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World Economic Forum, 01.02.2002

Russia Outlook: Will Russia Seize the Opportunity?

Annual Meeting 2002

Russia's Willingness to Work with the West Is a Key Factor in Restoring Investor Confidence

Russian support for the United States' campaign against terrorism has created new windows of opportunity for cooperation in other areas, especially investment. But discussion leaders at a dinner to discuss Russia's future made it clear that a deeper understanding of Russia's present political climate is expected from Washington if the current openness is to continue. While the US is pushing for increased democratization and less restrictions on business, Russians are more concerned about the danger of social chaos and a loss of political control. These days they are also concerned about the lack of predictability of the Bush administration. "We need stability," German Gref, Russiaaˆ™s Minister of Economic Development and Trade, told guests at the dinner. "We need political stability and economic stability. I don't think that anyone would deny that, with the accession of Mr Putin to the presidency, that stability is now in place." Gref was sceptical about western complaints that Putin has stifled television and other media. "At a time when 90% of the mass media in Russia belonged to two people who determined the whole content, that was considered to be democracy," he said. "When it turned out that these media outlets were, in fact, based on and funded by money derived from privatization, and that this was not lawful, it turned out that it was not so democratic." Gref admitted that Russia still faces enormous problems, but he insisted that Russia's political nature has changed dramatically. "It is absolutely obvious that today there is a completely new thinking in Russia," he said, "and the name of that new thinking is predictability and pragmatism. We should base our relations with the United States on predictability, pragmatism and the pursuit of mutual interest. All we ask from the US is a similar predictability and understanding of our situation."

Grigory A. Yavlinsky, Member of the Russian Duma and Leader of the Yabloko Movement, expressed some pessimism about Russia's short-term economic prospects. "We think that growth cannot be expected in the first quarter of 2002," Yavlinsky said. "To generalize on this point, we think that without deep changes, without new products and new technologies, all the other resources to accelerate economic growth are almost completely exhausted. Further growth would require new investments and radical changes in the quality of management." Yavlinsky turned out to be highly laudatory of Putin when it comes to foreign policy, though. "Russia made an absolute incomparable breakthrough in 2001," he said. "It was the personal courage of the Russian president to take the decision of unconditional support for the United States and its stand against terrorism. It was the personal courage of the president that resulted in that decision." The United States, Yavlinsky pointed out, has been less helpful in its treatment of Russia. "The statements about the ABM treaty, the declarations that treaties were not necessary anymore, that warheads would not be destroyed but would be stored, one by one, every week; something has happened in which Russia has given a very quiet, very wise response," he said. "The president is giving a very clear signal to his partners that the relative success of the United States in Afghanistan is only the end of the beginning, and it is a very long story -- It is better, instead of discussing these minor things which create new problems, to start negotiating strategic military and political alliances for the 21st century that will have a dramatic impact on the internal political situation in Russia as well."

Mikhail Margelov, Chairman, Committee for Foreign Affairs, Federation Council, Russian Federation, indicated that Russians would very likely find a US attack against Iraq completely unacceptable. "Russia will never accept that the Iraqi debt is not paid back to Russia," explained Margelov. "We will never accept that Saddam Hussein's regime becomes a fundamentalist regime. We will never accept that the tool to get rid of Saddam Hussein will involve inspiring conflict between the Kurds and the Arabs. Speaking about Iraq, we are very pragmatic." Amplifying on his reference to Iraq's debt, Margelov said that the question is a hot political issue in Russia. "The Soviets' debt was not forgiven to Russia," Margelov explained, despite Russia's advances to the West. In contrast, the debt incurred by Poland's former communist government was erased from the books. "It is a very important topic that we have to keep in mind."

 

See also:

Situation Around Iraq

World Economic Forum, 01.02.2002

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