Putin spoke on energy security, press freedom and 2008

Russian President Vladimir Putin in course of his annual press-conference expressed views on energy security, the situation in Russia, press freedom and what will happen when his term comes to an end in 2008.

This year a record 1,200 journalists have been accredited for the event.

One of the key topics Mr Putin covered at the beginning of the conference is the economic development of Russia in 2006.

“The country’s economy developed at a high rate,” Russian president stressed. “The final assessments will be received in March, but according to early estimates, in 2006 the growth of GDP was 6.7-6.9%. This figure is approximate, still it’s better than the previous result of 6.5% [in 2005]. In order to reach one of the key objectives – to double the GDP within a 10-year period – we need to have GDP growth rate of about 7%. In the year 2006 – for the first time in modern Russian history – we have achieved a one-digit inflation rate of 9%. Especially pleasing is the fact that this agrees with experts’ forecasts. And I recall that in the year 1999, when I became the head of the Russian government, the inflation rate was 36.5%. Now we see that over the past years a lot has been done to cut down inflation, and we should not stop at that. By the year 2010 we have to reach the level of 4.5%. Besides, earlier we had to pay back former Soviet Union debts, so [in 2006] we paid $US 22 BLN in advance, discharging not only Russia's debts, but also the debts of all former Soviet Republics. In the mid-1990s the [external] debt of Russia was around $US 165 BLN.”

Russian president also explained how Russia came to be one of 10 major economies of the world.

“Now we have about $US 88 BLN in the Stabilisation Fund,” he said, “and we’re sure this will help maintain stability even in the case that oil product prices or energy prices plummet. But this is hardly possible. On the contrary, a growth of those prices is expected. So the capitalisation of major Russian companies has been on the rise,  it grew by more than 90%. Market capitalisation in the last year also continued to grow at a high rate – over 80%. The year 2006 can be, no doubt, dubbed ‘The Year of IPO’ as big Russian companies made a large-scale IPO campaign, both domestically and internationally. It was worth dozens of billions of US dollars. The capitalisation of Russia’s stock market reached the level of around $US 1 trillion, with this index Russia has joined 10 major world economies. And this is only the beginning.”

President Putin considers foreign investment to be one of the key factor that helps develop basic sectors of Russia’s economy. And the growth of the investment rate is «…the result of a well-planned policy of the Russian government and the Central Bank of the Russian Federation,» he believes. “Favourable tax system and some changes in the customs policy have made it possible to boost whole sectors of the economy. I’m pleased to tell you that investment in the basic sectors made a record 13.2%, and 13% was the growth  in the retail trade. As for the construction sector, it  broke all previous records with its 15.7% growth in 2006, compared to the average rate of about 7% in earlier years.”

Below there is a transcript of several questions asked of President Putin, and his answers.

US National Public Radio: Recently you said that “superpower” is the absolute long term legacy of the Cold War period and you said that other countries would like to create an image of Russia as an enemy. Could you specify which countries would do that? Does it include Washington or London, if no, who specifically would like to sour the image of Russia? 

Vladimir Putin: We’ve always had this image of Russia regularly used and it is emerging as the economic leverage to attain foreign political aims. This is not so. The Russian Federation to the full extent has always fulfilled all its obligations, but we are not obliged to subsidise the economy of other countries in large scales which are comparable to their budgets. Nobody does that, why should we be demanded to do that. That’s the first thing. Second, what we have been doing and what we have been agreeing with the transit countries is aimed at all insuring interests of the main consumers. I can assure you, that experts are fully clear about that. Just imagine, if in Ukraine we signed annual contracts for supplies to Ukraine and for transit to Western Europe and always consumers in Western Europe were dependent on whether we would be able to agree with our Ukrainian partners or not. We have now divided these two notions and ideas and we set out transit market relations conditions and once again – experts are fully aware of the situation. They should tell us thank you and instead of that we have been witnessing an attitude in ill faith to interpret the ongoing events. I’m not saying that it is done on the government level but there are such forces. Those people who are writing this, exactly default those who are not inclined favourably to us. If you go and write that, you are one of them, if you give them an objective picture, then you don’t belong to that group.

Vladimir Kondratyev, NTV television: Under president Yeltsin we dealt with the practices when he now and then cited possible continuers; and, quite the contrary, under your governing we haven't had any mentioning on your behalf up to now. We all are somewhat puzzled. Whether during the reforms of setting new political parties will there be a transparent and predictable system of in advance selection of the officials for the top positions. Even if we do not know the man to get a better chance to become the Russia's president the country now enters a very important part of its development, an uneasy period of elections. What are the political forces which will struggle at the elections?

Vladimir Putin: You have used the word “governing”. I am not governing, I am simply working. As for the well in advance preparation of people to fill in the highest state positions as a rule those are the posts to be filled via elections. In any case it's up to the electorate to decide. As for the civil servants positions there are special departments in the administrations dealing with human resources. They fulfil their functions. We are working in this field. We lack good, well-prepared managerial staff but the situation changes for the better and I am sure the rate will accelerate. As for the issue of the successor I have many times spoken on the subject. There will be no successors nominated. There will be presidential candidates. The function of the government is to ensure that the campaign is reflected in a democratic way in the mass-media. The positions of all candidates will be disclosed for the voters to make their choice.

Elena Glushakova, RIA Novosti news agency: Many analysts believe Russia encircled itself with unfriendly states. Do you agree with this? What countries in the neighbourhood could be regarded as partners to Russia?

V.P.: We are building partnership relations with all the countries. They are closer with some countries. With the CIS even if there are some problems, for instance with Georgia we still cannot regulate our relations but there is the EuroAsian Economic Union, in the framework of which integration processes are actively developing. There is also the Collective Defence Organisation. As for the relations with other countries we are generally satisfied with their evolution. To set up pragmatic relations on the basis of a businesslike approach, envisaging national interests is not always possible without certain tensions and nervousness. We always recall one well-known wisdom in such cases: “If you are angry that means you are not right.” We do not want to have any complications with anybody. When I hear that as you said we are encircled with the ring of unfriendliness – it is not true. In the beginning of 2006, we had some tensions with our partners and friends from Ukraine regarding transit and energy resources. One of my European partners told me: “There will be political changes, Yanukovich will get more clout. Do not change your position concerning energy resources.” I said that was not a political decision but economic. Last year Ukraine got gas at $US95 per 1,000 cubic meters, this year – at $US135 irrespective of the fact of substantive changes there. Our relations have not worsened but improved and became stronger and more reliable – both for us and for Ukraine. We are always ready to help Ukrainian people, government and president if they ask us to do so. The most important thing that we agreed with them is market relations for today and tomorrow. We signed the agreements with all the transit countries dealing with a soft shift to market conditions. This does not depend on our political relations with those countries. For instance, we have very stable, even strategic relations with Armenia which pays for the energy resources at the market level. There were certain problems with Belarus on the energy price. But still we signed an agreement on transit and the change of prices for energy resources leading to market conditions. It is not important how much they pay today. The most important thing that we fixed in the documents of the stages of mild transfer to the market. We would like to carry on with no changes but it is no longer possible if we are separate states. We are continuing to build a Unified State with Belarus and hail the changes made by the Belarusian leadership, bringing the tariffs for the crude oil and oil products to the common ground. These are the real steps to setting up the fully-fledged customs union. We expect the setting of common currency – this is not a lost cause. Our Belarusian friends are able to analyse realities and understand the reliability of the Russian national currency and maybe to come up with some unified currency – not necessarily Russian rouble or Belarusian currency. We initially planned to do this starting with the use of the Russian rouble. It is all possible. We will be defending our own interests. Look at agriculture where there are billions worth of subsidies in the EU. Hungary has got 1 BLN euros of subsidies from the EU this year and they want to throw all their geese on our market but we are not allowed to enter their market. This appeared a long time ago when we were only consuming imported food. Now we have got export potential. Last year we sold about 12-14 MLN tones of grain. This year, the tempo is the same, we have already sold 6.5 tones; so, by the end of the year, it will be around 14 MLN tones. Nobody waited for us to come to this market but we shall patiently talk with them. We never act in an aggressive confrontational manner. Last year we held the G8 summit in St. Petersburg and it was said that our relations have soured but we have not noticed that. On the contrary, we have become more pragmatic, more stable and reliable."

Andrey Kolesnikov, the Kommersant newspaper: After what you have done over these years and lived through, will you want once again to come back to major politics in your career? I understand there is a temptation to say that you are not leaving major politics and basically that is true, but I think you can afford to be sincere with us.

Vladimir Putin: I can afford being sincere with you, and yes, I’m not leaving politics. First, presidential elections in the Russian Federation will take place somewhere in the beginning of March of year 2008, and after that, 2-3 months later, I guess, that’s the time for a new president to assume his position, so we are talking about another period of time, and don’t push me out before that, I’ll leave on my own, when the right time comes. As for responsibilities for what is going to happen with this country, yes, I have a sense of that. That’s not a joke and that is very important. That is a very important stage in the history of the country, as I have already said that the main task of the future will be retain and ensure high accumulated tempos of development of the country. And this is not possible to do without consolidating authorities of all levels. Without consolidation of legislative, executive branches, both in the centre and in the provinces, we will not be able to ensure continuity in those rates already attained, and without the difference of political forces, there are many themes on the scene in the country, it is important that they could go above the national ambitions and focus on a joined effort. Whatever I think about it and whatever I do, finally it is the choice of the Russian Federation to be made there.

Oksana Boyko, Russia Today: Have we exhausted the energy conflicts on the space of the former Soviet Union? In Europe the voice has been heard regarding diversification of supplies from different sources. Do you think such appeals will be implemented or are they just appeals, and does Russia doing everything it can to ensure energy security or are there some reserves which are to be further tapped into?

Vladimir Putin:  With regards to exacerbation of relations with our neighbours at the beginning of the year – the transit countries – I will be very frank with you. Last year we had these problems with Ukrainian partners; all the difficulties were settled with the optimum possible solution under these circumstances. For 15 years Russia not only provided sort of “independence” of those states, but over the 15 years it subsidised very largely the economies of those countries. What we did in reality was support and strengthen their independence and sovereignty.  But 15 years are quite enough; this could not go on forever. We have our own problems – pensioners, military, medical doctors, teachers and so on. There are a large number of people living under the poverty line in our country. Once again, we are doing that very softly, quietly in a partner spirit, but couldn’t do that all together with Ukraine and Belarusia. We couldn’t open those hostilities at all -say – frontlines. To be honest with you, we didn’t want to cause any harm to Belarus, because of the upcoming political events there. We didn’t want to create problems, and as it goes to transferring the market relations with Belarus we informed our colleagues 3 years ago, and last year, in March, we transferred those proposals in writing to them. Incidentally, those times there were no objections expressed whatsoever and we couldn’t build on our dialogue until late November last year. I hope that such a negative attitude which has taken place with regards to a changing to market relations is already in history.   Transit countries have already agreed on this and signed the necessary documents. So we hope they will be observed both by the Russian side and by our partners, taking into account their interests, I would like to emphasise this. We should be partners. That’s a good chance for me to expand the subject. Why didn’t we have any problems before?  We understand now that all these transit routes for oil and gas, do you know where they were laid – either on the territory of the Soviet Union or on the territory of the so-called Eastern Block?  Now transit countries have understood their importance and want to get some revenues for transit. But we have been paying them $US 4.2 BLN. If this figure goes above the roof, sometimes it does, and then we will try to seek to find routes for direct deliveries, that’s why we are building the pipeline at the bottom of the Baltic Sea, also we will expand our possibilities regarding overloading in the North-West. Transneft has started to do that work regarding the planned expansion of the terminals in Primorsk, in addition to 50 MLN tones of oil.  This will substantially bring down our dependency on the transit countries. We will speedily continue the construction of pipelines to the coast of the Pacific, so we can directly reach those developing markets in Asia.  And I don’t see any hurting in what our main consumers in Europe are telling us or changing towards diversification with regards their energy policies. We are not afraid of that. We are diversifying our routes of delivery. We need to think where we shall sell our product. We are going to build in China, in Altai area we have laid a line, on the bottom of the Black Sea, “The Blue Stream” and now we are thinking of another line – with possible access to Central Europe or Eastern Europe, probably to Hungary or Austria, to Italy or Israel. Thus we are not concerned at all regarding the plans of our European partners. We have been developing our co-operation with them, concerning putting together our assets, and we are looking on long term – till the  2030 and 2035, and all this becomes more stable.

Associated Press news agency: After the murder of Anna Politkovskaya you said that there are people hiding from Russian justice who would like to hamper reputation of Russia and after the death of Aleksandr Litvinenko your aide Sergey Yastrzembsky said that could be a part of conspiracy. Can you tell us in more clear manner do you believe that there are foreigners or Russians living abroad behind those murders? Who are they? Can you name them?

V.P.: Only the prosecution can say who's behind those murders. Moreover, it's the court of law that provides the final decision. The problem of journalists' persecution is one of the most acute in many countries. We do everything possible to protect journalists in Russia and we realize all the responsibilty. Anna Politkovskaya was a sharp critic of the Kremlin, which was good. There was also Paul Klebnikov who, as one of our american partners said, died for democratic Russia. As for Litvinenko, he was fired from the interior security services, where he was a guard. He didn't know any top secrets. He was involved in mis-using his office, that is by beating the detainees and stealing explosives. He was put on probation of just three years so there was no need for him to run away. Everything negative he could say about his service he said before. The investigation will show what really happened there.

Al-Jazeera, Moscow: In a few days’ time you are going to make an historic visit to the Persian Gulf region as you’re the first Russian leader to do it. What attracts your interest in this region? Is it connected with the growing U.S. presence there?

V.P.:We’re not going to enter into competition with any country in any region of the world. What we’re seeking is co-operation. Russia has always had a major interest in the Persian Gulf area and in the Middle East in general because historically we’ve always had very stable and strong links with that region. So now we’re developing co-operation with it and we feel mutual interest on the side of our partners. Russia hopes to contribute to the Middle East stabilisation process.

Georgian Public Broadcasting: Yesterday in Georgia the ambassador of Russia presented his credential letters to the President of Georgia. Does that mean that relations have been restored and does that mean that transport will be restored soon and Georgian goods will return to Russian markets and Russian visas will continue to be issued? 

Vladimir Putin: When we met with the President of Georgia in the city of Minsk, we were asked whether we do need the CIS as an organisation, and together we pointed out that if there were no CIS we wouldn’t have an opportunity to meet with him, and have an opportunity to discuss these problems that have risen between our two countries. At that meeting we identified the major problems and identified the ways to resolve these problems. And we do understand the desire of our Georgian partners to purchase natural gas below the market prices and we make it possible to try and resolve this problem in a constructive way.  And you know of negotiations, which have been conducted with Azerbaijan and Turkey. We do export to Turkey. Iran has failed to export the needed amount of natural gas to Turkey, and therefore our Turkish friends asked us to increase our shipments of natural gas, and we do this. We respect the position taken by our Georgian partners and as planned we have brought our ambassador back to the embassy in Georgia and we believe that will be the first big step to settle the outstanding issues. When we see drums beating at press conferences in Georgia saying that “the ambassador is back, we won”, let them have these feelings, we are very calm about this. The main thing is to improve our relationships and promote normal relations.

The Xinhua News Agency, China: What is your vision of a new way of co-operation between Russia and China?

V.P.:I think, large-scale events like the Years of Russia and China can only bring benefits to both our peoples. These are direct people-to-people contacts that help to teach about achievements in the fields of science and culture, and they establish direct contacts between business communities. Besides, very good developments are underway in the political sphere. Our relationships are based on a mutual desire to have strong economic ties. This co-operation is and will be continuing in future. People-to-people contacts create a humane basis for it, enhance mutual confidence and help to remove the existing barriers. I have no doubt our Chinese friends will successfully organise the Year of China in Russia while their Russian partners will do their best to help. As for new ways of co-operation, they are first of all, new investment and hi-tech projects, both in civilian and military sectors.

Helsingin Sanomaat Finnish newspaper: Currently in Finland people are talking a lot about the possibility of joining NATO. What do you think about this? Will it affect relations between Finland and Russia?

V.P.: This question surfaces now and then. You are aware of our attitude towards NATO enlargement. We do not think this will promote enhancement of security in the world. Finland is the fully-fledged member of the Western community, and member of the EU. Bringing military structures closer to the Russian border will not promote the improvement of the atmosphere in the bilateral relations. What really matters here is that modern threats and challenges concentrate in the fields of combating terrorism, drug trafficking, human trafficking, organised crime, proliferation of mass destruction weapons and the means of their delivery. These problems can be addressed only together regardless of the existing military blocks. As far as I know the leadership of Finland agrees with that but the final choice is up to the Finnish people and the Finnish leadership.

Rossiyskaya Gazeta daily, Russia: The U.S. plans to deploy anti-missile bases in Poland and the Czech Republic. Isn’t it the USA's response to Russia’s growing military power, including in the weapons market? And sanctions imposed on our companies may be regarded as a kind of retaliation.

V.P.: Sanctions continue to be imposed on Russia’s companies. We take it as a kind of unfair competition. Indeed, we have occupied a very important niche in the international weapons market, and we continue our effort in that sphere. This is regular competitive practice in the international markets, there’s nothing special about it. As for the U.S. plans to deploy anti-missile systems, they have nothing to do with the growing military power of the Russian Federation because those plans had been announced a long time before we started regaining military power. And I have mentioned earlier that our defence budget is 25 times as small as that of the U.S. Of course, we have to enhance our external security, and our response will be asymmetrical, but effective to the utmost. Right now we already have technical means of penetrating missile defence systems (Topol anti-missile has been equipped with such a system); we will develop new-generation weapon systems… which can make missile defence systems helpless. Our military experts do not believe that the anti-missile systems deployed in the European countries are designed to combat threats coming from Iran or some terrorists. What terrorists can have ballistic weapons?! And the flying trajectory of hypothetical missiles that could be launched from Iran’s territory is well-known. Besides, Iran does not have ballistic missiles, it only has medium-range missiles of about 2,400 km range, I don’t remember more exactly. So we dismiss such arguments as unfounded and, that goes without saying, this will provoke our response, an asymmetrical response.

To read the full transcript please follow the link below

http://www.kremlin.ru/eng/speeches/2007/02/01/1309_type82915_117609.shtml

Later, Russia Today’ s political commentator Peter Lavelle highlighted some of the most important aspects of Russia’s political  and economic situation that President Putin touched on at his press-conference.

Speaking about the possible successor of today’s Russian President, Mr Lavelle said there were not many hints in President Putin’s speech about that, but Vladimir Putin showed his intention to be in the process of discussing possible candidates.

“Mr Putin gave us a little bit of a hint about what his involvement is going to be. He said he will not nominate [possible successor], but he would be very much part of the process [of the discussion] and he wants the process to start. He has to wait for the election commission to declare the opening of the presidential campaign season, but he made it very clear that he might take a side and show his preferences. That will be a very important decision on the part of the President because it will very likely and most likely determine his successor,” stressed Mr Lavelle.

The RT commentator also mentioned President Putin’s opinion on the political parties’ development in Russia.

“I do not think Mr Putin said anything new about political parties’ development in Russia, but if we look at some of the President’s past statements about political parties’ development in Russia, he said that Russia needs two or three very strong parties to have a very strong democracy,” remarked the RT commentator.

Finally, Mr Lavelle stressed the importance of President Putin’s statement about Russia’s domestic energy policy.

“Russia’s domestic energy policy is a very important point. President Putin made it clear that by 2011-2015 Russian citizens and businesses will have to pay European prices. For the last two years it was price increase for the CIS members, and it is also very significant,” concluded Peter Lavelle.