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Big Winner President Vladimir Putin

December 8, 2003 at 12:00 AM EDT
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MARGARET WARNER: For more on the elections and what they portend for Russia’s future we turn to Toby Gati, a former assistant secretary of state and an NSC (National Security Council) official in the Clinton administration. She now advises Russian and American business clients at a Washington law firm. And Anna Vassilieva, head of the Russian Studies Program at the Monterey Institute of International Studies. She is a Russian native and an American citizen. Welcome to you both.

Toby Gati, what do these results tell you about the state of democracy in Russia today?

TOBY GATI: The results of these elections really are the culmination of several trends that we’ve seen in Russia; the suppression of a free press, the pressure on civic society, the use of government apparatus and of the apparatus of the police to keep opposition in check. And what we’ve seen is a system where the parties that are favored by the government do well and those that aren’t don’t do very well.

And I think what it means is that we are now relying on the fate of Russia on one man, on Putin. If Putin takes Russia towards full authoritarianism, it’ll go that way. If Putin becomes the defender of a semi-authoritarian state, well, it’ll be that way.

In any case, it is not the Russia certainly that I expected and many expected, and it’s not a Russia based on the rule of law.

MARGARET WARNER: Anna Vassilieva, why do you think the people of Russia so emphatically endorsed this party, United Russia, which didn’t have much of a platform other than to wrap itself around Putin?

ANNA VASSILIEVA: Well, I believe that Russian citizens endorsed the party United Russia precisely because the party United Russia supports President Putin. And with the highest level of popularity that President Putin enjoys in Russia, people, citizens of the country just wanted a force, political force in the country that would fulfill the wishes of the president who is so popular.

MARGARET WARNER: But I mean what does he represent to them?

ANNA VASSILIEVA: President Putin, I believe, represents self-confidence and some faith in the possibility of restoring stability in the country. And I know that stability is not the word that is popular in the present-day discourse when we analyze Russian politics.

But it’s extremely important to remember that we had 2,600 percent inflation in the year 1992 after the reforms, liberal reforms were started by Yeltsin’s government. We had the war in Chechnya, and we had another financial collapse in 1998. And all those revolutions affected the quality of life of Russian people so that right now, Russia represents a society with about 40 million people who live below the poverty line and about 30 million people who live just a little bit above the poverty line.

And definitely those people want anything but more radical economic reforms. They want the society of order and stability. And President Putin seems to be offering that to them, at least in words.

MARGARET WARNER: So Toby Gati, you said this is a real open question. Where do you think Putin is going to take this mandate?

TOBY GATI: Well, it’s not only an open question, it’s a very important question. Putin was one of the first to recognize that Russia really had to turn towards the West to modernize. I think he shocked Russian society when he said conditions were so bad that it would take 20 years to reach the level of Portugal and its standard of living.

And I think he does understand that openness towards the West is important. And many people in the West have been saying that Russia’s path towards, if not greatness, at least normalcy, was to continue in openness. And of course it’s our hope that Putin will continue to do that.

But the real question for Russia is: Who is Vladimir Putin? And if we read the programs of some of the parties that are supported by him, of course there is no reason to believe that that openness can be continued.

However, even business is going to be concerned, and if investment doesn’t come in, I think Putin understands that this is not going to be the kind of Russia he wants to build. And that’s going to be a constraint on how many controls you can put on currency, how much redistribution of property, the kinds of things that are being called for by the one party that gives me the most concern, and that’s the Motherland Party of Dmitri Rogozin and Sergei Glazyev, who have really called for a return to the old policies.

MARGARET WARNER: This was another new party formed to try to peel off support — a very ultranationalist party.

MARGARET WARNER: Anna Vassilieva, if were you a businessman in Russia or if you were investing in Russia, what message would these results in the last few months send to you? How do you think the Western business community will look on this?

ANNA VASSILIEVA: Well, it depends on what kind of a businesswoman I would be. It was made very clearly by Motherland party and by Zhirinovsky’s party is that their idea of reforms is to support in all possible ways the small business in Russia, to give a partial control to the middle sized business in Russia and to make sure that Russian government controls fully five most important strategic resources of Russia, which are oil, gas, electricity, railways and military industrial complex.

So, if I were a foreign businesswoman who would like to invest, I would make sure that, first of all, legislation, the current legislation in Russia takes into consideration the risks that I will have to take as a foreign investor who doesn’t really know Russian business culture.

If I’m a businesswoman in Russia, I would make sure that I pay all the taxes that I am obliged to pay by law, that I am socially oriented, that I make sure that my profits partially go to the people of Russia, rather than are taken away from the people of Russia and deposited in foreign accounts. And I would make sure that I can always have an open dialogue with the government because what we see in Russia now is a tendency for a more authoritarian style of politics and for any businessman, this is something very important to consider.

MARGARET WARNER: How do you see this point, Toby Gabi, for instance, do you think that some of these big industries are going to be re-nationalized?

TOBY GATI: No, I don’t think there’ll be a re-nationalization of industry, and I don’t even think that a lot of the private property will be touched.

But private property will not be private property for the use of the owner of the private property. It’s going to be private property in the interests of the state. So for example, you want to make a major investment, you have to make sure that the government believes that that’s the kind of investment that should be made.

Business likes stability. Business has been happy with the results of what President Putin has done. The growth rate in Russia has been over 6 percent. A lot of positive things, and I think President Putin will be aware that the initial analysis, for example, of some of the companies in Moscow is kind of concerned about where this is going and what it’s going to mean for their investments.

MARGARET WARNER: What is the U.S. stake now in which direction Putin goes? And does President Bush or the Bush administration have really any influence on it?

TOBY GATI: Well, we have an enormous stake in what kind of Russia emerges — a strong Russia, yes, but a strong Russia for what? And I really think it’s about time for this administration to get a Russia policy, rather than a personal policy towards Russia — to understand that, yes, one man matters, but what really matters are institutions.

And I’m pleased to see the White House, for example, agree with the Organization for Security and Cooperation in Europe (OSCE), that there were problems with the election. But we have to remember this is an administration that for three years has not said very much about internal developments and has been mainly concerned with Russia’s support of terrorism, which has been good and support of the policy for Iraq, which has been good sometimes, others not.

And I think Russia, along with other countries, like Azerbaijan and Uzbekistan, have gotten the message that this is a one-theme administration. If you follow us in foreign policy, then we don’t really care what you do inside Russia. I have always thought that what happened in Russia matters very much.

When the Soviet Union was our enemy, it wasn’t our enemy because it had nuclear weapons; it was our enemy because its internal system was inconsistent and opposed to our own. So what happens in Russia really does matter. And if somebody wants to do President Bush a favor, he should read him Glazyev’s “Economic Policy, a Redistribution of Resources” and ask him to get a good night’s sleep.

MARGARET WARNER: Anna Vassilieva, your view on this, on the U.S. stake, and what has the Bush administration received from here?

ANNA VASSILIEVA: I believe that the administration of the current president of the United States should take into consideration the reality on the ground in Russia. And understand that Russia has been through a major transition during the last 10, 12 years that Russian democracy is very young and very fragile. And this is, again, the confirmation of it is something that this election shows to us. How many years did it take the United States to build democracy we’re all enjoying now?

Russians have been through tremendous revolutions. Russians are being challenged in all aspects of their everyday life. And if the administration of President Bush is putting too much pressure on Vladimir Putin, I don’t know if that would cause positive results because President Putin has to deal with enormously difficult task of helping their people rise from their knees. And this is what one of the people who was interviewed by your correspondent said earlier in this program. He wants … the people want to rise from their knees. This is where they were thrown by the reforms — no matter what kind of reforms, what names we are attaching to the reforms.

So, it’s extremely important to be tactful about fragility of Russia and to do everything this administration can do to help stabilize Russia, help its economy, because ‘demos’ is based on economy, civil society is based on demos and democracy cannot exist without economy, civil society and demos.

MARGARET WARNER: And by demos you mean the body politic?

ANNA VASSILIEVA: By demos, I mean the civil society, the people who don’t need to worry about what they’re going to feed their children with or where are they going to find the money to buy just basic things, shoes, coats, and this is what Russian citizens are concerned by now.

MARGARET WARNER: Thank you, Anna Vassilieva and Toby Gati. We have to leave it there. Thank you both.