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The World in the 21st Century: Addressing New Threats and Challenges

Speaker: Sergey B. Ivanov, minister of defense, Russian Federation
Presider: Richard N. Haass, president, Council on Foreign Relations
Introductory Speaker: Mikhail Fridman, chairman of the board of directors, Alfa Bank
January 13, 2005
Council on Foreign Relations

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New York, N.Y.


RICHARD HAASS: Well, good evening, and welcome to the Council on Foreign Relations. I'd like to think that every night's a special night here, but tonight's a particularly special night for two reasons: one is, we're honored and fortunate enough to have the minister of defense of Russia, Sergey Ivanov, with us— and I'll give him a more proper introduction in a few minutes. But tonight's also important for another reason, which is that this is the inaugural Alfa Bank lecture, or more formally, the Inaugural Annual Lecture on Russia and Russian-American Relations, sponsored by Alfa Bank. And this is a series that was established about 18 months ago, and we have labored hard to start it on the right level with the right person, and we have succeeded perfectly tonight. And what I'd like to do is, before, again, I turn to the minister, is ask Mikhail Fridman, who's chairman of the board of Alfa Bank, to make a few introductory remarks, and then we will go into the talk. Afterwards we'll have questions, and so forth. But, Mikhail, over to you, sir.

MIKHAIL FRIDMAN: First of all, thank you for this kind introduction. And good evening, ladies and gentlemen. First of all, I would like to thank the Council on Foreign Relations for co-sponsoring today's event. I am very happy to announce the first Alfa lecture, which we probably would like to continue in the future. We always think that this kind of event is an important opportunity for establishing permanent, constant dialogue on the state of U.S.-Russian relations. From our side, we always think that— we always try to contribute to Russian relations as an advocate, as a promoter of Russian values in the West, and U.S., and more broadly, Western values in Russia. We do believe that it is our strong competitive advantage as a business philosophy. And frankly speaking, we've been quite seriously benefitted from this strategical advantage. I am proud to say that Alfa was the key player in establishing and developing joint venture TNK-BP [Tyumen Oil Company-British Petroleum]--that's [US $]18 billion, by far [the] largest transaction in the whole history of the Russian business, was signed a year and a half ago with the presence of [Russian] President Vladimir Putin and [British] Prime Minister Tony Blair. And I'm happy to say, as the chairman of this company, that the company is developing fastly and successfully, and that clearly confirmed, you know, the advantage of mutually profitable cooperation between West and Russia.

In addition to this lecture, we established one other initiative which I think will be very useful. We allowed for mid-career American professionals to spend from six to eight months— a group of that people— to spend from six to eight months every year in Russia in different places, in Moscow and provinces, to work for private and public sector. That allows, from our point of view, improved professional level of knowledge of Russian reality. And I'm happy to say that we agreed with President Haass that Council on Foreign Relations will send fellow every year to participate in this program, to live and study in Russia. I think that Russia needs professionalism of people who will determine American policy towards Russia in the forthcoming future.

But let's switch to our today's agenda. I would like to tell you very shortly one very true story. As I said before, because we are looking for improving Western-Russian relations, Alfa was the general and only sponsor of a unique historical event which took place in summer 2003 in Moscow. That was the concert— actually, the first and single concert of Sir Paul McCartney in Red Square. [Laughter] Frankly, that was, you know, an amazing, unbelievable, unforgettable concert, show. Can you imagine that 70,000 people sing all together "Back in the USSR," including President Putin? [Laughter]

SERGEY IVANOV: And I confirm it.

FRIDMAN: Yeah, in the Red Square, and accompanied by the rings of the Kremlin's bells. And it was a very long concert. It was like almost four hours. And it was probably very difficult for Sir Paul, but it was a little bit less difficult for him than it could be, because it was the man in the Red Square who supported him all the time, who sing every single word in every single song during that concert. And that man was minister of defense, Minister Sergey Ivanov, who [laughter] is our guest. And after the concert, we asked him where did he get all these words of all these songs, and he answered that he started to study English just from the text of the Beatles songs.

And a couple of days ago, Minister Ivanov and [U.S.] Secretary [of Defense Donald] Rumsfeld signed an agreement about limits of proliferation of so-called MANPADS [Man-Portable Air Defense Systems]. That's a next giant step in long path towards more secure and safe world. And I deeply believe that to solve this unbelievably sophisticated problem, for Minister Ivanov [inaudible] the spirit of Strawberry Fields and the Yellow Submarine. [Laughter] So let me introduce Minister Sergey Ivanov, our outstanding politician and our outstanding state service man.

IVANOV: Thank you.

HAASS: Let me just say again that this meeting is on the record. My one request I forgot to make is, if you have cell phones or other versions of modern electronics, if you're listening to the Beatles on your iPod, please shut it off. The minister's going to speak in English, by the way. And let me just also say that he's been in this job now for nearly four years— about to have your fourth anniversary this March. And the timing, I think, could not be better for this talk. We were talking about it beforehand, that I think we in this country are potentially on the verge of something of a debate about our relations with Russia. And as we've seen in other cases, and I don't think it's unique to Russia, there's a question of how do you maintain and even improve your foreign policy cooperation in a context when there are things that are judged to be going on inside a country that give us pause. We've had this debate vis-a-vis other countries in the past— China, sometimes with Pakistan. And again, I believe we are about to have such a debate in this country about Russia, and for that reason, again I don't think the timing could be better to have someone of the minister's experience and stature come here. So, sir, thank you. Welcome to the Council on Foreign Relations.

IVANOV: Thank you.

HAASS: And as you go up, let me also just, before I forget my manners— I apologize— tonight there's Peter Aven, who's also with Alfa Bank, and I've also neglected to welcome Russia's very able ambassador to the United States, Yuri Ushakov. So Yuri, welcome to the Council as well. Sir, the floor is yours.

IVANOV: Thank you. [Applause] Well, good evening, ladies and gentlemen. First of all, I would like to thank the Council for this brilliant opportunity to speak to so much distinguished Council. It's both a privilege and pleasure for me. And I wish we had the same Council in Russia. I would also like to note that the atmosphere of our meeting invites to a candid and informal discussion, and at the same time a meaningful, businesslike conversation.

In my remarks, I'm going to address some issues which I believe are fundamental to the current state of international relations in terms of strategic stability and security. I know I have around 20 minutes, so I try to make it not longer. I understand you don't like long speeches. Neither do me. Without pretending to be original, I will start by saying that the Cold War era is gone and never to return. The stereotypes of thinking from the times of confrontation are dying away, too, though slowly. The world has changed. We are now more aware of what a complex and interdependent world we live in, facing new threats and challenges. We also come to a common understanding of the fact that global risks require an adequate response, above all, through joint efforts by a world community. In other words, the world today has to come up with such political, diplomatic, economic, and military tools that would eventually preclude any threats posed both to regional and global security. Above all, strategic stability in the present-day world is inseparable from the reductions in strategic offensive armaments. And I think you know what is going on here between the United States and Russia, so I will omit that passage.

Both Russia and U.S. experts continue to cooperate on missile defense. In so doing, major efforts are focused on two areas, notably establishing transparency measures and furthering cooperation. We cannot but have some concerns about reports of possible plans to deploy U.S. silo-based anti-missile launchers in Eastern Europe. To say the least, the choice of the deployment area for such systems, in terms of intercepting missiles capable of attacking the U.S., is rather arguable. Moreover, if a decision to deploy such systems is eventually taken, then it could substantially, I'm afraid, undermine the work of— on theater missile defense programs under way within the framework of NATO [North Atlantic Treaty Organization]-Russia Council [NRC], as well as would have an adverse impact on the entire system of Euro-Atlantic security. But by the way, I don't exclude direct bilateral cooperation between the United States and Russia on ABM [anti-ballistic missiles]. But this is a very sensitive issue, and we want it to be totally government-controlled. And President Putin mentioned that already while talking to President Bush. That's why Secretary Rumsfeld and me— we are working on a draft agreement on Russia-American cooperation in the defense industries. And when we finish it— it will take some time— it will make it possible to cooperate even in the ABM issues.

Now a couple of words about NATO-Russia relationship, which is undoubtedly one of the crucial contributors to both global and regional security. To date, we have had a rather intensive dialogue in place between NATO and Russia on a wide range of issues. Among other things, the NRC has under its auspices about 20 specialized groups up and running on a permanent basis. Each group is orientated towards specific results. A NATO-Russia Council work program has been endorsed for the year 2005. We face the task of making its potential work in the most promising areas of cooperation: tactical missile defense, nonproliferation of weapons of mass destruction and their means of delivering, crisis management, interoperability, as well as counterterrorism, of course. The euphoria which prevailed in the wake of the inception of NRC is gone. Now is the time for practical work in such areas where NATO and Russia interests coincide.

As regards nuclear safety and security, it is worth mentioning the Emergency 2004 safety exercise, which took place last August in Russia. It has proved that Russia was capable of ensuring dependable controls, safe custody, and security at nuclear facilities. It should be also noted that this exercise was the first of its kind, with 49 observers from 17 NATO member states involved. This exercise has served yet another testimonial to the Russian capability both to reliably safeguard its nuclear facilities and weapons, and to ensure their full safety and security. I feel confident that cooperation in securing nuclear materials and munitions will be further advanced through Road Warrior exercise, which is scheduled for this April in [inaudible]. Russian military are the only ones who are invited to take part, and we will take part.

Russia's joining the NATO-led Mediterranean actors in their operations is yet another important route for our cooperation. The signing of the exchange letters has settled all of our international legal issues regarding our participation in this operation. At the same time, Russia is opposed to extending the mandate of this operation to the Black Sea area in the firm belief that security needs as well as new threats and challenges in this region can be successfully addressed by the Black Sea for naval forces. At the same time, our cooperation is not problem-free. I wouldn't like you to have that impression. A variety of developments take place around Russia, some of which can well be interpreted as threatening our security. We and NATO are partners, but we don't see any point in the alliance enlargement— just as well, by the way, as we don't see any point in developing strategic missile defense. We want all those developments to unfold in a transparent manner, not in the manner the Baltic States joined NATO, when from day one a number of combat aircraft started patrolling airspace along our borders. The question is, is there anything threatening Russia or NATO security happening in this region? I'm not sure. We're also basically differ from NATO in how we approach the ratification of the Adapted Treaty on Conventional Armed Forces in Europe. I wouldn't continue with that subject because I'm sure you know it.

Russia has already repeatedly spoken against double-standard practices while assessing terrorist threat, as well as against condoning terrorists, their cronies, or sponsors. Those practices, unfortunately, still do persist. Beslan, in North Ossetia, has experienced a horrendous tragedy comparable in its proportions to the cruelty of 9/11 drama in New York City. Preliminary investigation into the hostage-taking standoff at that Beslan school indicates that terrorists were guided and financed from abroad. From among the terrorists killed in Beslan, five have already been identified as Arabs. In fact, there is plenty of evidence that terrorist cells operating in Chechnya and in some other regions of Russia are of international origin. Suffice it to say that mercenaries from 50 foreign states were involved and killed within the area of counterterrorist operation in Chechnya. According to our investigative reports, between 150 and 200 foreign mercenaries are currently active in the Republic of Chechnya. Turkey, a NATO member by the way, is the record holder in this respect. Dozens of Turkish citizens or nationals, who are part of armed terrorist groups, have by now been killed in Chechnya. Taking this opportunity, I would like to once again make it absolutely clear that Russia has never negotiated and will never do so or have any contacts whatsoever with terrorists. We expect that our NATO partners will also follow similar principles and will not grant asylum to notorious persons and those on the wanted list.

Generally speaking, eliminating double standards as applied to any issue is a crucial precondition for a new system of international relations. For example, one may not fight aggressive separatism or religious extremism while encouraging Kosovo independence, even if it is done covertly. It so happens as if those who act in such manner don't realize what a chain reaction can thus be triggered off, and not only in the Balkans. One cannot demand that refugees be returned to one country or another, while turning a blind eye on the Serbs, the largest group of refugees in Europe, numbering half a million.

Speaking about the problems of the present-day Europe, one cannot but take into account the role of the European Union [EU]. Here I will comment only very shortly. To my mind, as a whole, EU-Russia defense and security cooperation is in an embryonic stage, considerably underperforming as compared to the level of cooperation enjoyed by some individual NATO countries, China, or India. And it's a paradox, but more than half of Russian foreign trade is already within EU. I mean that, economically, we're already well integrated with European Union. But on security policy, we are lagging behind if you compare it with NATO, China, or India. I would also like to make a point: Russia seeks to ensure security of states and nations through cooperation on the basis of principles and rules of international law. In so doing, our country has consistently been pressing a policy of playing down the role of the military force and promoting the role of pre-emptive and stabilizing political measures to prevent or settle crises, as well as to further all-around cooperation, including that in the military sphere.

Now about proliferation. I think it works well, particularly in our relations with United States. There are some problems— you know, for example, Comprehensive Test Ban Treaty; it's still a tricky thing and we don't know how United States will finally make a decision whether to ratify it or not. But I wouldn't stress the point on that. I know you are very much interested in North Korea. And recent developments in North Korea and announcements of its withdrawal from the treaty regime are regarded by us as those running counter to international efforts in nuclear nonproliferation. I believe we should do all in our power to bring that state back within the constraints of the treaty. To this end, what is required is a [inaudible] of compromise solution, and above all, within the framework of the ongoing six-party negotiations. North Korea, by the way, is a state which shares a common border with Russia. The pressure scenario, particularly the military pressure scenario on North Korea, is unacceptable to us, because it's likely to spark off a regional conflict right close to our border. As regards chemical and biological weapons nonproliferation, I will skip that as well.

Russia has acceded to the core of the Proliferation Security Initiative, by the way, because precluding illegal shipments of weapons of mass destruction or their means of delivery from abroad is absolutely crucial to us. The fight against WMD [weapons of mass destruction] black markets pursued jointly with major foreign countries is fully consistent with Russia's best interests, since that real threat is geographically most close to us. And in this area of cooperation— I mean Russian-American cooperation on WMD— I think we are not even partners now. Our relations here are very close to allies— not partnership, but allies. Recent events have once again confirmed that real danger by WMD technologies making way to black marketplaces like Pakistan, Iran, North Korea, and to counter this danger it is essential to make concerted action which will serve as an added practical mechanism for reinforcing the existing system for nonproliferation agreements.

One of the myths existing in the United States of America in regard to Russia alleges that, first, nuclear weapons and their components in Russia are ostensibly poorly guarded and easily accessed by the so-called Russian mafia. And secondly, the conservative-minded Russian top brass, intelligence community, defense industry, secretly ship WMD components or technologies, which are prohibited for export, to Iran or Iraq— you name it. I would like to put it straight. It's a complete nonsense. As the Russian Federation emerged as a state, there has not been a single "loose nuke" case on the record. Not as little as a gram worth of weapons-grade uranium or plutonium has been lost. The mythology demonizing Russia as a habitual proliferator is being trumpeted not only in action movies or some quasi-analytical media publications, but is already being used by some fortune-seekers to cash in on it. For instance, in Afghanistan there have been already reported instances when containers, complete with technical Russian-language markings, allegedly containing weapons-grade uranium, were offered on the black market. I will tell you, you are the first audience where I announce such an information.

Now a couple of words about the situation in the regions in crisis. Our basic assessment of the developments in Iraq remains unchanged. We believe that achieving national [inaudible] and reconciliation in that country is indeed the most important prerequisite for the sustainable stabilization effort. All of the political forces of the Iraqi society should be part of that process, including the opposition. But clearly, those organizations which prepare or stage acts of terror are not a case in point. And [Iraqi Interim] President [Ayad] Allawi, who was recently in Moscow and met our president Putin, a lot has been discussed about political process in Iraq, and in theory we support it; we would like to support it. But the situation— well, you know better than me the situation in Iraq. But we support the drive for free and democratic elections Iraq.

As regard the situation in Afghanistan— very shortly. The first presidential election in that country, the victory of [President Hamid] Karzai and the inauguration of a new Cabinet of ministers are a new, important step towards implementing the Bonn agreement [on Provisional Arrangements in Afghanistan]. At the same time, we believe that a number of prominent and widely popular leaders of the ethnic minorities could also have seated in the new government, because inside the government they would have been more useful than remaining in the opposition. Along with that, we consider as dangerous the pattern of [inaudible] the so-called moderate Taliban. I don't believe that Taliban may be moderate, or not moderate, or radical, I don't believe it in that divisions. And of course drugs; it's a huge problem in Afghanistan, and we wish ISAF [NATO's International Security Assistance Force] forces act more directly to counter it.

Ladies and gentlemen, rest assured, Russia, having opted for the development of the democratic state, and adhering to the principles of a multipolar world, has not entertained or is not entertaining any imperial ambitions. The notion of [inaudible] imperialism in Russia is [inaudible] by some politicians in the West, and is nothing more than yet another myth in public circulation. We fully understand that our country has no way other than the integration into the world economy on the basis of rules and principles of international law, mutual respect for national interests of each other.

Now I would say I couple of words about Ukraine. In the run-up to the presidential election, we started receiving persistent and unequivocal signals to the effect that the West would not recognize the election if a presidential hopeful who would not satisfy it prevailed. Statements were heard from Europe that Ukraine should be with the West, Ukraine should be at the same place where it stands. Such matters in regard to a sovereign state, I think, are fraught with the most grave consequences. The entire history demonstrates that democracy cannot be imposed upon from the outside. Without dramatizing the situation in Ukraine— and I remember President-elect [Viktor] Yushchenko's statements that he would like his first foreign visit to be to Moscow— but I would like to remind you that, in the long history of Russian-Ukrainian relations, there was even tougher time for Russia to build up relations with that country, but we would invariably come up with the right and correct solutions. I am sure it will happen as well this time.

Russia has done everything so that the CIS [Commonwealth of Independent States] states would get back on their feet as independent states. Down the line, we also intend on continuing a policy based on the principles of good neighborliness, genuine equality, full respect for both their past and the future alike. As a whole, the CIS states are the top priority of our foreign policy. There are quite apparent reasons for that indeed. The CIS states are home to around 25 million Russians. We largely share the same common history, traditions, and culture. Virtually all CIS citizens speak Russian. Inseparable are our economic ties. With a rare exception, no visas are required, which creates a situation when dozens of millions of CIS citizens practically live and work in Russia, thus providing for their families back home with money transfers, which in some cases outsize the national budgets of some CIS states. Besides, Russia is in fact subsidizing most of the Commonwealth states by providing them with energy resources at prices markedly below world market rates. These are precisely the reasons why we react and will react the way we do to exports of revolution to the CIS states, no matter and what color— pink, blue, you name it— though of course we recognize that Russia— and we understand that Russia has no monopoly on CIS states. That's out of the question.

Now, Russian domestic policy. I know that you would ask it anyway. The whole world, including the United States, is closely watching the developments back home. A case in point is the reform of the bodies of state power. Unfortunately enough, in some circles abroad, efforts by the Russian leadership in this regard are being perceived as running counter to democratic principles. I believe this perception is not fair, or not totally fair. In the huge multinational country, the local authorities, with due focus on regional problems, should also be guided in their day-to-day operations by the overall national interest. Therefore, a new mechanism where deputies of local legislative assemblies, of the constituent entities of the Russian Federation, voted into power by direct secret ballot by the entire eligible constituency, shall endorse a candidacy for the governor, proposed by the president, presents, in my opinion, the best possible solution for Russia, and is undoubtedly fully consistent with the principle of democracy and the Russian constitution.

In the south of Russia, for example, we have some multiethnic constituent entities of the federation. In Dagestan, for example— in Dagestan, there are dozens of ethnic groups, with four or five of them being in majority. Back in the Soviet era, as there were no such notions as a contested election, the leader of the region would routinely be appointed by the Communist Party from among the representatives of one ethnic group. The chief of the legislative branch would be picked up from another ethnic group. The prosecutor general would be picked from a third group. And that's how it worked. And by the way, it worked, strange as it is. It did work in the Soviet times. But some years ago, for example again, we held an election in a small region which is an entity of the Russian Federation. It's called Karachaevo-Cherkessia. Because the Karachev people are greater in numbers, accordingly, of course, their representative was elected. That was predictable, totally predictable. But this nearly resulted in a civil war because we had to bring even interior troops, to pull them in while the representatives of the minority which lost, the Cherkessians, they raised the issue of establishing a new region of their own as part of the federation. But I believe that instead of redrawing boundaries inside Russia, it is far better to slightly readjust the electoral system in the region, especially where in real life people vote not for a political platform, but only according to ethnic origin and nothing else.

It might be difficult or hard to understand this here in America, where you don't have such national, territorial formations carved out on the ethnic principles, say Hispanic, Jewish or Chinese, Arab states. You don't have it; we do have it. Besides, governor elections in Russia have witnessed yet another clear-cut trend, that of elections being influenced by local plants, oligarch entities, or sometimes even [inaudible], I have to admit it. As to voting during state Duma elections using party slates only, I think it's much easier to understand. This is a routine Western practice. And I can say that with full confidence because I lived in the West for many years. I am convinced that voting on party lines or party slates alone to the national parliament will only help to develop our young political system.

Incidentally, in many Western countries, by the way, governors of territories or provinces are not elected officials, but they are directly appointed straight on orders from the capital city. There are such countries in Europe, quite a lot. Therefore, any talk of Russia sliding back to totalitarian rule, a dictatorship, infringing on the freedom of the press and determined to re-establish KGB [Committee for State Security] is no more than a Cold War propaganda cliche. We are willing to be part and parcel of the civilized world while remaining masters in our own house, a country where government officials do not get their salaries from different foreign foundations.

Yet another issue, on Chechnya. The war in Chechnya is gone. There is no war, I can assure you. There are disturbances, there are small fighting, but the part of history when the Russian army fought a war in Chechnya is gone. And also we're very much concentrated on human rights issues in Chechnya. I can tell you that there are dozens of Russian military who have been already accused by court for criminal offense, including offense against civilian population, and they are in prison now. And we are really mindful about that.

Now a few words about Yukos. Again, I am sure you will ask it anyway. All actions in regard to this oil company on the part of the Russian law enforcement and taxation authorities are taken in accordance with our law. This fully applies to the recent auction which resulted in the Rosneft, state-run oil company, becoming the actual owner of Yuganskneftegaz, a Yukos subsidiary. I will take the liberty of saying that the deal has been effected on three market terms. This is, the government has secured its economic interests by making full use of legal market mechanisms— contrary, by the way, to what happened in the '90s, as in privatization spree, if you remember, many of the recently created businesses used different loopholes, including those transgressing the law then in effect, ripping off multi-billion-worth of government property. As regard to the hearing of the Yukos case in the Texas court, I think quite few of you are familiar with the fact that two years ago, one of the foreign Yukos shareholders went to the same court, exactly the same court, with a— filing a lawsuit for a different reason. Back then the case was dismissed by reason of the court's lack of jurisdiction over the company registered and operating in Russia. But what happened now? One of the managers, right prior to filing this lawsuit in court, as a matter of urgency, moved to a Houston apartment and had several million dollars transferred over to his account. And bingo! The court turns out to be legally in a position to try the case worth dozens of billions of dollars. I believe that scares about investing in Russia are by far over-exaggerated.

In conclusion, I would like to underscore that as a whole, the fundamentals of Russian policy remains. We are going to pursue the policies in a manner becoming of a strong and peace-loving state. This is to say, policies based on respect for international law, on equal dialogue, and promoting partnership in the interest of creating a system of fair and secure international relations.

This afternoon, I repeatedly used the word myth and mythology in circulating in Europe, sometimes in the United States. I made a point of emphatically trying to explain to you what our government stands for in this respect— though I don't indulge in a vain hope; there is still a long way to go before we reach a true common ground, while myths will live their own virtual life for years to come. Thank you so much. Sorry if I took a lot of your time. [Applause]

HAASS: Thank you, Mr. Minister. I'd long wondered where the word "bingo" comes from, and now I know it comes from the Russian. This is good to know.

IVANOV: Exactly. I like the game.

HAASS: Let me, if I may, begin with one question. One of the issues that most concerns Americans is the stability of Russia's nuclear weapons and its nuclear materials. And you essentially defended the safety of the system. So let me ask you two questions based on that. One is, many Americans are looking at the so-called Nunn-Lugar [Cooperative Threat Reduction] Program and saying it would take, roughly, a decade or so to be fulfilled, and are saying that it should be accelerated, and to take place over, say, three, or four, or five years. If the United States proposed to do that, would Russia accept it?

IVANOV: Well, first of all, I commented in my speech about safety of Russian— at least nuclear. That's what I am responsible for; weapons-grade plutonium, uranium, and of course the nukes. And there is not a single case on record when even a gram of military-grade plutonium or uranium has been lost. There were other cases with isotopes, with low-enriched uranium, but they are not military uranium. Now, the Nunn-Lugar Program. I know it quite well. I met the senators several times. There is one problem there: it's called [the] civilian liability clause. And we discussed that problem with President Bush the other day in Washington, with [Secretary of State-deisgnate] Dr. [Condoleezza] Rice, with [National Security Adviser-designate] Stephen Hadley. And we expect that problem to be solved soon. But we are eager to cooperate. We think it's in our national interest. And the program so far works. Maybe somebody would say it doesn't work so well as it was thought, and we'll agree with that, but still it works.

There are still, I think, 50 or 60— I may be wrong here, but around 50 or 60 decommissioned Russian subs waiting to be processed and utilized. And it's an important question for me, because I have to keep navy crews on that subs instead of letting them go on new modern ships to the sea. They have to guard it. And we're interested in dismantling them as quickly as possible.

HAASS: Under the Moscow Treaty [the Strategic Offensive Reductions Treaty], as you know, the United States and Russia agreed to take thousands of nuclear weapons off of operational status, but not to destroy them. Would you be open to destroying those systems if the United States also did the same?

IVANOV: Oh, of course, only on a reciprocity basis.

HAASS: But if the United States agreed, you would agree?

IVANOV: Yes.

HAASS: One or two other questions, and then we'll open it up. You talked about Russia's relationship with NATO and you spoke of your lack of enthusiasm for future NATO enlargement. The question I have for you—

IVANOV: Enlargement, yes. Mm-hmm.

HAASS: Could you imagine a time when enlargement might include Russia?

IVANOV: Not in my lifetime. [Laughter] And there are reasons for that. Look, I'm quite open here. I don't think both sides are really interested in Russia joining NATO because then Russia would take obligations which we don't have now, and in some areas we have our hands free, simply. On the other hand, NATO, if it accepts Russia, would defend a territory as far as Alaska with all Russian neighbors. We have 17 of them, and not all of them are really nice. [Laughter]

HAASS: We could pursue that, but we [laughter]--obviously, the Russian military retains its principal role in defending the homeland and providing for Russia's defense. What else, though, do you see the Russian military's purpose in this world? Here we are, it's 2005. I don't see anyone poised to invade Russia. So what, then? When you get up in the morning, what do you see as the purpose of Russia's military beyond its borders? And is it up to it? Do you think your military has that capacity?

IVANOV: Well, when I wake up in the morning, first thing I do, I read intelligence reports provided to me by General [Valentin] Korabelnikov, who is sitting here, the head of the Russian military intelligence.

HAASS: [Laughs.] Which, by the way, are available on the back table, yes. [Laughter]

IVANOV: Good point. Then I try [laughter] I try to maintain law and order inside the Russian army because it's an army. But seriously, of course, I mentioned interoperability, for example. We have already many military exercises with the United States, France, India. Last year a Russian nuclear sub exercised together with a French nuclear sub underwater, communicating, maneuvering. Can you imagine this happening even 10 years ago? That was unthinkable, but it already works. And then the Russian sub visits the French port where all French nuclear submarines are stationed as a friendly visit. It's fine.

One more thing. This huge catastrophe in Southeast Asia, maybe you don't know, but Russia has already sent dozens of huge military cargo planes there together with field hospitals, with medicine, purifying water systems. And I know the American soldiers and the American Army are also there, particularly in the area of Banda Aceh. And when we discussed this yesterday in Washington, we instructed both our military top leaders who are there in the area to come to contact and cooperate because they do the same job. I think it's a good idea.

HAASS: One last question, and then I'll open it up. Obviously, Russia and the United States disagreed quite strongly recently over Iraq, but let's broaden the question. Are there circumstances under which you believe preventive strikes, military strikes, are warranted? And could you imagine, for example, the United States or Russia legitimately carrying out preventive strikes without the support of the United Nations Security Council?

IVANOV: I will answer that question. But excuse me; I forgot we have a lot of Russians. So maybe we need a translator.

HAASS: Oh. I apologize. I'd forgotten.

IVANOV: Yeah. And I forgot.

HAASS: Do you want to—

IVANOV: Ah, yes. Can you translate? [Translates into Russian]

HAASS: Exactly. [Laughter]

IVANOV: You are a secret Russian speaker.

HAASS: Very secret, yeah.

IVANOV: [Through interpreter] Well, I have actually expected this issue to crop up in this discussion. That's why I picked up along with me one of the latest U.N. Security Council resolutions on counterterrorism. So just one small quotation: "While the United Nations calls upon all of the states to prevent acts of terror, once this prevention fails, it also calls upon all the states to take such action which would be comparable to the act perpetrated." So just in reply to your question, I do not rule out the possibility for Russia to strike preventively against terrorist bases. Well, I guess I'm pretty well aware of the U.S. realities here on the grounds, and I believe that the U.S. would follow this pattern as well, would do the same, once it knew that somewhere abroad a terrorist attack, comparable to that which had been perpetrated on 9/11 or at Beslan, would be prepared or staged [inaudible].

HAASS: We could expand a little. I've promised to open up— we're going to go a few minutes over, so let me warn you in advance we're going to violate one of the most sacred rules of this institution and go a few minutes after 7:00. If people would stand up, state their name and affiliation, and make as a brief a question as they could, we'll squeeze a few in. Sir?

QUESTIONER: [Inaudible] Thank you very much, Mr. Minister, for a very comprehensive review. Several of my colleagues who are here tonight and I had a chance, on a Council trip early this year, to visit NATO and then Ukraine, and talked about Ukraine-NATO relations. We had a chance to meet with the past president— or soon-to-be past president— [Leonid] Kuchma and future President Yushchenko; also, the former foreign minister [defense minister], your counterpart, Mr. [Yevhen] Marchuk, who was fired or dismissed very close to the election. He was very pro-NATO engagement. I understand that Mr. Yushchenko is probably likely to come to Russia first and tread very carefully. But if Mr. Yushchenko engages with NATO and moves back towards the Marchuk approach, how are you and how is Russia going to react if close cooperation between Ukraine and NATO comes together, understanding that you've said they will always find a way to work it out?

IVANOV: [Through interpreter] Well, actually you've forced me to comment upon the domestic affairs of some other sovereign states. Well, I have already underscored this fact in my remarks. We take a very considerate, politically correct approach to any state, especially to the CIS states, so that later on an accusatory finger would not be pointed upon us allegedly being engaged in neo- imperialism. Well, I know pretty well the ex-defense minister of Ukraine, Marchuk, and the current defense minister, [Oleksandr] Kuzmuk. We have regular meetings. We have big cooperative plans for military— military and technical cooperation. And Russia also, quite in earnest, I believe, especially in the past years, in the past recent years, has been cooperating with NATO. It's actually their sovereign [inaudible] and the sovereign entitlements and the sovereign right of Ukraine how, to what extent, in what way Ukraine is going to take its relationship with NATO. Let's wait and see.

HAASS: Thank you. Already we've got lots of hands, and I'm prepared to frustrate many people. Yes, ma'am? Oh, it's the gentleman next to you. I apologize. Sir, with the glasses.

QUESTIONER: Thank you. Ian Bremmer. Mr. Minister, you debunked the myth of Russian neo-imperialism. I'd like you to comment on the myth of U.S. neo-imperialism. Two weeks ago, President Putin asked a perhaps rhetorical question about whether or not the United States was attempting to isolate it. In that context, I wonder if you could comment on the role of U.S. military, both troops and advisers, on the territory of Georgia, the Kyrgyz Republic, and Uzbekistan for a protracted period, and your views of that going forward.

IVANOV: Did you mean Russian troops in some states or American—

HAASS: U.S. troops.

IVANOV: U.S. troops. [Through interpreter] Well, I've always— as for the U.S. isolation, no one in a sober mind— in his right mind would now be promptly [inaudible] on this— or would speak out such delirious ideas. As for the U.S. military presence in CIS territories, it's true this area is rather sensitive. Over the past four years, we have had with the secretary of defense, Mr. Rumsfeld, roughly 18, 19 meetings in all, to the best of my knowledge, and each of the times we did take up this subject for discussion. As I was talking about the Russian top priorities, the top priority thrust in its international relations being developed exactly with the CIS states, I was also mentioning the security area.

As of today, Russian military presence or Russian military bases are within the CIS states, practically in each of the CIS states apart from Turkmenistan and Uzbekistan. That's true, a Russian military base and a U.S. military base are located just 30 kilometers away from each other [inaudible] Kyrgyz territory. But they at least are with each other in a rather peaceful manner. But their status is a bit different. The U.S., the Manas airport stationed military base has been settled down there for the duration of their counterterrorist operation out in Afghanistan. And there were Russian military base stations down there in Kyrgyz [inaudible] we are allies with Kyrgyz. They are, in fact, one and the same military and political organization as the organization of the collective security treaty.

As for Georgia, there we also have our military Russian bases. Well, and U.S. military presence also popped up there, first train-and-equip program, now another program has also been [inaudible]. To the best of our knowledge, on the second of the programs I have mentioned, Georgian service personnel are being trained so that further on, they would take part in the peacekeeping operations outside of Georgia, say in Iraq. And we are not opposed to that in any way. But it's of fundamental importance to us so that those U.S.-trained Georgian service personnel would not start off some kind of domestic conflict about involving Abkhazia or South Ossetia, including the ethnic conflicts which are there. But overall, foreign military presence in the CIS states is quite sensitive to us, not U.S. military presence, but foreign military presence as a whole, and I should admit this fact. [In English] It's a very sensitive issue for us.

HAASS: We've got time for maybe one or two more. Sir?

QUESTIONER: Mr. Minister, you—

HAASS: Please identify yourself.

QUESTIONER: Yeah, I'm sorry. [Inaudible] from The New York Sun. You gave the explanation of your government's actions concerning Yukos as being perfectly legal and complying with Russian law. However, there's a widespread perception that those actions really stemmed from the politics of personality. What could you say by way of reassuring Americans that their capital, if invested in Russia, would be safe and that the Russian government would not take arbitrary action to dismantle businesses in the fashion that Yukos was perceived to have been? Thank you.

IVANOV: [Through interpreter] Did you say you were from The New York Sun?

QUESTIONER: Yes.

IVANOV: [Through interpreter] I didn't know the name, but I know Phoenix Suns. That's the nice basketball team. [Laughter] Now about your question. Yukos again. Now back to the Yukos question. As the defense minister, I have quite plenty of things to do, and that's not exactly something falling within my purview. I'm not aware of all of the details in this case, but I'm absolutely sure that it's similar to a court of justice which can rule on— they're seeing whether [Russian businessman] Mikhail Khodorkovsky or some other persons accused by the court are guilty or not. That's exactly the procedure of a democratic state. Now as for the investments, U.S. investments included, as far as I know, the Conoco-Phillips oil merger have an effective deal within the Russian Federation and is pretty well satisfied with that. As far as I know, a very big-time Alcoa U.S. operator is intent to purchase two Russian enterprises, and that deal is already in the pipeline. And the plants which Alcoa is planning to buy in Russia also relates to the production of high-tech items, including the defense items related hardware and missiles. These steps the government of Russia has also worked out the so-called behavioral pattern or the behavioral positions for the U.S. operator— for the Alcoa company to go by, and it does not actually prevent this company from doing things in even such a sensitive area.

HAASS: Great. Thank you. I've now violated the most sacred of all rules by 10 minutes, and I dare not press my advantage. So let me just very quickly thank the minister for getting this series, the Alfa series, off on exactly the level we wanted. I want to thank again Mikhail Fridman and Peter Aven for their support. And I want to thank you all for coming here tonight. Sir.

IVANOV: Thank you. [Applause] Thank you. [Applause]

HAASS: Thanks very much. You covered a lot of ground.

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