"Does Russia Need the West?"

"Does Russia Need the West?" William J. Burns, U.S. Ambassador to Russia Moscow, May 30, 2006 Thank you for inviting me to speak at this very timely conference. This is a moment of considerable frustration and doubt about the relationship between Russia and the United States. You can hear it and feel it every day in both our capitals. From the American side, there are concerns about over-centralization of power here and about Russian behavior toward some of its neighbors. From the Russian side, there are concerns that Americans do not understand how difficult the last 15 years have been for Russia; that Americans are too quick to criticize and lecture; and that Americans are fundamentally uncomfortable with the re-emergence of a strong Russia and determined to constrain it.

It is important to address all those concerns directly. A great deal is at stake -- for Russia, for America, and for the international community. I am not naive. I understand that we sometimes have real differences that cannot be wished away, and that there will be elements of competition as well as cooperation in our relationship. But I am convinced -- firmly convinced -- that we all have a great deal to lose if we lose perspective, if we lose sight of what we have to gain by working together. We all need to take a step back and consider where we've been, and where we're headed.

I'll make only three or four brief points. First, let me stress at the outset that -- contrary to the impression we like to convey -- Americans do not have all the answers. We are often impatient, occasionally preachy, and -- yes -- we sometimes make mistakes. I am often reminded of Winston Churchill's famous comment that "the thing I like most about Americans is that they always do the right thing in the end -- they just like to exhaust all the alternatives first."

What Americans can offer is not a monopoly on wisdom, but the benefit of our own experience, and the strength of our conviction that open economic and political systems are the best way to realize the full potential of any society. We do not pretend to have all the solutions, but we can help others who want to chart their own paths toward modern economic and political institutions.

That leads me to my second point. Russia has come a long way in the last decade, especially in rebuilding its economy. Russians themselves have done the hard work, but there is no doubt in my mind that interaction with the West, cooperation between our NGO's, and integration into global economic institutions have been an important ingredient. Russia's opening to the world was a process set in motion by the vision and courage of Mikhail Sergeyevich Gorbachev, with whom I am honored to share the podium today. It has not been easy. I remember how difficult it was for many people in this country to make ends meet when I first lived and worked here more than a decade ago.

But the United States has been proud to help, and so has Europe. There are many examples, across a wide spectrum of activities. Thousands of young Russians have participated in exchange programs, and then put their experiences to good use in building businesses in Russia. NGO's and medical professionals and government officials have learned from their American counterparts about how we have fought the problem of HIV-AIDS -- learned from both our successes and our mistakes. Through NGO's and government cooperation programs, we have also helped Russians make dramatic progress in reproductive health care, reducing maternal death rates and abortions, and tackling at least one part of the problem of demographic decline.

I travel widely outside Moscow, and I am constantly impressed by the efforts of Russia's own NGO and civil society groups to improve life and expand opportunities for Russians, from programs for the disabled sponsored by Desnitsa and Perspektiva in Nizhny Novgorod, to the work of Soldiers Brotherhood in Novosibirsk to assure affordable housing for veterans.

No description of our cooperation can be complete without mention of some truly visionary government-to-government programs like Nunn-Lugar. After Beslan and September 11, no one can doubt that if terrorists could get their hands on nuclear or other WMD materials, they would use them. Our cooperation has helped secure nuclear material in Russia, and strengthened the security of both our countries.

I do not mean to suggest that every cooperative program or piece of advice that we've offered over the last 15 years has been a success. All of you know better than I do that that's not always been true. But on balance, it seems to me that interaction with the West and integration into global institutions has been part of the reason that Russia has come as far as it has. And now my third point: I am equally convinced that such cooperation will help both of us in the years ahead.

There are broad areas of common ground between us, which matter not only to the United States and Russia, but to the interests of the whole world. Nuclear energy is an obvious example. Working together, we can make rapid advances in civilian nuclear technology -- and, just as importantly, help limit the dangers of the proliferation of nuclear weapons. No two countries in the world have a greater historical responsibility, or greater capacity to lead in this area, than the United States and Russia. Whether on North Korea or Iran, we have far more to gain by collaboration than competition.

Our diplomats are working productively together on many issues, from our efforts in the Middle East through the Quartet, to renewed efforts at conflict resolution in Nagorno-Karabakh. A bilateral agreement on Russia's accession to the World Trade Organization, which I believe is very close, will open the door to even more rapid growth of trade and investment between us. On wider energy issues, it's perfectly logical to build partnerships -- given the reality that Russia is today the world's largest producer of hydrocarbons, and the U.S. is the biggest consumer.

Another huge challenge before Russia today is how best to develop a resource even greater than its oil and gas: the immense potential of its well-educated and resourceful citizens. Interaction between us can help in important ways. Already, Boeing employs 1300 superb Russian engineers and designers in Moscow, in programs which benefit us both. Intel has similar programs in software development in Russia. They have only scratched the surface of what's possible.

It is certainly true that dealing seriously with problems in the educational and health care systems is also a part of the answer, as outlined in President Putin's national priority projects. NGO's can play an important role in that national campaign, and they can benefit from foreign experience and support. In some areas, our cooperation ought to become more of a two-way street; we've started a program, for example, in which we exchange secondary school teachers in math and science -- fields in which Americans have a lot to learn from the Russian experience.

It is also true that problems like corruption and piracy of intellectual property must be tackled -- in Russia's self-interest, not as a favor to the U.S. or the WTO or anyone else. These steps in turn require strong, modern economic and political institutions. I say that not as yet another illustration of American preaching, but as a very practical matter. How can you tackle corruption effectively without an independent media and judicial system? How do you protect Russia's own intellectual capital without firm measures against piracy? How will Russia safeguard its stability and prosperity, and profoundly important trends like the emergence of a middle class, without respect for the rule of law? How will it take full advantage of all its resources -- human as well as natural -- without constructive interaction with the West and other parts of the world, and continued integration into the global economy?

My last point is simply that Russia and the United States, Russia and the West, need each other. That doesn't mean that we won't have differences. Sometimes, we will. We must deal with them honestly, and plainly. But it would truly be foolish -- for both of use -- to lose sight of what we have to gain by working together.

I have spent most of my diplomatic career in the Middle East and Russia. Strangely enough, I remain an optimist. Whenever I say that, my friends here remind me of the Russian definition of an optimist: someone who thinks tomorrow will be better than the day after. I mean something a little different. Tomorrow will no doubt have its share of complications for Russia and the United States. But there can also be no doubt that it is well worth the effort, for both of us, to work through those challenges and build a strong and enduring relationship. The truth is, we need each other.

I know some guys who have done a lot of refinery business in Russia. Outside the major cities, the country is still decades behind the US. No one wants to go to the interior on business.

Russia is using its oil reserves faster than any country in the world. They export on one side and import on the other. They have depleted their oil reserves to keep oil revenues up. Putin's coup over the oil industry has left it diminished.

Commie goons seizing assets from businessmen. Same as it ever was.

Commie goons seizing assets from businessmen. Same as it ever was.

You are so right. Russia -- whether Imperial or Communist -- has had a long history of this. This is b/c since time immortal Russia has been an autocracy, or, more correctly, a "patriarchal" which means, in a nutshell, the Tsar (or "The Party" in the case of the USSR) owns Russia. Period.

It is his patrimony. It is his.It is his estate and everything and everyone on it is his to do with whatever he wants, in theory.

Economically speaking this mean that the Russian who, let's say, built a better mouse trap does not own -- materially or intellectually -- that mouse trap, the Tsar does. You are his subject, his serf. To build that mousetrap you used wood from his forest(s), metal from his mines, your workshop --built, by the way, from the wood from his forest and stone from his quarry -- is on his land, etc. And as long as you keep your mouse-trap business (very)small you stand a good chance of slipping under the radar, so to speak. But, should your mouse-trap business take off, and it does come to the attention of the Tsar and/or his bureaucrats...Well, you may very likely find yourself ordered to relocate to Moscow (or where ever), set up and manage the Imperial Better Mouse-Trap factory. You are not longer the owner/inventor. You are now a employee.

Same sort of thing happened under the communist. Different singers, different pitch, same song. So you are right when you say "...goons seizing assets from businessmen. Same as it ever was."

It is ironic that in its attempts to become free, Russia has become exactly what Stalin warned against - a corrupt kleptocratic society where the ultra rich oligarchs have all of the money and the proletariat workers are left to suffer.

Unfortunately many Russians see it too. That's one of the reasons Putin's people try to paint him as the Great Leader and their champion against the oligarchs, even though he does it solely to benefit the oligarchs in his corner.

It is sad, but Russia is a dying country. Expect things to get a lot, lot worse.

If you will take a moment to read my previous post you will understand that the Russians,like the Chinese, have never been a "free people".

And this corrupt kleptocratacy ("nomenklatura") that you say Stalin warned about was, in fact, tenderly nurtured during his rein.

The nomenklatura were upper-middle and upper-upper Party Officials and bureaucrats, first came into being under Lenin and swiftly became were the new aristrocracy -- there's no other word for it. It was hereditary, it was all powerful, it lasted till it was privileged beyond anything we've ever known in America.

"In the words of a member of that elite:

'...the nomenklature is on another planet. It's Mars. It's not simply a
matter of good cars or apartments. It's the continuous satisfaction
of your own whims, the way an army of boot-lickers allows
you to work painlessly for hours. All the little apparatchiks are
ready to do everything for you. Your every little wish is fulfilled.You
can go to the theater on a whim, you can fly to Japan from you
hunting lodge. It's a life in which everything flows easily...You
are like a king: just point your finger and it is done.'
-------------
Richard Pipes, "Communism, page 86.

Knowing the nomenklatura -- nearly one million strong, plus their family members -- had the power to stall, pervert, reverse, or even derail any and all reforms Gorbachev,Yeltsen, and Putin bought off this class by allowing them (the nomenklatura) to,er, "appropriate" state property. So as you can see this "corrupt kleptocratic society" began and ended with the Communist.

No, Russia has never been free. However in the 90's it certainly attempted to become free. Unfortunaetly, the economic "reforms" that Yeltsin put into action guaranteed the decent into what we have today.

As for corruption in the Communist Party, I suppose there was some early on. However during the early Lenin years and all of Stalin's years people were far more concerned with not getting purged. The real corruption didn't start until Brezhnev tried his hand at economic "reforms."

Regarding the oligarchs of the post Soviet era, sure some were members of the Party (unsurprising as anyone of consequence was a member), but few if any were members of consequence.

Take Boris Berezovsky, Russia's first billionaire for example. This Jewish man had nothing to do with politics until long after the Soviet collapse (which didn't last long as he didn't like Putin and paid the price for his dislike).

Other examples like Mikhail Friedman who gained wealth through as a successful black marketeer in the waning days of the Soviet Union, Vladimir Gusinsky a taxi driver and stage director, or Alexander Smolensky who worked closely with the samizdat.

Of course there are a few oligarchs who were important in the party, the most famous of which Mikhail Khodorkovsky ran the Kommosol. However being part of the nomenklatura was hardly a prerequisite for most of those men who would rise to oligarch status. Indeed some of the most successful (some of whom I mentioned above) weren't even apparatchiks, let alone nomenklatura in the party.

That's not even close to the truth.

If we discuss the time of the Empire, there was a freedom to run a business for everyone, but with certain feudal restrictions.

Lords could certainly tell their serfs what to do, but they weren't interested in ruining a serf's business, if any, this would have meant a decrease in profits. Secondly, the government had nothing to do with this kind of relationships.

Other people (except serfs) could start and run whatever business. Succussful to a certain degree ones were to register as merchants, declaring certain size of capital - that was a fiscal issue.

During Soviet times nobody could have a business: that was a criminal offence, whether is was small or large. Any enterprise belonged to the government. But, of course, the Soviet government seized all private businesses during the revolutionary and transitional period.

As for the post-Soviet times, the state-owned enterprises were ripped by the people, close to the Yeltsyn and other ruling circles. These people may have problems now if they're found not loyal. I don't care for them much, their success isn't a result of their personal effort. There are also people, who built their businesses from scratch, but they're much smaller, then the fortunes of those, who privatised former state factories.

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