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Thank you very much Mr Chairman, thank you very much ladies and
gentlemen. It's a great pleasure for me once again to speak to
you. First of all I want to say from which angle I am going to
speak: the Liberal party in Russia, the Yabloko party, is a party
which since 1993 has taken part three times in the elections.
We were the winners in the elections in 1993, again in 1995, and
then we also took part in the Presidential elections. About 10
million people voted for us in the Presidential elections and
the ideas which I want to express to you now are the ideas and
the feelings held by the people, by a lot of people in Russia.
During the Presidential elections, we had a chance to present
our ideas and the main slogan of the Presidential elections was
a very short word: "Freedom". That was the slogan of
our Presidential elections and people gave us a vote, a positive
vote in all 98,000 polling stations in Russia. There is not one
polling station in Russia which gave us zero. Somewhere we had
2 percent, sometimes we had 45 percent and even in one of the
largest cities of Russia like St Petersburg, we got through to
the second round. I was a candidate in the second round in St
Petersburg and also in 10 cities around Russia. Now from that
standpoint, I am going to speak to you and to express some thoughts
about what is going on in Russia and what the main problems are:
First of all, I want to say the presesentation made by Alexander
Rahr at the beginning of our seminar was very interesting regarding
the things that are going on in Russia, but I want to say that
generally speaking I disagree with the opinions expressed here.
The main question for me is why, why at the worst is such a vision
so wide spread as was presented in our seminar? This is why I
think it is extremely valuable that this position was so sophisticated
and so generously explained to us, it's maybe the main stimulating
motive for this discussion, which it certainly is for me. I would
start from the standpoint with this explanation for example: that
if all that we heard here is right about the reformers' government,
the government of the young reformers, the positive signs coming
from the side of the President, the new positive attitude to the
former Soviet Union Republics, the democratic processes in Russia,
the 3 years time limit for positive things to happen, then one
very small question: "What for example was the reason, or
what was the necessity of the NATO expansion?" And the answer
which in which is so well understood in our respective societies
is that the main reasons for NATO expansion were Russian internal
problems. We think that NATO expansion happened because we had
a war that lasted some 2 years, which killed a 100,000 people
in Russia; that NATO expansion happened because our military collapsed;
that NATO expansion happened because our economic reforms failed;
that NATO expansion happened because we have an unpredictable
government, an unpredictable President and so many criminals surrounding
the President. These are the main reasons why we think that the
western leaders took this dramatic decision. But the important
problem for us is that this was never openly discussed. The western
leaders always came to Russia saying "Mr Yeltsin, what are
you doing here?" Mr Yeltsin replies he is making reforms.
"What kind of reforms?" "Radical ones." "Oh,
congratulations, Mr Yeltsin." Kisses, embracing, shaking
hands and that's it. But when it comes to a serious problem like
security and NATO expansion, things changed because this is something
which touches the vital interests of the people. What it means
is that we feel, and we understand, that the majority of the western
leaders and the majority of the western political elite believe
that Russia is a second-hand democracy. This is a widespread feeling.
When the people think that Russia is a special sort of country,
an Euro-Asian country with many difficulties in its history, many
things of this nature, that the people there don't understand
democracy, they don't understand this or that, and so on and so
on, and so forth, - then all of these arguments give the west
the feeling that this is a kind of a country which quite simply
has to be kept in order. Because the progress towards creating
a real democracy in Russia seems to them to be extremely problematic.
That is why they do not say all these things openly, and also
why we in the west we always have such a picture of Russia. We
had this picture in 1992, 1993, 1994, and 1995. Sometimes, when
I am just reading the western press and listening to the western
experts, I have the feeling they are saying things which are absolutely
different from what is really going on in my country. This is
simply a different story about a different country.
Why is this so? First of all, because the general thinking in
the west is that, as we understand that democracy in Russia is
something different from democracy in western Europe, then it
cannot be the same as democracy as we have here. A second reason
is certainly to do with deep and wide-spreaded political investments
in Russia, in the Russian transformation process. A lot of western
leaders have stakes in Russian political success. They have political
stakes in Russian success, in Russian transformation. A lot of
talk, a lot of promises, a lot of speeches about Russian transformation
and that's why they prefer to use Russia as a positive example
of this process. And they try to take away any reservations or
criticisms about what is going on in Russia, for example. In this
is included a lot of societies and funds and many, many people
who are investing their political knowledge in what is going on
in Russia, and this creates a special sort of picture. I am not
just talking about financial investments, which are very active
in Russia right now - and that is the third reason why very often
we only get such a very special view of what is going on in Russia.
What is the result of such an approach? The negative result of
such an approach I would say, and here I want to refer to the
extremely interesting presentation by Mr Yakovlev, is the difficulties
involved in losing the credit or the trust - which the Russians
feel - towards what the west is saying about their country Russia.
In 1991, there was unlimited trust towards the western political
system, western culture and ideas. Now things have changed and
this change is because of the gap between what is going on in
the country and how it is presented from the viewpoint of the
western leaders. For example, there was a good question to Mr
Yakovlev as to what he would do if he were Mr Clinton. I am not
prepared right now to say everything that Mr Clinton should do
in his life - maybe his wife will tell him - but one thing about
my country which I am prepared to say is what we expect of Mr
Clinton when he comes to Russia and he should say this:
« Men and women, ladies and gentlemen, we understand what is
going on here. We Americans know what employment means, we Amercians
know what economic crisis means, we understand what extremely
high inflation means, we understand only too well what corruption
means, and criminality; we understand all these problems. We understand
all the problems with the old Soviet monopolies, with the oil,
gas barons and so on. We encounter those difficulties and it was
very hard and tough job for us too . And now we understand the
problems you are facing and we are with you. We are ready to help
you and we know what kind of advice we can give to you."
and so on. Such a speech would give to our people a feeling and
understanding of the American people, which would mean much more
than the general clapping of hands and saying what great, radical
reforms, congratulations! To a government which absolutely has
no confidence in the country. You would not be able to find one
single person on the street who could say he has confidence in
the government as a whole, in its policies, its future economic
success, or whatever.
When we were talking just now about such extremely important
topics as a pro-western government, which is what we have just
now, I would like to explain my view on this: I mean by this that
a pro-western government is a pro-Russian government, and that
life in Russia would be much better, and we would have more positive
results, if we were to take the western model as the basic model
for our economy. And by the way, that taking a western model as
a basic model for our political system, would also be the best
for the progress and the direction of the Russian people and the
Russian government. This would be the main sign. And major co-operation
with the west would mean that the people should have real confidence
in relations with the west and have a positive attitude to what
is going on in the west and co-operate in political and economic
areas. That is what I think are the main directions in establishing
the real, positive relations between Russia and the west.
Now, I am going to mention a few economic problems which we are
experiencing at the moment, in order to explain what problems
are faced by our government and what is the problem with the government
as a whole. To be precise, I would say that the main problem of
economic transformation in Russia is that as result of so many
different reasons, - including historical ones - the policies
of our government are resulting in economic reforms which are
creating in Russia an oligarchic, semi-criminal type of economic
system. Maybe some of them say, that is for instance sometimes
Anatolii Chubais says privately, that this is a kind of a southern
Asian model with its big corporations and big monopolistic groups
- which some people think would work in Russia. Sometimes to generalise
I say that this is a robber-capitalism system. If you were to
look at our economic system just now, you would see all the signs
and features of the robber-capitalism system. What are the main
characteristics of this system? First of all, I would like to
say that the starting point of this system, its roots, is the
economic system of the Soviet Union. This system has certainly
remained place as regards many, many basic things such as monopolies,
structures in industry and the overall structure of the Russian
economy.
What are the main directions which are called for by our Reformers'
government and cited as being the main advantages? Privatisation:
if we had privatisation, wide-spread voucher privatisation as
was brought about by Mr Chubais. Now to everyone who knows economics
at least just a little bit, then it must be clear: this was privatisation
and there was no bankruptcy. Can you imagine such a sort of privatisation?
It was just a change of titles. Privatisation took place with
out any change of management. The main plants with 200,000 workers,
100,000 workers, have the same management now as they had under
the Soviet system. No bankruptcy, no change of management - and
as a consequence, no investments. This is absolutely evident.
Secondly "advantage" number two: we limited inflation.
Well, this is true but please don't forget, millions of the people
were simply not paid. This was underlined in the previous speech:
not once for some one to two years were the people paid, not because
they are not paid because for their businesses - they have no
businesses. They are military and should be paid by the government.
This involves the police, the judiciary system, the medical system,
the security systems - but such ways to halt inflation, are no
big tricks. No money equals no inflation. No inflation equals
no population. So it is a direct way of saying no population,
no inflation - this is the formula, and it is easy. If 60 percent
of the enterprises are not paying taxes, you have no inflation
simply because they are not paying the workers. And the government
has a 70 trillion debt, about 12 billion, and the debt is simply:
the pensions and salaries. This is an extremely difficult situation.
It means we have unemployment which the government does not want
to recognise. I am in favour of keeping inflation very low but
in this case, it is necessary to openly say we have about 20 percent
unemployment - every fifth - and there is no one single programme
in the government to combat such a type of unemployment. Monopolies
like Gazprom company producing weapons, the monopolies on electricity,
railway companies and the such, still exist. This is the standing
point: the reason why I was saying that the communists and then
Zhirinovsky, let's take the communists first of all, why they
are at the present time the main friends of the government: quite
simply because for them the situation is apparent: until the monopolies,
the largest in the world, are all in place, the communists will
always have the opportunity to be in power because they can change
everything in the country using five or six officers - because
these things are the core system of the Russian economy.
The private property is another main question and here I once
again agree with what Mr Yakovlev says. I want to underline that
private property rights have not yet been implemented in Russia.
The voucher privatisation was in fact a collectivisation of Russian
industrial enterprises, not the private property question. Competition
is simply not part of the Russian economic system - but as you
know, the theory of market economy is that effective market economy
can only come from 2, and not one, from 2 basic starting points:
private property and competition. In Russia, there is no competition:
there is no competition in social life, there is no competition
in economic life, and the government and Yeltsin himself are trying
to abolish competition even in political life. This is the situation
we have. So, what we have as the current situation right now is
that the government collects just half of the taxes, and this
is why the budget collapsed. In April, the budget completely collapsed
for the simple reason that the government could not collect the
taxes - they can only collect 50 percent of the taxes. This is
the situation with our government and here I want to explain that
it is the same old policies as before. The only one new person
in government is Boris Nemtsov, but he has only been there for
three months. Basically it is the same government as before, with
the same policies which bring us to that old familiar situation
in general.
The other problem which I think is problem number one or two
maybe, I don't know which, is corruption. According to some German
experts who made a study about the level of corruption last year
in 1996, and drew up a list of corrupt economies and corrupt countries,
there are some 57 countries implicated. The less corrupt country
is number one, the most corrupt country is number 54. Number 54
is Nigeria, and in this study Russia is classed 47. Bolivia is
36, Columbia is 44. Russia is 47. Corruption is such a disease
that it changes all kinds of political or economic initiatives.
I think that corruption was one of the main reasons for the Chechen
war by the way. And there is no visible sign up until today that
we are really doing anything to fight corruption. The main advantage
of the new government is that they are at least talking about
fighting corruption. They are speaking about it now, whereas half
a year ago, they weren't even doing that. Now they are saying
such things - for example, Yeltsin said to our country that there
are 2 people who do not take bribes: himself and Mr Nemtsov. This
was his statement, and it was very amusing! But that is all that
has been spoken right now, the mere beginnings of talk about corruption,
but it is not a real fight against it.
Now, what does all this mean? It means that we are creating a
suppressive economic system. It is an economic system for a small
group of people who are barons in the energy sector and some other
sectors, which represent the clans and very strong five to seven
monopolistic groups. What are the results of this economic policy?
The results of this economic policy are that in 1996, there was
a decline in investments, by 18 percent. Decline in GDP, by 6
percent. Decline in industrial production, by 8 percent, and so
on. These are the results of such a policy. The other result of
this policy is the current collapse of the budget and the inability
of the government to collect taxes. The last point here is what
are the main worries? Certainly all of those people are very close
to me personally; they are my friends and we are very close. I
am very close to my friend himself but not maybe so close to Mr
Chubais - but what is the problem with this new government? From
my point of view - and I can prove it - the problem is that the
new government has no programme which would be effective in overcoming
these difficulties. That means that the crisis is a very serious
one, and here I want to use what Ludwig Erhard said about such
situations: he said that you cannot improve the economy, nor overcome
the crisis if you are faced with have two situations: firstly
if the government does not know what to do; and secondly if you
have a lot of criminals in the government. From my point of view,
this sums up 100 percent the situation we have in Russia at the
moment and is the main problem. There is a lot of talk about different
steps for the government should take and programmes to follow,
but they are not operating them.
Now I have come to the main issue of my presentation: this is
the problems of democracy, chances for democracy. First of all
as a starting point, I would like to say that robber-capitalism
is not equal to democracy. It is necessary to perceive the differences
between these two concepts: an open society, European values and
human rights are not the same as robber capitalism. They are two
quite different things. That is why it is so difficult to understand
in Russia right now who are the reformers and who are not reformers.
The Russian political system from this point of view is split
into two parts: the people who think that the kind of capitalism
they are creating is the same as the western model, that is an
open society or that they would create an open society sooner
or later; the other part of the democrats think that we have to
start to doing this right now, that we have no chance of creating
a real democratic country, and that we would go in the direction
of criminalisation, the direction of the oligarchical, monopolistic
state. First of all, I want to say that from our point of view
there is no opportunity to go backwards, there is no threat that
Russia will become a communist country again. I do not see any
scope whatsoever for that. Russia will never become the communist
country it was in previous times. This is impossible. With this
threat out of the way, we overcome one problem but face new ones,
which from my point of view are no less of a problem than communism
was. Certainly as a result of this economic situation, we have
a very strong nationalistic autocracy which has representatives
in the Russian political élite, among Russian politicians and
leaders, people which are always ready to be leaders of such nationalistic
movements and which can be very strong. Secondly, another threat
to our democracy is criminal dictatorship, the dictatorship of
the criminal elements. And the third threat is the attempt to
create some kind of Russian Pinochet. That's the person our young
reformers like very much as an example. They cannot even imagine
what Pinochet would mean in Russia, or what the differences are
between that event and the events we have in Russia. All these
three issues are a real threat to Russian democracy, but they
are not the threats to robber-capitalism which we have in the
country. That is why this situation in general is rather dangerous.
Now I want to use this opportunity to express that the main political
freedoms that Russian people have, which they were given during
the Gorbachev era with the firm help of Mr Yakovlev at that time.
Since 1991, we have changed a lot of things but there are no additional
political developments in this general direction. So the main
task for us is to make sure at least that we do not lose the freedoms
which we gained some six or seven years ago. That is the situation
which we are in. How do these threats to the system come about?
This can happen as a result of the criminialisation of our economy
and the failures in economic policy. We have an extremely autocratic
constitution in which the President has unlimited possibilities
and unlimited rights and this creates two situations: first of
all, it creates such situations as the Chechen war and secondly,
it creates extreme weakness of power - because having such great
responsabilities, the President cannot use them in the right way
and so different shadow people surrounding him take this power
and make considerable use of it. This creates the criminal environment.
The key issue is that we have no civil society as of present.
That is what I want to stress: we were making reforms all this
time in the economy, many things were done but I can safely say
that there were no real steps or moves made to create civil society
whatsoever. When I think about Russian reforms, I think that creating
a new life in Russia is a process of reforms and looks something
like a bicycle: economic reform, political reform. Economic changes,
civil society changes; and certainly what are the most important
elements for my country are the middle-classes, small businesses,
middle businesses, access to the resources and the property of
the dozens of millions of people - that is what is not happening
in going towards the creation of capitalism in Russia, and this
is very dangerous. This is why the government has no social base
and as long as they do not have this, they will always have to
make deals with the communists and nationalists - and they are
paying a lot to the communists and nationalists. So what you see
in Russia just now is an historical process: how the government,
in order to find some support in the parliament, has for instance
to literally pay the communists and nationalists to pass a vote.
And in this way, the government is developing such forces as will
finally stop any reforms if these parties were also to come to
power.
So what are the main directions? The main directions are certainly
the anti-criminal policies, changes in economic policies, liberal
changes in the tax system, regulations, competition, real property
rights - civil society issues which the government is absolutely
giving no attention to, nor are the President or the Prime Minister.
Division of power, federation, these are the main things that
must be addressed but are topic which are not on the agenda of
the current government, nor on the agenda of our President. What
are the consequences of all this? Here I want to say that it is
a well-known, even a banal idea that it stems from a Romanticism
of relations between Russia and the United States, and so on and
so forth. And I think that our vital interests coincide right
now, even more than before, much more even. I will try to prove
this now: Russia as a result of these issues makes threats which
from my point of view are no less than before, indeed are more
so - and hence more dangerous. First, as a result of the values
of economic reform and as a result of oligarchic government (not
a public but oligarchic one), which is extremely greedy, we are
losing control of many nuclear key issues. Maybe you are aware
of the suicide last autumn of the director of the Federal Thermal
Nuclear Centre of Russia. He wrote a note, which was later stolen
by the KGB, in which he said that he could no longer guarantee
security, that he had received no finance for three years. And
this is for a Centre which has been producing thermal nuclear
weapons since 1958 ! It is a special city which is not on the
map, 50,000 people work there and so on. He continued in the letter
that he had paid only 50 dollars to the people who were working
there in the last 6 months. He could not continue like this any
more. If you think something has changed there today, you are
mistaken. This is a real threat: if all this were to go out of
control, we would be treated to have a very, very nice entertainment,
and that means all of us. Secondly, last year from the arms depots
of the Russian military, 160,000 guns were stolen - can you imagine
that !? So I want to underline and stress that these are the pre-conditions
for international terrorism - not just military threats, but also
for international terrorism. Thirdly, concerning ecological problems,
when we read in our newspapers that the staff at the St Petersburg's
nuclear power-station have not been paid for 6 months and have
gone on strike, then I think about all these people suffering
from starvation who are regulating the nuclear power-stations
and this gives me a very bad feeling. And this is what actually
happened just several months ago ! These three things are much
more important than the possible military threat that NATO expansion
may mean. What is needed is a new kind of co-operation, and new
forms of mutual understanding because what is going on just now
in Russia, from this point of view, creates interests which I
personally think are closer to Europe than even before. That is
why I think such co-operation is so important - these issues must
be given priority.
Now, I want to say a few words about the Council of Europe: as
far as I understand it the main values of the Council of Europe,
where I am privileged to be making this presentation, are pluralistic
democracy, rule of law and human rights. I would like to say that
these are not yet the basic values for Russia. That is why I had
so many reservations when Russia became a member - I want my country
to be a member, I want this very much, but I want Russia to be
an equal member. Not simply equal on a formal basis, but equal
from the point of view that in my country, these values should
really be the basic starting-points for internal policy in Russia.
And this is not the case, nor are such discussions even beginning
yet. I think that the Council of Europe cannot remain uninvolved
in so far as Russia is a member. This is not simply an internal
affair for Russia. It is not just an issue that Russia is not
meeting the main conditions of adhesion to the Council of Europe
- you are aware of the many conditions that Russia has to meet
- but it is also an explanation of the attitude of the Russian
people, and I mean all the country, to the Council of Europe -
to Europe - an attitude which is still held in high esteem. And
respect is very high and so every word which reaches the people
in Russia is respected. This is why every step made here towards
Russia is important for Russians. I do not believe - because I
simply know by my own political experience: I am campaigning all
over the country; every month, two or three times I go around
the country and am able to speak to the people everywhere in the
country - I know that respect is very high and that interest is
very keen. That is why if every decision which is taken concerning
Russia were to reach the Russian people, which is not always the
case, then this would be treated with high respect. That is why
I am discussing here everything including the Belorussian issue,
the issue of which direction Russia should go in - for example,
you have the chance to elect the vice-chairman from Russia and
I think you would have two different figures put forward for that:
one of them would be Mr Kovalev and the other person would be
maybe Mr Dzasokhov, who was presented by Mr Zhirinovsky, who was
one of the driving forces behind the political integration with
Belorussia. So, a lot depends upon your decision because that
reflects, has a reaction, on the people.
And finally, the answer to the question "what does Russia
need?" Always when I am making a speech abroad, I am asked
how the west can help? What can be done? My answer is that Russia
needs honest, open, moral, political and intellectual support
for Russian reforms. We do not need money, we have enough already,
I am afraid to say more than even you. Because you have our money
in the Swiss banks - 22 billion dollars leaked from the country
last year - 22 billion abroad. We don't need money. We need open
and honest, moral and political and intellectual support. You
must never give us advice which you would not accept for yourselves.
Do not treat us as a second-hand democracy. We want to have the
criteria you have in your own countries: that would be the best
thing for us. Never suggest we elect a President who you would
not elect for yourselves - I am sorry but that is what you are
doing. For example, when such a strange person as Mr Lebed appears
on the scene and so on and so on Š I was in Germany for example
when there was a big noise about Mr Lebed and I was questioned
by many people - I have good relations with Mr Lebed, but I asked
the people: "Are you ready to elect Mr Lebed as your chancellor?"
They said no ! So I said why are you asking us to elect him as
our President? Never give us advice which you would not accept
for yourselves because we have a different history, but we are
one civilisation. The next century should be the century of civilisations
and not of single countries. Thank you very much.
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