29 january 2009

Prime Minister Vladimir Putin met with members of the International Business Council at the Davos World Economic Forum and answered their questions


Question (as translated): How would you like the world to see Russia? What image would you like Russia to have? 

Vladimir Putin: You know, I answer this question so often that I don't even know where to begin. It seems to me we spelled everything out a long time ago.

The first thing I would like to say is that we do not expect some kind of an exclusive deal. We want to be seen as an equal partner, without any exclusions or exceptions. Yesterday, when there were not that many questions, one of the first ones was: "How can we help you?" And I said we were not people with limited abilities, and we did not need to be helped. What we want is equal cooperation. And that is really true.

COCOM lists have been formally abolished, but in reality there are many limitations, above all, of course, on technologies and even purchases of finished products. These limitations keep growing all the time. In Europe, there aren't as many of them, but they still exist.

For example, there are enormous anachronisms in our relations with the United States. The US still has not abolished the Jackson-Vanik amendment, which was introduced because of a limit on the departure of Jews from the Soviet Union to a permanent place of residence in Israel. There is no Soviet Union any more, nor does such a problem exist, but the amendment is still in force. This is a total anachronism and has nothing to do with common sense.

I have very good relations with many of our Israeli partners. Many of them have made a career after leaving the Soviet Union for Israel. When the US Congress once again refused to revoke the amendment, citing Russia's measures to protect its chicken meat market, one of the Israeli leaders wrote a letter to me, saying that when he was imprisoned in Soviet times, it wasn't because of chicken meat, and he just could not understand what the Congress was doing.

There are, unfortunately, plenty of such examples left over from the Cold War. But the main limitation is, of course, in our minds. And, to my deep regret, I must admit it also exists in certain parts of Russian society, too, as well as in Europe and America. We really need to get rid of that.

First of all, we would like to have the image of an equal and reliable partner. Here I would like to draw your attention to the following circumstance: Currently - we will perhaps talk about this later - we are going through difficult times because of the financial and economic crisis. And we could have taken some steps that at first glance would seem logical in this situation. I am referring to, say, a return to the restrictions on the free movement of capital and currency. But we have deliberately avoided doing that, aware that in that situation we would have faced a significant outflow of capital. First of all, of course, the outflow of what might be called speculative capital. And this did happen. The volume was vast: $130 billion. But we accepted that with open eyes, intending that these actions by Russian financial authorities and Government as a whole give a clear signal that we will try to fulfill all our commitments. And we are doing that to make our economy and our country open to the world.

To my mind, we have achieved a good deal in the recent period. But I would like to return the ball to your part of the field. I am asked all the time what kind of image I would like Russia to have. But why don't you think about your country's image in Russia? Why is Russia asked about it all the time? Do you think everything is all right in other countries, including Western Europe and the United States? There are plenty of problems there, and you shouldn't turn up your noses and think that everything is swell. There are some things in Russia that have not yet reached certain civilised standards. In some areas, we are still working towards our targets. But there are some things in other civilisations, not just the golden billion countries, that work well, you see?

Generally, the world should change in the sense that we need to become more critical of ourselves and give more attention to what is happening around the planet. And then, so it seems to me, we will achieve greater harmony. Thank you.

Question: Thank you for your honest answer. It makes it easier for us to understand what we can expect from you, and what you can expect from us.

Now to the Initiative 2020, which is being implemented in your country. If we look at the role of globalisation, how can we involve the huge corps of talented engineers and technologists? What mistakes are we making? What are the positive and negative elements? Can you tell us what we must do to make Russia a member of the economic and political economic community?

Vladimir Putin: Yes, we have approved Programme 2020 aimed at modernising the country, its economy and social sphere. I did not quite understand the part of your question where you spoke about mistakes. Perhaps the translation wasn't quite right?

Clarification: I was referring to the mistakes [foreign] companies have made or can make in Russia.

Vladimir Putin: I see. You know, we must put an end to these colonial practices. Everyone must respect the laws of the host country, the laws of the country where a company is working, and act as befits civilised people.

In general, it is not a new idea that business must be mutually beneficial. We have vivid examples of situations when we had to change the terms of our interaction with partners that were formulated in the early 1990s in disregard of Russia's interests. I can assure you that our partners understood why we did it. We have other similar examples, which are still relevant. For example, we agreed to implement the CPC project, the Caspian Pipeline Consortium, to build a pipeline for shipping Caspian oil from the Caspian Sea to the Black Sea. And what happened there? How were the terms formulated?

I think this audience knows exactly what happened there. Loans were issued on such terms that would not have allowed Russia to receive even minimum profits from the operation of the system in the next 25-30 years. Why did they do it? Of course, when we saw our mistake we acted to correct it.

Why indeed? Don't try to trick us, to pull the wool over our eyes, as they say. Let's just work honestly and in a civilised manner. And abandon the colonial ideology, stop thinking that you can go there, grab our wealth, and run away.

The world is becoming globalised and interdependent, and this process will not stop soon; it will last a long time. If we want to have civilised relations, we should build them at the initial stage in our relations.

We spent much time discussing with our German partners the terms of building Nord Stream along the bottom of the Baltic Sea. As a result of lengthy but very constructive talks, we agreed on civilised and partner-like forms of interaction. In fact, we have exchanged assets. For the first time in the history of our gas industry, we have allowed partners to take over a large stake in a company that holds the development licence for one of Russia's largest deposits, South Russkoye. We also gave our partners a 49% stake in the gas transportation system. In return, Gazprom received a stake in West Germany's gas distribution system, which we see as a partner-like and honest approach to developing long-term relations on terms that are beneficial for everyone.

If we act in this manner, we will create a system of interdependence I mentioned yesterday in my opening address at the Forum. And then we will develop long-term relations based on real partnership not only in energy, but also in high technologies, space, and aviation.

I admit that we are now conducting a very difficult dialogue on aircraft manufacturing with EADS, but we think that when you develop relations they should rest on the same foundation as relations between the other members of the consortium, the European members.

Otherwise what happens? If a country, say, Spain, has a small stake - I don't remember how much it has, I think it's 5% - part of production is moved to its territory. Let us also apply this principle to the Russian partners when we negotiate long-term cooperation. This means that part of production should be moved to our territory.

It may be difficult to part with some production assets - we know how delicate this issue is - but it must be done if we want to develop long-term relations. And we would be happy if these relations prove to be lasting and fundamental.