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Roundtable Series on Public Diplomacy: Moscow, Washington, And The Future Of The Political Opposition In Russia

Speaker: Boris Nemtsov, Co-Founder, Solidarnost (Solidarity), Russia
Presider: Daniel Senor, Adjunct Senior Fellow For Middle Eastern Studies, Council On Foreign Relations
June 24, 2009, New York.
Council on Foreign Relations

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DAN SENOR: Good afternoon. Welcome, everyone, and thank you for joining us for this special roundtable with Boris Nemtsov.

As a preface, there is one Council rule we will comply with and one we cannot comply with today. The hard stop for this is at 6:30. Council rule, we will stick on -- stick to schedule. But unlike many roundtables, this will be on the record, which is why the -- why there's press here -- or, there's press here because it's on the record -- sorry, the other way around.

We are honored to have Boris Nemtsov here, one of, if not the leader within the democratic opposition in Russia. He is a former deputy prime minister under Prime Minister -- under President Yeltsin. He is a former deputy speaker for Parliament. He was minister of Energy. He was a governor inside Russia.

He ran for mayor of Sochi and Volsk, and perhaps he can get into a little bit of the dynamics of that election and the implications and what he was up against in terms of his Putin-backed opponent.

And I would say Mr. Nemtsov really has given more thought not only to what is going on on the ground in Russia right now, but also to the future of institution building, democratic institution building inside Russia and what the prospects are for that.

And obviously this is an especially important discussion in light of the fact that the Obama-Medvedev summit is around the corner in just a couple of weeks, and what are the implications of that discussion and that meeting. And we thought, obviously, that the timing of Mr. Nemtsov's visit here was especially important.

I will also say that I was just told about 10 years ago was the last time Boris Nemtsov was here at the Council in New York. And at the time, Mort Zuckerman did this job, which is hosting the roundtable and moderating the discussion. And it was a very interesting discussion, because it was just after a financial collapse -- (laughter). And Russia -- many people --

BORIS NEMTSOV: This is -- it's a good time for --

SENOR: -- yeah, so we figure about every 10 years you come back. We'll get a financial collapse set up; Russia will be in crisis.

NEMTSOV: (Laughs.)

SENOR: You know, ort and I could kind of sub-in/sub-out, and we'll have you come speak to the Council. So with that, thank you for being here, and I'll turn it over to you.

NEMTSOV: Thank you, Dan. I hope that nothing happen after today's discussions in Russia and, of course, in the United States. And it's really a great honor for me to be with you today.

I was invited to the United States like a representative of democratic opposition of Russia. Fortunately, we have democratic opposition, which is very good news from Russia.

Not long ago, we founded new united liberal democratic organization, which name is Solidarity. Solidarity was founded in December last year. Well, Gary Gasparin (ph), whom I met not long ago here, he's in New York City today. And not only Gary, but Vladimir Bukovsky, for example, the famous dissident who's in London. A lot of guys from human rights protectors side, a lot of young liberal democratic activists are involved in Solidarity.

Not long ago, Solidarity took part in the Sochi elections. I was a candidate for mayor not only because this is my hometown, but because I'm one of the leader of Solidarity and it was a real political campaign.

Of course, from New York City it's difficult to understand what does it mean, democracy in Russia. Today somebody asked me what do you think -- where is more democracy, in Iran or in Russia? Well, terrible question -- for Russians, but that's what we have.

My experience showed that, unfortunately, there is no election at all in my country. For example, as far as Sochi is concerned, it was organized by Putin directly from his side; organized -- (word inaudible) -- of sponsorship, including small newspapers in Sochi. Seedy -- a lot of black PR campaign, according to which I'm a South Korean spy because I'm against the winter Olympic Games in subtropical city -- because of corruption, of course. But Putin insisted that this is because I want to replace Olympic Games from Sochi to the South Korea.

Well, this movie was shown throughout the channels 100 times. Another movie that I destroyed Soviet Union, destroyed -- (inaudible) -- region, sell Russia to the Paris Club. Nobody knows why Paris Club, but Paris Club. Well, this movie was shown 100 times without any response. I have no -- even one second on TV, one second on radio stations, any sentence to the newspapers because everything was forbidden.

Well, Putin hooligans took part directly in this campaign -- (inaudible). And after that I got some money from New York City for my campaign, $5,000, which is strictly forbidden according Russian law. This is American money, like it's forbidden for Obama to take money from Russia.

But some guys from Brooklyn sent me this money -- (chuckles) -- and it was the reason why I have to be fired. But fortunately, my manager helped me and sent the money back.

But after that, he organized so-called elections; elections started two weeks before the day of election. Teachers, Kindergartens, everybody were seat to the bus, come to the poll station and vote; 37.5percent of voters voted before a day of elections.

We calculated separately the results. I got zero. Putin candidate got 100 percent. Well, on the day of election I got 23 percent, which is the best results for Democrats during the past 15 years; this is good. So I'm the second place after Putin candidate.

Putin himself was involved in campaign. He said that his candidate is the best mayor in the world. Candidate, unfortunately, doesn't speak fluent Russian. Well, and he didn't refuse to go on the election polls to vote because he is afraid of journalists who are waiting for him to ask him a question how is elections.

Well, anyway, I can tell you that it was very, very useful for us because we implement absolutely different from Putin ideas how to run cities, how to run regions and, finally, the country. How to avoid corruption, how to build real competitive economy, and how to support middle-class and small-leveraged businesses.

And we want to continue such kind of activity. We want to take part in the elections in the city of Moscow Duma. These elections will be in October this year.

Of course, we understand that this is special operations; this is not an election. But this is a chance to implement our own ideas.

Well, as far as Russian-American relationship is concerned, of course a lot of attention now is on this subject because of, first, Obama visit to Moscow. He'll be, at the beginning of July, in Moscow.

And Obama suggested very modern world not only in the States, but even in Russia. The world is resetting. And this is, I think, for PR for interview, this is really great PR. But we want to know what is concrete results after; we say, what does it mean?

Well, the President Obama said that democracy, human rights, freedom of speech, this is universal principle -- this is universal value, right? I don't think that he's right.

This is universal for the Western world, that's true. But for Putin, this is a real threat for his power. His main values are power, money and business. And I don't think that if Obama will not pay any attention to the fundamental things and his values at all, just talk about START I, START II treaty, maybe some talks about Iran and North Korea, et cetera, I don't think that this policy will be successful because if you have no common values, there is no confidence. If there is no confidence, it's impossible to find compromise.

Let me take into account, for example, the problem of antiballistic system in Europe, right? Putin believe that this system is against Russia -- not against Iran, but against Russia. And America insisted that this is against, of course, Iran.

Problem is not what is in -- (inaudible). The problem is absence of confidence. Absence of confidence comes from values. That's why to ignore problem of democracy, human rights, et cetera, means to fail, not in this visit but strategically, in long-term perspectives.

Well, another problem -- a real Russian problem, but problem with our relationship, is who'll run Russia, Medvedev or Putin. Russia, of course, is a country of secrets and mysteries. But this is the biggest mystery -- who is really the president and who is really the boss.

Traditionally, you know, person who control office in Kremlin run the country. It happened after Ivan the Terrible and Peter the Great, but not now. Not now. Formally, Medvedev is the president with huge power, according to the constitution. But in fact, power belongs to Putin, which is very unusual, very untraditional, but this is Russian reality.

This is against constitution. What is Obama -- he want to be an adviser; I don't know. What is my proposal?

First of all, if America is for rules of law, the only way is for Obama to connect with Medvedev, first of all, because Medvedev, according Russian constitution, is responsible for foreign policy; secondly, he is responsible for military policy; and he is responsible for defense policy. All of these topics are under his responsibility.

That's why if Obama spends a lot of time with Medvedev and half an hour with Putin, it will be great news. It will be great news for everybody, including domestic.

Second point, I know that they want to discuss about START I treaty, START II, which is good. And I'm sure that finally they will be successful, such kind of talks. But to avoid talking of absence of rules of law in the country, absence of elections, absence of political competition, I think that it will be mistake. Of course, to be like big brother who teach small brother Medvedev, I don't think that this is good strategy.

But Obama, he's a smart man and I'm sure that if he will say that, guys, Mr. Medvedev, you did great job. You proclaim an idea to fight corruption, for example. And my experience show that to fight corruption means to cancel censorship and to organize a real competition in politics, et cetera. It looks more effective, more friendly and, finally, more successful for our boss.

The main problem of Medvedev is not START I and START II. The main problem of Medvedev is not even antiballistic system in Europe, it's not even Iran and North Korea. The main problem of Medvedev is how to be the president. That's why if Obama will show that, yes, Russia has president and his name is Medvedev, it will be very, very nice for everybody. Well -- and I can tell you why for our Solidarity and why for our position this is important.

Medvedev has -- Medvedev is not Putin. He is different. He's young; he has no (solid ?) mentality. He's no -- he has no mentality of the Cold War of course, because he's just 44. He graduated the university when Gorbachev started Perestroika in 1985. He has no KGB experience, which is great, and he has experience in private sector, which is very important.

And I believe that -- if he will finally take power, we have a chance to come back to liberalization, to democratization or, I can say, Perestroika number two, or -- (inaudible) -- I don't know. Or Glasnost, whatever. Some -- there are lot of Russian words about that and international words.

Well, his main problem, unfortunately, is that he's weak. I don't know is it possible to become stronger just after a few meetings with Obama. I don't know. (Chuckles.) Well -- but if he will help him to take power, it will be very important strategically, because if you look at Obama background and his history and Medvedev, the new person, it's easier for new guys to start from the beginning, right?

Of course, everybody in Russia believes that everything depends on our country, just Ostap Bender believed that outsiders can help us. (Chuckles.) I don't. I don't think so. Well, that's why we have like an opposition to work hard and to do everything to come back to the rules of law and to the rights.

What is very important point, it was contract -- why Putin was so popular? It was a contract between -- of course, a visible contract -- between Putin and Russian society. I give you money, you give me your rights -- political rights, social rights. All of your rights, give me, please. I give you money.

This contract exist for a long time. Economic performance in Russia was great, was very excited. Russian economy grow up 7 percent of GDP and iincomes increase every year 10 percent.

But now, contract is over. Russia is in a very, very deep crisis. Economy, deep -- terrible. For example, in May, industrial index dropped down 17 percent. In April, 17 percent. GDP result minus 10 percent during last four months.

On the other hand, we have very expensive oil now. Oil price is $70 per barrel. When I was the minister of fuel and energy, oil price was 10 (dollars), and it was my dream to get finally 40 (dollars). Now, Putin has 70 (dollars), but economy is on the very bad track.

That's why I believe that he built so inefficient, so corrupt an economy that even 70 (dollars) is not enough to grow up once again. That's why contract is over, and this is a real opportunity for coming back to rules of law and to Russian constitution.

Of course, a lot of thing depends on how opposition will be, and the GDK opposition will be popular. That's why we are responsible for our future, not Obama. We are responsible.

Well, that's why I try to spend outside of the country not so much time, and this is a very rare visit to the States. I -- maybe one year, one time during two years I'm here -- and one time per 10 years I made a speech here.

Thank you.

SENOR: Thank you.

I'll start with a question. You mentioned Iran. The Russian government was, I think, one of, if not the first government to recognize the election results that were issued by the Iranian regime a little over a week ago.

Every time I speak to people or government officials in foreign countries, the discussion quickly moves to what do people in that particular country think of Obama? Do they love Obama? Are they suspicious of Obama? It's all about Obama.

And I guess I have a slightly different question. What is the perception inside Russia about what's going on in Iran, both among elites in the government and in the media as well as regular people you talk to? And if -- when President Obama shows up in Russia, there's one of many scenarios that may evolve --

NEMTSOV: Yes.

SENOR: -- or devolve, depending on how you look at it, by then. One is a total crackdown by the government, by the regime, and this reform cause, this movement, will have withered. Or it will still be alive and there'll be a continued major threat to the Islamic Republic in Iran. Or something in between.

But depending on how it plays out, how does it affect the Russian government's thinking about how it deals with Obama? How weak or strong does Obama look? And what is the general perception of what's going on? Are people paying attention to Iran and specifically how it impacts the U.S. government in its international power?

NEMTSOV: Well, let's divide the questions, right? First of all, ordinary people, ordinary people don't care about Iran at all. This is not a subject for Russian people. Forget about that.

Well, Putin, principle of Putin is very understandable -- enemy of my enemy is my friend. That's why he was very cautious concern in North Korea before, especially, North Korean stupid guy launch a missile without any understanding where this missile landed, right? When missile landed not far from Vladivostok, Putin think a little and recognize that maybe this is a problem for me.

I'm afraid that his position concerning Iran looks absolutely similar. Absolutely. While they are an enemy of the States, which is great, on the other hand, if they produce really strong missiles but not long-distance missiles, just for Russia border, maybe he will think that this is a danger for him too. That's why this is not strategy. This is like a policy -- (audio break) -- Ahmadinejad is an enemy of America, which is great.

SENOR: But that's the strategy -- I mean, you could argue that is a strategy -- to weaken the United States.

NEMTSOV: That's stupid strategy.

SENOR: I agree.

NEMTSOV: For example -- for example, terrorists are an enemy of America. What about Russia, who supports terrorism, right? But he doesn't want, because of Chechnya, because of Caucasus, because of some other reason. That's why he has no real general strategy. If he will say that everybody who is against the state is my friend, it's understandable. But he doesn't.

Second point, I know how to change his mind. He is -- his values are business, money and power, right? This is definition. This is Putin. Well, how to attract his attention to Iran and nuclear problems? To suggest Ahmadinejad to build gas pipeline system to Europe, to be involved in Nabucco, for example, which is not a bad idea.

I was in London not long ago. And I asked -- (inaudible) -- guys, "Guys, did you buy Iran oil?" Their response, "Of course." "Why don't you want to buy Iran's gas? What's the difference? You want to build Nabucco in Turkmenistan, Azerbaijan, South Caspian area; take gas from Iran. Iran is the second producer of gas in the world. Why don't you want?"

That is a good question. But this question is very important for nuclear problem because when Putin recognized that Ahmadinejad is a real competitive guy in terms of gas supplying of Europe, it will be easier to explain to him that this is an enemy -- much easier. This is business. Of course this is not the understanding of American White House. I think that they think in a different way. But if you want to know how he's thinking about it, that's the point.

Well, Russians, I think that elite -- I mean business community -- they understand everything. Of course, they understand everything. They understand a threat, they understand unpredictability, Islamic fundamentalism, et cetera. They understand. But who cares? They have no opportunity to argue about that because there is no even discussion on the topic.

There is no even talks about what will be our position concerning Iran. In the past, it was a discussion concerning North Korea. I was on TV, like program in -- (inaudible). We discussed, of course, my call with Zhirinovsky. Do we support North Korea or will be against? Of course you understand what was my position, what was position of Zhirinovsky, right? It was in the past.

Now I'm on the -- (inaudible). Zhirinovsky is not. But topic is under discussion -- is off of discussion. It's impossible to discuss that. That's why he can make any decisions he wants. I don't think that he trust Ahmadinejad -- I don't think so -- but he uses him. He plays, right? He believes that he is so strong that he can play, and finally everything is under control, which is not right. And North Korean example is very important.

SENOR: I'll open it up for questions. Yes?

QUESTIONER: (Off mike.)

SENOR: Yeah, please say your name before you -- you did? Nona (ph), you did? That was one thing I was supposed to mention also at the beginning.

NEMTSOV: Yeah, yeah, yeah.

QUESTIONER: (Off mike.)

NEMTSOV: What?

QUESTIONER: Some might consider -- (off mike).

NEMTSOV: Sent who? I don't hear you.

QUESTIONER: Should I stand up?

NEMTSOV: Yeah.

SENOR: Sure.

QUESTIONER: Kyrgyzstan -- (off mike).

SENOR: Kyrgyzstan.

NEMTSOV: Turkmenistan.

SENOR: Kyrgyzstan. Kyrgyzstan.

NEMTSOV: Ah, they replaced the --

(Cross talk.)

QUESTIONER: Right, but it was an argument that -- (off mike) -- Kremlin, who was winning the argument about the -- I won't start again. Anyway, this week's events suggest that the U.S. has kind of won at least the first part of the poker game over -- in Central Asia against the Kremlin, against whose influence matters in Eurasia.

And my question is, if you had a few moments to spend in July with President Obama, what other things would you be saying to him and what recommendations would you make about American policy towards Russia right now? Should we be more aggressive, more bargaining, or should we back down and not worry about seeing the soul of the new president, as we did mistakenly four years ago -- eight years?

NEMTSOV: Well, frankly, Afghanistan problem is more important for Russia than for America. Talibs are very close to our border, right? Secondly, drugs, disintegration, everything.

That's why in our interest to solve Afghanistan problem -- in our interest, not in American interests, in our interest -- I know that they're so disappointed about American base in Kyrgyzstan, but nobody knows why. They believe that Americans will be forever in Kyrgyzstan and to control middle Asian area forever. That's why they press Kyrgyzstan president to consult talks, right?

Moreover, Kyrgyzstan now is in a very deep crisis and Putin promised and gave him money. We have a budget deficit of $100 billion in my country, but to forget about American troops in Kyrgyzia Putin found some money and gave him. He didn't even give money to his friend Lukeshenko, but to find money for Kyrgyzia, right, which is absolutely crazy, which is against our interests.

That's why I believe that the best way for Obama is to explain, for example, when it will be deadline for Americans based in this area. I'm not sure that America is interested forever to have troops in this area, right?

And this is real -- in the common interests of the U.S. and Russia, to explain not Putin, because of course his main strategy is anti-American strategy. He believes that anti-American rhetorics are very popular in the country, and to -- you know, to win in the fight with America, even in Kyrgyzia. This is new, additional support from Russian people, without any explanation why, right? This is his mind. This is Soviet -- this is sabok (ph), right? This is sabok.

Medvedev looks better, it seems to me. He's weak but he looks better. Well, I think that if, you know, explain to him what's the purpose of American troops, what's the deadline for them, and how they will be ready to operate together with Russians, which is good, together, because this is our common interest, I think that it will be great.

SENOR: Yes?

QUESTIONER: Hi. Esther Dyson. There is going to be a little micro summit of NGOs around the Obama and Medvedev summit. Do you think that matters? What would be less constructive for them to do or focus on?

NEMTSOV: Well, as far as I know, he cancelled this meeting. Did you know that?

QUESTIONER: No --

SENOR: Who cancelled the meeting?

QUESTIONER: -- I mean, the summit will happen anyway.

NEMTSOV: Obama administration. They decided to cancel a meeting with NGO representative in Moscow.

QUESTIONER: The NGOs will still be there.

NEMTSOV: Really? So it will be a meeting?

SENOR: Yeah, but you're saying that Obama won't be there but Esther's saying that the meeting is going to happen regardless.

QUESTIONER: Yes.

NEMTSOV: Of course it will be very useful to meet with independent persons, including human rights protectors, including opposition -- democratic opposition, labor opposition, including some independent scientists -- I mean, economists, et cetera.

And now, as far as I understand, fighting on the preparation is what kind of meeting will be organized? For example, of course Putin will be excited if he will meet with Zhirinovsky, with Zyuganov and with Mironov, right, who is under 100 percent of Putin control, and his money, it will be great success of Putin. If he will meet with -- excuse me, with me, Kasparov and somebody else, it will be really strong pressure against him. That's why today is a day of very big fighting about that.

Well -- and his speech, he wants to speak not far from the Red Square in Gostina Dvork (ph). Do you know this area? This is very new, fascinating building with about 1,000 feet, and it will be great and symbolic that that's very close to mausoleum, right? Well, if he'll make a great statement that will be very nice.

Well, I don't know -- I don't know what is his strategy. My opinion is very clear. If the White House agreed with Putin proposal to talk just with pro-Putin organizations -- nevertheless, what is their name? NGO, opposition -- everything is understandable, right? It will be a victory of Putin but not only. Putin will be sure that Obama is weak. He is weak. If you press him, he agrees, he's weak. That's it.

If you didn't mention about general values, universal values, it seems for Putin that he's weak. If he said that, yes, we have terrible relationship during the Bush time; you know, it was disaster in our relationship, et cetera, we apologize about it, we want to change it, et cetera, he is weak. He's weak.

I'll explain why. Because he's understanding Putin. He's not politician from the White House, right? He is from the street with criminal mentality. If you don't want to talk about -- switch topics, it means that you are weak.

QUESTIONER: Are you going to Washington?

NEMTSOV: Tomorrow?

SENOR: Tonight.

NEMTSOV: Good? Do you think so? Okay.

SENOR: He has some big meetings in Washington.

Yes, sir?

QUESTIONER: Hi. My name is Ron Tiersky. I'd like to know -- I'd like to ask you to talk a little bit about what Putin and Medvedev think about Europe. What does -- meaning the European Union area -- meaning the big countries, Germany, France, Britain -- what do they want from Europe? Do they think that the friend of my friend is necessarily my enemy? Do they think they can kind of play one country against another? How would you analyze that?

NEMTSOV: First of all, Putin has a very strong lobby in Europe. The biggest lobby is Berlusconi -- Berlusconi. He likes Berlusconi. They look very similar. I can tell you that Berlusconi is a Putin-lite. I was Milan not long ago. My book was translated in Italy. And Italian journalist asked me in Italy. He goes, why do you think why Putin spends so much time in dacha of Berlusconi in Sardina? Why his daughters always spend so many time with Berlusconi?

Because they look very similar. Berlusconi controls five channels among six in Italy. Putin controls 100 percent. That's why Berlusconi wants to repeat success, right? Berlusconi wants to destroy opposition. Putin has already done. Berlusconi is a rich man; Putin I believe is even more than Berlusconi, but problem is that Berlusconi is a legal multi-millionaire; Putin is not. That's a very sad story for him. Legalization of money is one of the most important questions, of course. Well, that's why -- and Berlusconi always helps him in all of his protection.

The next problem with Europe is "Schroederization" -- "Schroederization." It means privatization of European politicians. (Laughter.) Well, Schroeder was privatized by Putin for very cheap money. He's the chairman of Nord Stream board. Do you know Nord Stream? Well, Putin paid him very little money in terms of Moscow salaries. But Schroeder is a real advocate of Putin and very supportive of him -- not only Schroeder. The former prime minister of Finland, he's involved too. Schroederization is a problem.

Third problem, absence of general policy about Russia at all in Europe. There is no policy at all. For example, there is position of Baltic States, of Poland, of Czech Republic, of Eastern European countries. Of even Bulgaria there is a position. Quite critical, right? And there is position of Berlusconi and even Germany.

The U.K. -- the U.K is the personal enemy of Putin, like the state. This country, you are an enemy like superpower -- congratulations -- but not personal; nothing personal. The U.K. is a real personal enemy. Why? Because there is no extradition of Berezovsky. It was a case concerning Lithuanian gas. A lot of Yukos guys are still in London -- (audio break) -- any extradites. And a lot of his personal enemies now are in London and he believes that the U.K. protected his enemy specially. This is the policy.

When Tony Blair tried to -- when he was prime minister he tried to explain to Putin that, I don't like Berezovsky, but I have no responsibility to send him to Kremlin because this is court decision. He had -- Tony told me about this story, right. And he said, well, can you call to the court? (Laughter.) Tony was shocked and after that he said, yes, I can, and immediately I will be in jail -- immediately, next second. He said, relax, Tony. I understand. You don't want to help me. (Laughter.) That's it.

That's why the U.K., nevertheless, what is the power inside of this country -- labors, consortiums, even liberals; it doesn't matter. This is an enemy; serious enemy. Well, Brussels, like the EU, right, are in a deep crisis -- no problems and no ideas concerning Russia at all.

For example, Nord Stream. Frankly, this is fraud. Nord Stream is fraud. Why? First of all because there is no gas. Of course, I'm like a former minister of energy. I can tell you, there is no gas in Russia. That's why they can build it. Of course it can build with environmental problems, et cetera, but they can build, but no gas.

Why? They didn't invest enough money to a new gas field. That's why they can build, but what's happened next? South Stream, the same story. He said that I want to avoid Ukraine, like transition country. Good news. Look at the result.

South Stream is -- capacity of South Stream the best capacity. It will be 60 billion cubic meters, right? Through Ukraine we export about 150 billion (cubic meters). Even all of the gas comes through South Stream. We will still continue to use Ukraine. That's why this is crazy, absolutely, and very expensive.

Price for pipeline, it's about EUR15 billion. They talked about South Stream that it will be cheaper, but this is tricky point. It will be very expensive. Moreover, we have to use Turkish area and Turkey is not ready to do everything free. That's why it will be very expensive for us.

Well, but this is his business. He is the boss of Gazprom. This is his main, you know, cash machine and this is his business really. Well, that's why of course he won't say it. Of course the war with Ukraine -- I mean, a gas war -- Belarus, et cetera. He used to press Germany, to press Italy, to press France to agree with the idea that we have to build something around.

Well, but absence of common policy, absence of common interests in the European area, that's what he used to split decisions, tried to talk separately with everybody and tried to find some interest in business.

Why Berlusconi is a friend? Because he is a businessman. It's easy to talk with him. I give you gas, you give me loyalty. That's it.

SENOR: Ed, go ahead.

QUESTIONER: Ed Cox. China and Russia have some very basic issues between them. Russia is concerned about the number of Chinese in the Far East. China still feels that Russia occupies territory that belongs to China, but these issues really aren't in the forefront at this point, but they're still there.

If you go back to the Yukos affair it seemed like the -- part of that had to do with the pipeline going to China and Putin won't have to go to Japan instead. You have the Shanghai Cooperation group, of course, that -- (inaudible).

NEMTSOV: Yes.

SENOR: Could you discuss the relationship between Russia and China and are there basic issues underlying there that will prevent them from really getting as close as they seem to be now?

NEMTSOV: Well, first of all, his policy concerning China I can describe. This is absolutely pro-Chinese policy -- pro-Chinese. For example, a problem of islands and territory in the border, right? In Amur River. He presented our islands to Chinese government not long ago, including one of the big reaches a part of Khabarovsk City. Now, Chinese decided to build city, Chinese city, with population 2 million of people -- 2 million in this island.

Well, a total population of Khabarovsk Krai is 1 million. But he presented these islands -- not only this island -- some territory in the Primorsky Krai, some territory area in the Moscow region, et cetera. As far as, for example, South Koreans are concerned, of course, this is great scandal. Japanese forget never -- you know, this is the result of the Second World War, blah, blah, blah.

But Chinese he gave them. Next point, he organized journey and exercises -- military exercises with China -- Chinese army. For example, a few years ago, it was such exercises in -- (inaudible). For the first time in the history after Demanski, after illegal immigration, after everything, at that point he sell weapons to China including submarines, aircraft, ships and technology -- about $3 billion per year.

General Tonowa (ph) military exported seven, China, three -- well, problems. You mentioned absolutely right. Immigration plus strong reading of Chinese government to take control on the oil and gas fields. Immigration -- what we have? We have 20 million of people far from euros up to -- (inaudible) -- right? Just 20 meters. On the other side of the border, we have 1 billion and 500 million.

Border is not under control from Russian army. It was terrible agreement which he signed with Chinese government that Russia organized 200-mile zone out of Russian army -- 200-mile zone. You know, Chinese -- and Chinese did the same. They come to this area, 200 miles from the border. Russians come to 200 miles from our border.

But what we have in our area? Tiger and tundra, right? And nothing. What we have on Chinese side? Millions of people everywhere. That's why when he agreed to sign this treaty it's absolutely against Russian interests. We have no border with China. We have no border. That's why immigration is a problem and depopulation. His last decision concerning, for example, increasing of tariffs for cars, right? You know what's the main result? Population of the -- (inaudible) -- has disappeared because main business for people there is -- was reselling of second-class cars.

They lost 150,000 jobs immediately after this stupid decision, and he insisted to buy Zhiguli in Vladivostok. Do you know that Vladivostok people want to send him Zhiguli and ask let -- use it yourself, first of all, to show us how to do it. Well, that's why he proceed terrible policy in -- (inaudible). We have no technology. We have no jobs. We have no people. We have militarized zone in the border. We sell weapons. We have a disaster.

But why he proceed this policy? Because China is a real enemy of the state. Real. In Russian general establishment there are a lot of guys who understand a threat from China but their voices are not listening, just maybe marginal discussion, right, in some newspapers, some magazines, et cetera. Not openly.

This topic is strictly forbidden on TV. This is top Russian secret. Censorship 100 percent about military opportunity, about China -- Chinese interests in Russia, et cetera. Nobody cares. I just ask one question to Putin. Let you give me one example when the United States fight against Russia. In the history of the United States and Russia, maybe we are not friends but let you give me one example when the U.S. occupied Russia to destroy Russia, et cetera. We have opposite examples, and at your civil -- the First World War, the Second World War we were together. The war against terror in Bush time, we were together. Let you give me example of China-Russian relationship. No answer. This is now -- this is Soviet. The main enemy is here, New York City. That's it. It's impossible to explain. I don't know how to explain.

SENOR: Go ahead.

QUESTIONER: (Off mike.) I wonder if you -- what you think the attitude of Putin or the regime is toward the attraction of foreign direct investment in Russia. Does he -- does he care about the stock market, transparency and corporate governance and things that attract investors in other countries?

NEMTSOV: Frankly, they don't care. They say that we have unlimited amount of oil money and the only problem how to protect, how to avoid capital flight from the country. Moreover, they have absolutely understandable policy to establish control in energy sector. For example, scandal in Sakhalin II project where Shell was involved or a scandal with BP gas field in -- (inaudible) -- field, you know. And, of course Yukos example consortium by his friend Sechin -- I mean, Rosneft. Well, all of these examples show that he doesn't want to give an opportunity to -- (inaudible). It's impossible, except maybe Sakhalin II, which is very successful. Well, moreover, decision concerning Gazprom including Shtokman field it's very limited. It's very limited to organized investment.

As far as high tech is concerned, nobody is interested. You know, unfortunately, Russia looks like banana republic, especially after 10 years. Russia depends -- strictly depends on commodities. That's why the international business community looks at Russia not like a country with high tech, with new opportunities, but like for the country with fuel and energy.

But fuel and energy is limited because Putin wants to control everything. That's why I don't think that -- he adopted terrible law concerning foreign investment. He gave personal permission for foreign investment, transparency based mainly on the court system. Court is destroyed. Court is under the control of Kremlin.

Well -- do you know the story with Browder (sp), the biggest investor, Browder (sp). You know, he -- let's invite him here. It will be great. You know, it was the biggest investment fund in Russia. After that, Putin stopped his visa because he organized scandal about corruption inside Gazprom and -- (inaudible) -- gas. After that they steal his companies and steal his money.

That's why they are not interested in that. He's a businessman. He looks at the business community like a enemy and competitive looks, right? Well educated, very aggressive, with high-tech, with mind, with brain, et cetera. And he's KGB colonel, right? How to win in this competition. He's a businessman -- (inaudible).

QUESTIONER: But if he's a businessman, coming back, is that part -- by the way, on Iran do you think that's part of his motivation on Iran? It's not just the enemy of my enemy is my friend but also --

NEMTSOV: Well, that's a --

QUESTIONER: -- managing the Iranian government --

(Cross talk.)

NEMTSOV: No, no. That's why -- that's why I mentioned that you have to talk about gas with Iran. If you stop to talk about gas with Iran it will be much easier to talk about nuclear with Putin.

SENOR: Yes. Go ahead.

QUESTIONER: Follow-up on the NBI -- (off mike).

NEMTSOV: Russian what?

SENOR: World Trade Organization.

NEMTSOV: Mm hmm.

(Cross talk.)

QUESTIONER: Putin announced just after the St. Petersburg Economic Forum where there were a number of Russian officials who lent their support to Russia's accession to WTO, then three days later Putin announced that Russia would be withdrawing its application in favor of a bloc application from the --

NEMTSOV: With friends like Lukashenko, yeah.

QUESTIONER: Yes.

NEMTSOV: I know, yeah.

QUESTIONER: Yes. Why would he do that? Is he answering to a domestic audience there? Is he --

NEMTSOV: First -- yeah. First of all, this is disaster. This is disaster. Russia talked about WTO 16 years. We had an agreement with more than 100 countries. It was in the economic interest of Russia to organize more transparency, competition, et cetera. He didn't talk about that with anybody around including Nabiullina, minister of economy -- with nobody.

He made his own decision and this is not a decision to go with Lukashenko and another buyer together. This is a decision canceling talks because everybody understand that to come together with Lukashenko, you know, together is like -- another guy -- (inaudible) -- to WTO, et cetera. This is absolutely impossible. That's why this is canceled (ph).

But this is great mistake. This is against Russian interests. This is out of discussion in the country openly. It's impossible to discuss this topic. Well, my explanation he is afraid of competition. He's got his monopoly. He understands that if Russia finally joined WTO competition will increase everywhere -- in banking sector, machinery, energy, everywhere. And he's positioned like businessman. It will be denied.

Second, Russia is in a very big suffering because of crisis. He is afraid. More bigger than in the West, of course. That's why he's afraid that Russia will be weak and strong American companies buy Russia and take control of the country. This is KGB understanding. I would -- (iInaudible) -- KGB understanding. That is -- it's really -- everybody, even absolutely loyal -- not me, me, so -- it's clear. It's even -- (inaudible) -- who's 100 percent loyal to Putin, he was completely disappointed about that. Great, completely -- everybody was shocked. You know, here we have a man who has unlimited power and is so much impossible to talk, to argue, et cetera. Finally, he becomes a little bit (mad ?), right? That's what we have.

SENOR: Go ahead.

QUESTIONER: This has been a very enjoyable and amusing evening but incredibly depressing. So I'm wondering --

NEMTSOV: You think so?

QUESTIONER: Yes. So --

NEMTSOV: This is Russia, you know. What --

QUESTIONER: Yes, I understand. But, you know, either you should emigrate or you should tell us what you're planning to do --

SENOR: There we go.

QUESTIONER: -- to try and make it better.

NEMTSOV: What is my plan?

SENOR: What is your plan?

QUESTIONER: What are you -- what are you up to? What --

NEMTSOV: Tonight I will be in Washington, I hope. Well, on Sunday I will be in Moscow.

SENOR: Why don't you talk about the -- why don't you talk about the Moscow elections in 2011 and then --

NEMTSOV: Well, I understand. I understand. Well, first of all, we will -- on the preparation to the Moscow Duma elections. After that we will think about other regional elections. I'll prepare now my next book, which name is "Putin and Crisis: Chapter Number Two."

We describe his underground relationship with (oil gas ?), how he help his loyal (oil gas ?) during the crisis and how did he destroy business and Gazprom, et cetera. Well, as far as elections long term, I mean, parliamental and presidential, first of all, there is no election in the country at all. If we are in the black list and if it's completely impossible to take TV to explain (even for money ?), right, how to run, that's impossible. That's why our strategy is elections on the local regional level, municipal level, and liberal educational programs for everybody around and try to -- (inaudible) -- a connection with trade unions to protect labor rights of people because unemployment is the most important question now, and try to establish not only in the big cities our organization but in small ones.

Frankly, small cities are under very great pressure of the crisis. So-called (mourner ?) towns like Pika -- (inaudible) -- for example, where people block roads and Putin immediately came and gave everybody money to (press ?). (Inaudible) -- got to sign contract with -- (inaudible) -- PR -- (inaudible) -- was destroyed, signed contract which was himself prepared. Well, this is PR to an extent but anyway we have (twenties ?) of Pikalils (ph) from my estimation, and, of course, we have to be in these cities and these towns to help people.

Well, you know, Russian opposition is in a very, very, first of all, dangerous situation, and secondly, we have to think about long-term fighting. This is marathon. That's why you have to be in a good shape. You have to go to the fitness -- well, you have to fight, et cetera, et cetera. If you are in Kremlin you can relax. But outside you have to be in a good shape.

SENOR: We'll take one more question, someone who hasn't asked. Did you -- go ahead?

QUESTIONER: Thank you. Irene Meister (ph). We had seminal times, I guess, twice as a Council a representative of another opposition group. At that time it was called Yabloko. Is it still in operation? Do you cooperate with other groups that are also opposed to --

NEMTSOV: Well, that's right.

QUESTIONER: -- what is happening on that? We don't hear very much.

NEMTSOV: Well, first of all, solidarity is a movement where Yabloko representatives have a lot of seats. For example, a leader used Yabloko, Mr. Yeshin -- he's a member of Solidarity -- a leader of St. Peter work Yabloko. Macshim Resnik (ph) -- he's a member of Solidarity. Twelve original Yabloko organization are a member of Solidarity. Of course, Yulinski (ph) is not. It will be surprising for everybody including New York City if he will -- (inaudible). Well, but I don't think that it's so important for us now. Solidarity is in a position where -- (inaudible) -- guys, the Yabloko guys, Bukowski, you know -- (inaudible) -- of some NGO representative -- (inaudible) -- which is great. And a lot of very young person.

If you look at the council of Solidarity, we have 39 members. Twenty of them are younger than 30. I was very afraid that liberty is important just for my age persons. I was wrong. A lot of young guys -- like my oldest daughter -- she's very much involved and interested in that. And this is a real hope. This is a real hope.

SENOR: Well, Boris, thank you for a albeit depressing but also illuminating --

NEMTSOV: Do you really believe that it was depressing?

SENOR: Yeah.

NEMTSOV: I'll explain you why, because my English is not my Russian. If I will speak Russian you will be very --

(Cross talk.)

SENOR: Maybe you'll be back here -- maybe you'll be back here in another 10 years and only then you'll be serving your second term as president of Russia and, you know, Esther will be more inspired.

NEMTSOV: In 10 years, yeah. You are -- you know, you're a optimist.

SENOR: That's right. (Laughter.) Thank you everybody -- (applause) -- and we're going to -- we're going to -- okay. Russian TV is here. I'm saying in his second term of president. I'm making -- I'm making some news.

NEMTSOV: This is -- this is Russian TV for America.

SENOR: Oh, okay.

NEMTSOV: This is free press.

SENOR: Well, we're going to have a little reception here so Boris will stick around. If some of you didn't get a chance to ask your question you'll have a opportunity to do so informally.

NEMTSOV: And thanks a lot.

SENOR: Thank you. My pleasure. Thank you.

NEMTSOV: Thank you very much.

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