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I am Jim Collins I run the Russian and Eurasian Program here at Carnegie, it's my duties today simply to welcome all of you, this is - I would say almost a family gathering in many ways I think there are very few people in this room who don't know each other and certainly we all are quite well acquainted with the author of the book we are going to be talking about today. what I would like to do is first of all say that Lilia will be signing books at the rear in the room where you picked up some thing to eat after the program and so if you didn't get a chance to have her put a pen in your book before the event, I hope you will do so afterward. For those who where wise and wise enough not to have purchase the book already, you can also do that. But the point of today's exercise really is to to introduce this book. We at Carnegie are very proud of it and I am also veryvery pleased that Bob Kaiser whom I believe is well known to almost all in the room has agreed to come and talk with Lilia Shevtsova about it and then gradually move from his conversation to engage those of you who are sitting at the tables. Bob has a long standing highs with Russia going back to the the 70's, he has written two books. He is presently the deputy managing editor at the Washington Post and I think he is known really to pretty much every one here in Washington, so I am not going to spent more time in inflating his ego. So Robert I turn the floor over to you and I look forward to your conversation. Thank you. I am happily not the deputy managing editor or the managing editor any longer I am the associated editor which means nothing which I enjoy a good deal. This is fun, this is a wonderful book I I really hope every one will buy it and more important read it and it's blessed with a absolute fabulous title I think and I am going to talk a quick anecdote of this dinner that Jim gave the other night for the all the former Russian ambassadors in both directions. I sat next to ambassador O'Huiginn, my old pal who has done the ombudsman of the Russian republic and I said - I said how was it then he said well, in Russia we were speaking - he said well it's a transition period and I will tell you the problem he said "it is a transition period between two transition periods" - that's it so given given that absolutely correct description of the intellectual challenge of catching the moment, I think we gave to give really a very high marks indeed for what's his accomplishment - accomplished - now we we got a few ideas for things to talk about that we have discussed in advance but this is really it should be an open discussion. The absence of a podium here should be taken seriously, so if any body wants to jump in at any time it is invited to do so. I wanted - really I will tell that - the author's good luck that just as she is bringing out this book that is been really interesting and is significant news about what's going on in Russia particularly because she noted to me in e- mail earlier this week Putin is - writing about Putin, I am writing about Putin is like a super power, now we know Putin isn't leaving isn't it isn't this a little bit of a problem? So why why don't we start with that? What given us your view of this latest turn of events and and just justify your decision to try to write about legacies at this early moment. Oh, well Bob, could I ask few for a favor? Of course. Just one thank you minute. Okay.You know books of course are important but it seems to me well, I remember about - I remember the old saying "The process is everything, gold is nothing". For me the process was a real fun and I believe that such meetings, first of all the occasion to express gratitude, to express gratitude to the people who are some times directly, some times indirectly help the project and so I have a number of people and I am asking for your patience. First of all Jessica, I would like to express my gratitude to you because I have got unwavering support from you on all stages of this sequel sequel process and I promise no more Russian political leaders I would switch to something else. My deepest gratitude would go to - I don't see him but Paul Baron and of course Mark Medish, Jim Collins and and by the way Tom Carruthers who contributed to the cover unconsciously he doesn't know yet about that and Jorge ____ for advise, for encouragement, for your graciousness and there are my friends here Angeles Tent, some of them are absent Arnold Torlick, Andy ____ David Kremer who were the first to read the manuscript and criticized me severely. Thank you for your tough and candid reaction. Besides there are three guys three men three person whom I am especially indebted. One of them said that everything you wrote about Elson is right, everything you wrote about Putin is not correct. The second has been written in all my manuscript and given very candid very gracious advice. Even without without agreeing with me. The third read the manuscript during during his trouble to Kosovo trying to make peace and [0:06:31] ____ So the three men are Gorbachev, Stuart Albert and Carl Bildt and there are other my friends who also contributed to my understanding not only of Russia but understanding of how the outside world views Russia and I I quoted them very broadly Steve Sestanovich, Bolero Ruble, Leon Aaron, Rose Gitomer, Dimitri Trenin, Eugene Ruma, Bob Nudick and they are not all the guys, some are the guys whom I mentioned in the book and of course Peter Peter Welch, you are now responsible responsible for the book. If book is alive, well all thanks if book is really dead, yeah you will be guilty, Peter Reed with his team who is doing promoting of all our products at Carnegie and my deepest gratitude, I am really indebted to that terrific publication team, ____ and you know these are very courageous people because they jumped into the water not knowing what they are dealing with and I am grateful for your professionalism. Tina Long as well and of course [0:07:49] ____ Maria Barnet, all these people at Carnegie in Washington and Carnegie in Moscow that have created a very good friendly atmosphere for for such type of research so I am very indebted to you folks and of course I am grateful also to another category of people to my opponents who helped me to finesse my arguments and I hope my arguments will be persuasive. So this is the pleasant moment and now. Okay oh it is more than one minute. Sorry well I will cut on the explanation of Mr. Putin which is apparently is less important. Why now? Why the book on legacy? You know frankly speaking about I should have written this book two years ago in 2005 because if one of you look at Russia in 2005 at least by the end of the year, everything goes clear. All major trends, [0:08:44] ____ and at some point paradoxically enough Mr. President became already the hostage of the system that he created, he could not do anything at all. He could have put some brush strokes here and there but he couldn't change the landscape anymore. So my book a little bit is out of date, I missed two years. So we could have discussed Putin's legacy in 2005 just like we could discuss, he has a legacy in 1996. Luckily no one else did it those years you are still first. Oh well there are - some people did it well with some success. So let's let's talk about the last weeks events what last two weeks what do you, how do you interpret - what he decided and what he announced and what did how should we understand what to look for next? Well it's difficult to discuss the motives because in this case we have to become shrinks but definitely if you look at the results, we see the logic and we can come to conclusion that president Putin is one of the smartest political animal who understand perfectly the logistics, the schedule, the timing and the logic of the system and he understands that he has to do everything possible and not - and even impossible in order to postpone his lame back status, so this is first of all all this [0:10:10] ____ movements, all these cards out of the sleeve. This is every thing about controlling the situation, but not necessarily about President himself for ever this is not yet Putin for ever not yet not yet Do you expect that that where we are going to get to that stage? Putin for ever? We may, but at the same time irrespectively of what the President, of what political groups and clans around of the crumbling of the crumbling wish, there is logic of the system and the logic is it can express itself at least in two things, firstly the system can survive only if it changes the cloddish, if it changes the leaders on the top and the regime and secondly each other political regime has to follow the all dialectical rule remember [0:11:11] ____ rejection of rejection so the new regime can legitimize itself by brushing aside or brushing away or just throwing back or digging the grave for the predecessor. It could be done in a nice way like Putin did to Elson or in a much harsher way, like Stalin did to all his pals. So these are the period of a rather soft brushing aside. That's superb - so I think that the people in this room may be the gloomiest part of this book, is that really the main theme of the book which is I think a very pessimistic and - but very persuasive description of the utter failure of the great liberal project thus you call it. That that many of us were involved in vicariously some of us like Jim were involved intimately and directly and it's your argument here that it's just been a total failure. Explain that in the context that we were talking about what Putin does next - is it is it not just a failure but is to be totally abandoned or these are the basic capitalist reforms that remain in place or are they already being so undermined by the growth of the state sector and the economy that there really isnt capitalism anymore, in any recognizable way? Well, you force me to answer the question in a very crude way, were I hope about about the failure on the failure. Well there was nothing unique about the failures, we know a lot of nations that had that have failed and we remember Germany that failed consistently and stubbornly during the 19th century at least until 1945, Do you remember France before the [0:13:09] ____ that could be called a defined failure. And I remember terrific peace by this big Russians came the American interest when he uses the term coined by [0:13:20] ____ suicidal state craft when he is discussing the only super power. So in fact the phenomenon of failure is not unique what is unique about Russian failure? There are some thing really very specific and very dramatic, Russia has failed twice, during one generation. In 1989, the collapse of the Soviet union that meant the end the failure of the myth and hope to create and to offer the world and alternative civilization and Russia has failed with in fact building the liberal democracy and what is weird, peculiar and strange about that Russians have become - at least majority of them have become persuaded that this is not a failure but a success story but there is at least - there is now there are two things that give two [0:14:12] ____ or two optimistic things that give a glimpse of hope responding to your questions either any hope. One, Glimpse of hope for the first time Russian society is much more ready for a break through, to live in a more realistic situation than their allied so there are no insurmountable barriers on the way of Russians becoming you know much more free and behaving like you folks in the Western society. What's the evidence of that? The evidence of that even the fact paradoxically they voted twice for President Putin and still support him, they support him not on the present who is in - introducing a back rolling, but they support Putin as a possibility as a possible leader who would do the reform and sixty percent still anticipate that he will do the reform - Really? - and Russians never voted for Mr. Reinovsky, for mister, well for other misters ____ they voted for Yeltsin and Putin and they considered them as leaders who would combine order and reform and there is the second thing which also can give us in the future some hope. A Russian elite does not want to go back so Russian elite has stuck going back, it has not incentive and courage and gut feeling to go - to move forward, so Russian got stuck, but it still can move and by the way this cover, it seems to me reflects in a terrific way Russia got stuck you know the head - the head of a very famous monument - soviet monument to the worker and the peasant. This monument was the symbol of the Soviet Union, they stood people - you know in their stretching hands like carrying their heckle and their sickle and in 1981 the monument was dismantled you know decapitated and only recently there was a decision to renovate the monument and put it back. The major problem is that after renovation their heads do not stick to their bodies, so - and it seems to me so this head looking looking for their body you know is is a perfect reflection of Russia Lost in Transition and especially on the great cover this is the idea of by the way Tom [0:16:45.8] ____ who was writing about some countries in the grey zone and if you make, if you really do a reprint we can change the cover or color into the red color or into the orange depending on the developments. Now you just did it again and throughout this book you referred to something called "The Russian Elite" and I want you to defend the proposition if there is one Russian elite, it seems to me that you can argue that there are numerous overlapping elites but they don't do all share the interests over the same Petersburg KGB gang that's in charge now. We defend that proposition of one elite. Well by the way I want to agree I want to agree with your suspicion that there are something else than only one group, first of all on the elite. Well it's like oxymoron we can't call these people elite but well we call them establishment, political class, business class. But let's stick to elite quote and quote. Yes you are right. There is more than siloviki and by the way I want to - I want to show everyone, all Russia hands present here just [0:17:54] ____ the letter of the leader of what way knows because these people know beforehand. One of the head or one of the special services Mr. ____ leader of one of the Siloviki gang I mean power structure, he demonstrates that there are severe begrime scowling on to the carpet are now on the carpet of all these poll ministries and there are more than poll ministries, that's too pragmatists, that's too regionally, they are still liberal technocrat and we never touched on the issue of liberal technocrats about and their responsibility for what happened to Russia. We all was blamed - the communist communist are out of the picture, we always blame Mr. Putin and the Siloviki and Mr. Putin did a terrific thing to the system, he prevented KGB. The real KGB coming to power, he has create a situation when all these spiders are begriming and you know - and fighting each other understand and that if one institutions takes over, there is nothing else. All the grass will be ruined, so yes true there are lot of clans fighting power while there is one thing about all them unfortunate for us, for the society and for liberals. They all have agreed that they fear a petition of any term, well they don't want any change. So there is a consensus between them on the major thing. The concept, the consensus on status quo we don't want changes, we want changes you know grabbing property but nothing surface, so this is a kind of the status quo elite and begrime behind. Elaborate on your point about the liberals and their and their guilty or - this is you are talking about - Responsibility About Chubais and those people right, would you explain who do you have in mind? Well talking about liberals in the book, I am talking about liberals dash technocrats especially a group of people that was called to power in the 1991 and composed the first Russian government and decided that Russia is not ready for independent institutions and they should persuade Yeltsin to you know to create before privatization, to create a system of rule of law. They decided that they should have better rely on one personality, this is safe - this is safest way to democracy and liberalism. In the end we have got all they got is capitalism or words in adequate Yeltsin in 1995 not knowing what he is doing in the Kremlin and the regime that has - that has been forced to call, they got dogs, the wolves the petulance to stabilize it so what we see in Russia is not the master piece of Vladimir Vladimirovich Putin, simply they simply somehow brought equilibrium to the system, this system has been formed with a very active participation of liberal technocrats and you have named several names Chubais, Gaidar and apparently we have to wait for our for our coplanar apocalypses. We have to wait until this guys will understand our responsibility for the history. I am I am personally intrigued by the the role of the past in the present. It seem to me for a long time that one of the great tragedies of the current scene in Russia is the fact that nobody has made any effort besides Mr. [0:21:31] _____ say to come to terms with the past and to face up to its implications particularly in the sense of the South African truth commission or other attempts by by damaged societies to look at their own damage and what caused it or where did it come from, which is often seem to be a necessary first step toward recovery of a healthy society. Give give us your assessment of this problem now in Russia. What is the significance of the fact that Lenin is still in red square. [0:22:08] _____ he is back on his feet and may be back in the in the square before too long that the past is still romanticized by Putin publicly, that no body has faced up to the horrors of the of the Stalinist state, what - how should we understand the significance of this in terms of trying to get beyond it in the future? Bob I would agree with your - in fact with your assessment that you put in to the question. Last week 30 percent of Russian correspondence said that October revolution was a positive event, two weeks ago according to the polls 23 percent of Russian correspondence said that they respect Stalin and only eight of them respected Gorbachev and only four of them respected Yeltsin. True 45 of them respected Vladimir Vladimirovich Putin. Without sorting out things, with out burying our ghosts, we cannot become the normal country. that's absolute evident but at the same time we can raise the question of why we cannot do that, why Russians failed to bury their ghosts or first to dig the graves out and to to sort out with their past like Polish did, like Czechs did or doing and Charles did Hungarian do that or not. Well there are some nations who are still thinking apparently well there are at least two explanations, one explanation is you need to feel to have the sense of defeat in order to bury the past. Russians do not feel that the collapse of the Soviet Union was the defeat of the communist and secondly - and secondly there is fear even among the democratically thinking part of the population, there is fear that if you start open the graves and start to look for responsibility and responsible, you will under mine the state again and the whole of this very tiny tiny tine of federal fabric starts to unravel and there is a really - and there are some you know some some at least justification for that fear but at the same time history is not is not a destiny and it seems to be Ukrainians with some mistakes but approve that history, mentality, couture and the grave yard is not the total destiny but there is one thing that deaf us - that makes us different from Ukrainians although we genetically, politically from political point genetically are the same. Ukrainian nations has two assets, firstly Ukrainian nationalism that pushes the nation towards Europe and secondly they are not a super power, they don't aspire a super power. Russian nationalism is being - And that oil - do you think that is also important - Yes. But these two things are even more important than oil. Russian nationalism brings us, pushes us in the opposite direction and even Russian liberals do not know whether Russia can exist and this is the very sure thing, I have no answer to the question whether Russia could exist as a normal state not being a super power in the current geographical format and for me this is a question mark I do not know. So this explains why we don't have coplanar apocalypses now. Do you - you referred that problem in the book that this question of whether the Russia can exist in the current geographical arrangement. Elaborate a little bit about what you have in mind that is too much of an empire still, is that what you are saying that there is too many non-Russian peoples that are part of it or what? Well, you know there is a kind of apparently [0:25:54] _____ that Russia has build already, a new modern nation state. I have doubts especially looking at the northern caucuses Chechnya, Ingushetia and the rest. I do believe that Russia is still lost in this transition trying to become a modern nation state and failing and Russia still has this you know super power syndromes and the whole situation in their northern caucuses explains it and well that's a problem not only because Russia has been frozen on its way to get rid of the super power and it's much more difficult process than for instant for great Britain and France because this is the territorial territorially integrated super power and there is another factor. Lets imagine that current democrat - demographic trend will continue, we lost we lost 12 in 1981 we had 149 million people, today we have 142 million people and if the current trend persists in 70 years time it would be really difficult for us to keep far eastern Siberia do simply to demographic trend not only to the left all of us of the super power. But then in this case it will be easy for Russia to be a normal country that will end on Europe. There is lot about the role of the west and the failure of the west in the book. After this 15 years 16 years, what what is the Russian the smart thoughtful Russian attitude toward the role of the west today than in the immediate future? Well, there are different fraction perceptions of the west and I am not sure that my perception is the correct one. Well, I do believe that the west cannot be a key factor influence in Russian developments, it's not a decisive factor. It has never been apparently but the west still can create more benevolent environment, international environment for Russia's transformation which the west has failed to do and I already at one of the conferences organized by one of the Russia hands Leon Aaron tried to raise the question about the fact that Russians have been extremely successful, adapt and smart creating seduction for the west and creating different platforms and instruments of cooptation in the west. But unfortunately well this thesis has not been supported. I will only perhaps ask the audience to pay attention to two moments, read the memoirs of [0:28:49] _____ and see how president Putin and the regime have been successful in co-opting the west and look at what the president of the shell company said just recently and the economic economic - St. Peter's Berge economic forum thanking president Putin for solution of the shell problem in Sakhalin. Well and quite recently by the way talking about the west and perceptions by the way Bob, there is a great book written not by myself, written by [0:29:27] _____ who has a strange reputation sometimes and in these country but he wrote a terrific book which is called 'The Age of Fallibility' proven that perceptions, misperceptions, stereotypes and fallacies have become the causal affecting history. So it seems to me perception do matter and so quite recently the day before yesterday this era you will know when the the current session - the last session recent session of the Russian and American US-Russian business council takes place in Moscow, it seems to be next week, so I got I got the agenda of the US-Russian business council, they never believed me. Russia's success beyond these stereotypes, so it's again our you know our unending effort to built fallacies, misperceptions, stereotypes which in fact is very is a very popular thing not only in Russia but in the west as well, and one of the purposes of the book is to - to at least urge to urge not all not all Russia hands because at least Russia hands that I know, they have quite objective perception of what's happening. But to urge Western business Western politician to make an effort - to understand what's happening, and understand Russia's challenges, domestic international challenges, because without that Western policy would continue to be the disaster with big capital deal. Isn't that success that - you just referred to all that related to money and that Russians are buying off Westerners again, has this happened repeatedly through history? It's not about money, it's about naivetÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â©, it's about ungrounded hopes, it's about laziness, it's about reluctance to admit mistakes and it's about very complicated objective things, it's very difficult with the outside world about and understand the difficulty to react to the country that has chosen to sit on two chairs and resembles the skier with his skis pointing on opposite direction, so Russia wants to be part of the West and to be against the West, Russia wants to be a part of the G-8, part of the council of Europe, part of the Parliamentary assembly and at the same time Russia consolidates itself on the basis of the anti American propaganda, so how to react to these? You can't you can't aggress, you can't simply go ahead, you know a sink in this [0:32:06] _____ so let's do the common interest because this is a coessence but you cannot inflate this either and you cannot you cannot fight Russia, you cannot isolate Russia, what should you do with Russia? It demands not only - not only one Kissinger to form a new common strategy towards Russia. We don't really make it I would let that and would go by. Sorry. Well I referred to a wrong person, okay. Well, just like the record that - worked out I mean in any way one of the big changes that has occurred in the era that you are writing about and then if you had visited Moscow or Peters Berge you know sees it is that we have some thing in Russia that we never had before that looks a lot like a middle class, talk about that and about the role of these newly economically empowered Russians in the political picture and the process in the future, what does that middle class mean? Very briefly that is folks again returning to perception. Majority of my friends in Moscow will tell you that the growth of middle class and Russia's economic growth, this is how I guarantee of our movement to liberal democracy. I am asking them that very simple question, if economic growth means more democracy why we are crawling back? middle class, okay, if middle class why Russian middle class and there are very serious service and all those been done among the middle class, Russian middle class in fact is fusty for the state of school, against - secondly for Russia great super power, thirdly against any kind of these Western tricks, so middle class in Russia is not the basis for liberal democracy. These Western - Is not even pluralism, a rule of law etcetera middle class is happy where it is, and besides you know according to all extremist World bank said that last year, according to the world banks saving - well, we have conclusion, the major technological progress is being done on the middle size and a small enterprise, this is the trigger this is the the in fact the the major the major instrument of technological progress, our middle class what is doing and you know what our middle class is doing? Food stuff, computer stuff, I mean just assembling the Chinese parts etcetera and as they end, as a result we have only 0.3 contribution to the world's technological process, so this is the role of our middle class and especially when we what we call middle class? We call middle class the people who are either working for the state directly, bureaucrats or people who are working for the state companies, will they really need to have a progress or modernization? So simply these examples shows that there are no axioms in Russia and we have to at least to reread and to rethink some of the myths that prove true in other transformations but are good for nothing doing Russia's transition to now what to something. My last question, then we will throw it open the the other new group which is happily an inevitable development in all societies is the young, we have now the people born in 1985 who are 22 years old think of it, what they like and what's the political sensibility do they have how how will they be different I mean if you if you come of age in Russia without the [0:35:45] _____ access without the soviet communist party, you a whole different outlook it seems to me that your parents but I am not sure how it's different and what the significance of the difference is. Bob I am not ashamed to say that there are things that I do not know may be I will show example to all the people who don't know that but pretend to know everything about Russia. So I really I am at a loss thinking about the younger generation. I will give you a several data firstly according to the polls beginning of this year, only two percent of the young people in Russia between 18 years and 24 do not have money for food. The rest have money for extra things, cars etcetera etcetera this is the most adaptable social group in Russian population. People among 25 or 39 years of age, among them already 20 percent of people do not have money for food, among people older than 50 years older yes approximately 40 percent of population don't have enough means to buy food, so we have the category of people who are adaptable - who are adapted. And at the same time I will urge you to look at the social - at the analysis social poles done by Sir Amend Elson together with [0:37:09.0] _____ better reliable a Russian politest who came to a conclusion - it seems to me that at the beginning of this year they did who came to a conclusion that these category of Russian population is the most anti western and anti American, more than 65 percent of those people say or believe that United States is an enemy whereas in the whole population only 43 percent of Russians do not have benevolent attitude towards the United States where else 45 percent of Russians have benevolent attitude towards the United States which makes Russia in general with middle aged population, with the people in their forties one of the most pro American society in the Europe especially when we look at the French, something like 17 percent have inbenevolent attitude towards Americans and Italians etcetera. So I am at a loss how the young people will behave. What am I afraid of I am looking at [0:38:07] _____ his issue on _____ I remember the exam of _____ you know we cannot make even guesses, this is this will be the team leads reading how the people will behave after they are in euphoria, this generational reference are in euphoria. Russia is back and we screwed everything. So how they will feel in moments of crisis? Or whether in moments of crisis, they will become anti thesis, how they will behave I don't know. It could not be not a very much syndrome but some other. Post Putins post soviet syndromes. I don't know, I am at a loss very optimistical conclusion. Thank you. Okay who out here wants to join in?