia's position, the USSR would still exist. We made that decision a long time ago. We have no wish to challenge the sovereignty of the former republics of the Soviet Union. We support it. But what is the reality on the ground?

First, as I have said many times, we must have common rules of behaviour in the world. It is not right to talk up the right to national self-determination in Kosovo and emphasise the principle of territorial integrity in the case of Georgia. We should at long last agree by what set of rules we are going to live.

We have said it many times, we have issued warnings. We warned against Kosovo setting a precedent. But the West was adamant. Nobody wanted to listen, they forgot about international law, forgot about the UN resolutions, everything. They did as they wanted because they thought it was good for the geopolitical interests of our Western partners, above all the American partners, while the Europeans just tagged along. Anyway, they did it.

But I would like to remind you that in the wake of Kosovo we did not recognise the independence of Abkhazia and South Ossetia. We stopped short of that. As I said in public quite recently, we "swallowed" it. The only thing that I did at the time was to sign a decree on the development of economic relations with these territories. By the way, that was in line with United Nations requirements, because the UN was against the economic isolation of these territories. That was all. In principle, we were prepared for further dialogue.

And yet armed forces were used. Some quarters are so fond of shooting and bombing that they thought they would succeed here too. Why did they think that they would succeed here when they had no success elsewhere, in Afghanistan, Iraq and the Middle East? They failed here as well, and those who believe that it is the most effective instrument of foreign policy in the modern world will fail again and again.

Russian President Dmitry Medvedev has asked me to make new agreements. What are they?

The principle should be the same, as you understand: we should agree by what rules we will abide. It is quite obvious that not a single country, even a country with the most powerful economy and the most powerful armed forces, can solve all the problems in the world independently without bringing in effective partners. But in bringing in partners you have of course to consider their interests.

One cannot behave in the world like a Roman emperor. One should consider the interests of partners and respect them. We offer such an approach and we are ready for this work.

Next question.

Richard Sakwa: I would like to follow up on that question. Did you consider the historical background of the relations between Russia and the West? I mean not only the last 15 years or even the Cold War in its classical meaning. We can think back to 1892, when Griboedov signed a treaty with Persia. It infuriated England. In 1839 it launched the first war in Afghanistan, a colonial war. In 1877 - St Stephano. For 200 years Russia had been unable to establish a durable and trusting relationship with the West. Why hasn't it been possible?

Vladimir Putin: Listen: you are asking me why Russia could not establish a durable relationship with the West. I am asking you why did the West fail to establish a durable relationship with Russia?

So, we should work on both sides. That is what I said answering the first question: both sides should exert efforts.

You see, when we talk about an equal relationship, it means respecting one another. And that means recognising the other as an equal partner. And if the United States, like Western Europe... I don't mean to offend anyone, but Western Europe does not have a foreign policy. Russia cannot and will not work in such a system of relations. But we seek normal partnership relations. Go ahead and build up these relations.

You have mentioned bygone days: the 19th century, the 20th century. Indeed, there were many clashes of interests. But the world today has changed. Look at what is happening in the political practice of our American partners. Our American partners do not allow themselves to be challenged by anyone on the American continent. This is considered to be its holy of holies. But sending ships with missiles to within 200 kilometres of where we are - is that normal? Do you call that equality?

So I would put it this way. Of course we must analyse the past - he who does not know the past has no future, as is known - but we must proceed from realities. Today we have no ideological contradictions, like in the Cold War; there is no basis for a cold war.

Of course, contradictions may arise. There may be competition and geopolitical interests may diverge. But there is no solid foundation for mutual hostility. At least that is my thinking.

On the contrary, we have many common problems that we can successfully tackle only by pooling our efforts. They are all well known: terrorism, non-proliferation of WMD, and infectious diseases which pose a great threat to mankind. And who knows what else may crop up.

We know the sensitive issue of non-proliferation with regard to North Korea, Iran and some other issues. It is not by chance that our partners are urging us to be more active in this area, and we are ready to cooperate.

But let us not forget that we must proceed from realities. There are experts in this room, I repeat. You know that Ossetia became part of the Russian Empire - you have just been recalling earlier centuries - in the middle of the 18th century, it joined the empire as a single state, as a single territorial entity. It was only 100 years later that the southern part of that single state became part of the Tiflis Gubernia, not of Georgia, but of the Tiflis Gubernia. The transfer happened within the framework of a single state.

Now the single state has disintegrated, but the Ossetians do not want to live there, they do not want to live in the Tiflis Gubernia. Georgia wants to be separate from Russia. It does not want to be part of Russia and we recognise that right. But why doesn't Georgia want to recognise the right of a smaller people, a still smaller people than itself, the Ossetians, to live independently?

If we agree on common rules, I am sure it would add substantially to stability in the world. Unfortunately there is no stability at present. Today even those who seek to develop their armed forces cite instability and absence of guarantees under international law because they feel that it does not exist.

I think if we exert efforts on both sides, we will be able to build a relationship and it would benefit both our Western partners and Russia.

However, my last remark would be as follows. You have said, the West on one side and Russia on the other side. The West is not homogeneous. Is the West such a monolithic structure? Is the West a geographical or a political notion? What is NATO? And what is Japan? Is it or is it not part of the West?

By the way, in Asia too there are a lot of problems, not only North Korea. Historically the relations among the states there have not been simple. Very complicated, considering the growing power of some Asian states. It would be wrong to pretend that it is nobody's business: the situation is acquiring a global character.

The West is very heterogeneous and Europe is very heterogeneous. The monolith was created during the Cold War. It was in a way "frozen" because it faced a common and presumably very dangerous enemy, the Soviet Union. That enemy is no more. It does not exist and the Europeans are not afraid.

No matter how much scare-mongering may surround the Caucasus, everybody understands that this cannot spread to Europe. This is impossible. Russia is different, we have none of the imperial ambitions of which some accuse us, and we will never have them. Our society internally is different, imperialism will not go down well with it.

However, building a constructive relationship with our partners in Europe and the United States and Asia is something that we can and must do. We want it and we know that this is what Russian society wants, and we are committed to such a policy in spite of all the diplomatic complexities.