In Conversation with Dmitry Medvedev: Interview with five media outlets

The traditional annual live interview with Prime Minister Dmitry Medvedev on the round-up of the Government’s work over the year. Asking the questions were Irada Zeinalova (Channel One), Sergei Brilyov (VGTRK), Marianna Maksimovskaya (Ren TV), Vadim Takmenyov (NTV) and Mikhail Zygar (TV Rain).

Transcript:

Sergei Brilyov: Good afternoon. TV channels Rossiya 1, Rossiya 24 and TV Rain and Vesti FM radio station are broadcasting the traditional annual live interview with Dmitry Medvedev. Good afternoon, Mr Medvedev.

Dmitry Medvedev: Good afternoon.

Sergei Brilyov: Mr Medvedev, you know all my colleagues very well, but, since I represent the majority of media outlets here, I will take the initiative and will ask the first question. Is the glass – meaning the economy – half full or half empty? I am asking you as the head of Government.

Dmitry Medvedev: My glass is more than half full.

Sergei Brilyov: Indeed, the statistics are quite contradictory this autumn. On the one hand, there are record-high agricultural indicators, and this is a fact. But on the other hand, everyone is saying that the rich years of the 2000s are over, and that officials’ salaries will be cut starting next year. The public supports this idea. At the same time, oil prices have not decreased, while the economy is stagnating. Who is to blame, and what is to be done? These are the traditional Russian questions. How do you assess the general situation in the Russian economy?

Dmitry Medvedev: Personally, I believe that the situation in our economy is the same as in the majority of developed and rapidly developing markets – that is, it is quite complex. I recently described it as “sour”. In general, I’d say that the situation in our economy is slightly better than in Europe on the whole and in a number of other countries, because it has grown, even if only a little. We hoped to report 3%-3.5% growth this year, but the yearend figure will likely stand at only 1.5%. On the other hand, the European economy has not grown at all. In fact, there has been a slump in production. The situation in Russia is quite complex, for two reasons. The first is that we have become an integral part of the global economy, and this is a fact. So, our economy is experiencing the same kind of pressure as the global economy.

Dmitry Medvedev: "We do have reserves which help us grow and give us reason to say that things are under control. Russia’s economy is growing, not falling, and moreover, shows good unemployment statistics – about 5.5% according to the ILO methodology, which is half, or even one-third of that of developed markets. Our debt to GDP ratio is not large either, about 10.5%, which is a good figure as well. We have substantial international reserves and other reserves that add up to around $700 billion, giving us a safety cushion of sorts."

But we also have our own problems and limitations on growth, including the structure of our economy, labour productivity, a shortage of investment and a poor business climate. If we address all of these issues step by step, we will be able to improve the situation. But allow me to say this frankly: we will not be able to make dramatic changes to the situation if the global economy continues shrinking – this much is obvious. The 2008 crisis showed just that, hitting every country – every country ended up in straits. We do have reserves which help us grow and give us reason to say that things are under control. What do I mean here? Russia’s economy is growing, not falling, and moreover, shows good unemployment statistics – about 5.5% according to the ILO methodology, which is half, or even one-third of that of developed markets. Our debt to GDP ratio is not large either, about 10.5%, which is a good figure as well. We have substantial international reserves and other reserves that add up to around $700 billion, giving us a safety cushion of sorts. Economic regulation is also adequate – something we have developed over the last few years. But this does not mean we can just relax, as this year has shown, as we had expected faster growth than what actually resulted.

Irada Zeinalova (Channel One): Mr Medvedev, eighteen months is a long enough period to be able to say how effective the Government was as a team, how wise the focus on appointing younger managers was, and how well each of them is coping with the job. So, how effective is it? Are we to expect replacements and reshuffles?

Dmitry Medvedev: "The current Government is a functioning team that was created at a certain point and is now an accomplished body."

In Conversation with Dmitry Medvedev. Interview with five media outlets

Dmitry Medvedev: You know, the Government is not a football team where people are chosen by their age and physical fitness. The Government is always a complex blend of various people. In my opinion, the current Government is a functioning team that was created at a certain point and is now an accomplished body, although certain ministries and ministers naturally face some challenges and problems. The Government members are well prepared to head their ministries. However, being a minister is very difficult and has nothing to do with, say, holding a public office or working for other government bodies. To be honest, not all the people that I have invited to join the Government were prepared to manage such a major operating processes from the very start. All ministers are public figures who manage major operating processes. Some even failed, and even if it wasn’t their fault, these people had to take the decision to move to another assignment. That’s just the way it should be. All in all, the Government is an accomplished and functioning team that brings together people of various ages. Such an approach has its merits: there are 30-year-olds in the Government, which is unprecedented, at least since the beginning of the 20th century, and there are middle-aged accomplished people who have long careers behind them.

Irada Zeinalova: Do you mean that this government line-up is final? Those who weren’t able to keep up….

Dmitry Medvedev: "New areas have been identified, and we’ve reinforced the sector relative to the Russian Far East. A new Deputy Prime Minister has been appointed and the minister has been replaced. We have reinforced the construction and the economic areas, which is linked with the housing and utilities sector. A new ministry has been established, and a new minister appointed."

Dmitry Medvedev: There is no such thing as a final line-up, since the Government is like a living organism. All in all, I don’t think rash moves are necessary at this point. The Government team has been formed and is working. There is no such thing as a final line-up, since the Government is like a living organism. All in all, I don’t think rash moves are necessary at this point. Everyone has been appointed, and everyone is doing the job. As I said, new areas have been identified, and we’ve reinforced the sector relative to the Russian Far East. A new Deputy Prime Minister has been appointed and the minister has been replaced. We have reinforced the construction and the economic areas, which is linked with the housing and utilities sector. A new ministry has been established, and a new minister appointed.

Marianna Maksimovskaya (Ren TV): Mr Medvedev, let’s talk about the work of… You just mentioned the new minister of housing and utilities. I will probably not be mistaken if I say that the people of Russia are mostly concerned about housing and utility issues. Prices have been skyrocketing, and the officials are lying shamelessly by saying that prices have increased by 6% this year, rather than 12%, as is actually the case. And you recently suggested that people might be required to pay for housing and utility services in advance, and that this measure would allow  to deal with billing defaults. But most payment defaults are caused by management companies, rather than residents. Maybe, instead of shifting the burden onto people’s shoulders again, it would be better to sort things out with the management companies in the housing and utilities sector?

Dmitry Medvedev: Marianna, why do you say that they are lying? No one is lying, this is mere talk. What did the Government decision mention? It was noted that a 6% increase would be registered at the end of the year, and that a 12% increase would be posted during the second six-month period, that is, when we raised prices. In some regions, prices will increase by 15%. I want to stress that a 12% increase will be posted at the end of the six-month period, rather than the entire year, and that prices will increase by 15% in some regions.

What’s the current situation? We’ll post not more than 5.5% at the end of the year (I repeat, year) and about 11.5% at the end of the six-month period. This does not mean that there have not been some setbacks in various regions, and we are addressing this issue.

Dmitry Medvedev: But on the whole, the situation is as I have described it, and those were the correct figures. I stand by these numbers.

Marianna Maksimovskaya: But there have been many failures, as you said.

Dmitry Medvedev: "The housing and utilities sector is in poor condition. It has been neglected and nobody wanted to invest in it for quite a while. I have recently met with our business leaders, who told me they’d like to have a closer look at the housing and utilities sector."

Dmitry Medvedev: You know, there have not been many, but it is always annoying when something goes wrong. I can understand people. They were assured that the charges would increase by 6% and, based on the results of the second quarter, by 12%. But when they receive their bills, they see that they are up not by 12% but, for example, by 18%. And so they feel cheated, although there have not been many cases like this. I held a meeting on this issue, and my colleagues… You can count these cases on one hand, but they were glaring cases, and this is understandable.

The housing and utilities sector is in poor condition. It has been neglected and nobody wanted to invest in it for quite a while. I have recently met with our business leaders, who told me they’d like to have a closer look at the housing and utilities sector. In the past, it was believed that no one in their right mind would take up that sector. The oil sector, export-import and even innovative technology were the way to go, but never the housing and utilities sector. But the time has come to invest both public and private funds in this sector. This is why we are creating a system of public-private partnerships to address this issue.

Now, a few words about the initiative you mentioned.

Marianna Maksimovskaya: Prepayments?

Dmitry Medvedev: Yes, advance payments. Here is another misunderstanding. First, we are only discussing this idea, and second, no one has said that everyone would have to pay the bills in advance. This wouldn’t be right. As many as 94% of people make their housing and utilities payments on time. There’s absolutely nothing to punish them for. This issue only concerns the 6% who have not paid their bills for over six months. Indeed, this is not fair on those who pay their bills on time. They may need targeted assistance, but that’s another matter. Then they should request it. As a matter of fact, everyone must pay their utility bills. So, the proposed idea concerns only 6% of people with payments overdue for six or more months. I’d like to say again that we are only discussing the idea, and nothing has been decided yet.

Marianna Maksimovskaya: Is your tap water rusty coloured, like the President’s?

Dmitry Medvedev: If the President said that his tap water is rusty coloured, then mine is too, because we live nearby.

Marianna Maksimovskaya: So, you’re in full tandem, then?

Dmitry Medvedev: We’re basically neighbours. But anyone can have rusty tap water, including those who live far away from Moscow, as well as the President and the Prime Minister, simply because our pipes are old. But we will definitely look into this problem with redoubled zeal, because this issue concerns the absolute majority of our people.

Irada Zeinalova: Mr Medvedev, I also have a question about money in our pockets and the initiative to freeze the funded part of pensions. Those who are working now to ensure decent pensions for themselves feel very negatively about this. Can you explain if the initiative provides for any compensation mechanisms? Because people are counting on this money.

Dmitry Medvedev: Let’s talk about pensions, because this issue is no less important than utilities bills, and it concerns everyone, although not everyone may be thinking about it. I don’t know about those present, if you think about your pensions, but personally, I believe that everyone should start thinking about their pensions at the beginning of their career, when they leave school and go on to further their education. Russia’s pension system has its shortcomings, just as in any other country. For the last, say, 15 to 20 years it has been going through cycle of modernisation. We respect the progress that was made, but we also understand that the pension system is not a dogma and should be fine-tuned. Refraining from action could lead to various problems in the future. It is for this reason that we have decided to introduce certain amendments.

Dmitry Medvedev: "The pensions that people receive should depend on two factors: the size of their salaries, which is fair enough, and the length of their employment. These are the two key factors. The bigger the salary and the longer the duration of employment, the bigger the pension. A point system will be introduced to this effect and is expected to come into force by 1 January 2015."

The first one is about the way pensions are calculated, which is actually a whole new approach. All in all, this should make things easier than they are today, whatever people may be saying about it (as it often happens, there is much talk about an issue, but no one has actually looked into the heart of the matter). The pensions that people receive should depend on two factors: the size of their salaries, which is fair enough, and the length of their employment. These are the two key factors. The bigger the salary and the longer the duration of employment, the bigger the pension. A point system will be introduced to this effect and is expected to come into force by 1 January 2015.

We are currently preparing all these initiatives. Draft laws are submitted to the State Duma, various issues are raised in this respect, the proposals are improved. This is business as usual. I would like to reiterate that the pension system needs continual adjustment. This pension system is expected to make it clear for every individual how his or her retirement pension is calculated, that it is not a gift from above calculated by some unknown people and you just have to take it but now  everyone understands  where it comes from.

 This was how the idea was born of a pension calculator, an electronic tool on the Pension Fund’s website or other websites for calculating pensions. It should be noted that 2.15 million people have already used the beta-version of this online pension calculator.

Irada Zeinalova: Some say that the calculator shows overestimated results.

Dmitry Medvedev: No, it doesn’t.

Irada Zeinalova: Have you calculated your pension?

Dmitry Medvedev: I did and in public view as well. However, I earn a high salary, so my pension is decent too, even taking into account that…

Vadim Takmenyov (NTV): There is a certain threshold for salaries; I think it is 47,000 roubles.

Dmitry Medvedev: "We (just like in other countries) are seeking to incentivise people to work beyond the retirement age, which means after they reach 55 or 60 years. I would like to draw your attention to the fact that unlike many other countries we do not intend to raise the retirement age. If people want to retire at 55 or 60 years, they are free to do so."

Dmitry Medvedev: Yes, right. I calculated my salary taking into account the fact that I do not plan to retire early. There’s a new feature here as well: we (just like in other countries) are seeking to incentivise people to work beyond the retirement age, which means after they reach 55 or 60 years. I would like to draw your attention to the fact that unlike many other countries we do not intend to raise the retirement age. If people want to retire at 55 or 60 years, they are free to do so.

Marianna Maksimovskaya: So it is actually a masked raising.

Dmitry Medvedev: No, it’s not. Everyone is the architect of his or her own fortune. If someone wants to spend their time gardening or looking after their grandchildren, they can retire at 55 or 60, and their pension will still be higher than it was 10 or 15 years ago, as we all understand. However, if someone wants to continue working, he or she will contribute more to their pension, thereby expanding, as experts call it, their pension entitlement. So my calculation was based on a retirement age of 70, the maximum age. And on the salary of the prime minister which is naturally higher than what most people earn.

Irada Zeinalova: So your calculation is based on the assumption that you will remain prime minister until the age of 70?  

Dmitry Medvedev: I had to enter my current salary, since I didn’t have the option to do otherwise. So my estimated pension will be substantial. However, people with lower salaries also used this calculator, and received estimates that are much better than under the current system.

With respect to future developments, we will continue approving pension-related laws. You mentioned the funded component of retirement pensions. Here’s what I have to say about it. The Government does not intend to cancel this funded component. I don’t know why, but word is spreading that “everything is cancelled.” This is not true! We are just making this system fairer, because everyone should understand how best to organise their savings. The country and the Pension Fund factor your savings into the tariff system.

Dmitry Medvedev: "The Government does not intend to cancel this funded component. I don’t know why, but word is spreading that “everything is cancelled.” This is not true! We are just making this system fairer, because everyone should understand how best to organise their savings. The country and the Pension Fund factor your savings into the tariff system."

Our retirement pension should have two components: the funded component comes first, followed by insurance contributions. Under the proposed model, people will have the opportunity to decide how to use their savings (for people born after 1967). People will have the option to reallocate the funded component as insurance contributions, in which case the individual insurance rate will be equal to 16%, while the funded component will no longer exist and the government will take care of the savings.

But you can preserve the funded component of your pension, which is also absolutely normal, and decide to channel your 6% to this funded share. In that case, you would preserve your 6% funded component and a 10% insurance  contribution. I believe that this is absolutely fair. You should personally decide which plan is more profitable and appropriate.

But our current task is to make sure these specific managing companies and private pension funds addressing this issue should be transparent and understandable, so they won’t suddenly go broke. This is precisely why we are passing separate legislation on funded pensions, and this is why we’re talking about banks and insurance companies all the time. But this is also no less important. As you know, they have accumulated huge financial assets. Therefore it is very important that these assets be monitored and included in the system. We’ll be able to make all these decisions, after we achieve this goal. Therefore, as I see it, we are making reasonable decisions with regard to the long-term development of the national pension system and talks that it is becoming more complicated and less transparent are absolutely incorrect. On the contrary, this system has become clearer and more understandable than the current system.

Marianna Maksimovskaya (Ren TV): Mr Medvedev, but reforms you are trying to implement now - these pension and housing and utilities reforms – are unpopular anyhow. Aren’t you afraid that you will go down in history as the prime minister responsible for this?

Dmitry Medvedev: Marianna, do you really think that I am afraid of this? To be honest, any normal person who is placed in charge of various processes, all the more so public servants and high-ranking state officials, should not be afraid of this.  Otherwise you will never make any decision, even as President or Prime Minister. You will never accomplish anything, if you think all the time, how a decision will affect your ratings, popularity and other indicators. One should not behave like a bull in a china shop, and one should not act imprudently and foolishly. But one should summon his courage and adopt decisions, including those on complicated issues, such as the housing/utilities sector and the pension system. The Government will address these issues, which are our responsibility.

Mikhail Zygar (TV Rain): Mr Medvedev, I would like to change the subject and go from national budget and economic problems to those of neighbouring Ukraine. Can you tell us, with due consideration for current national budget and economic problems, what price are you ready to pay to prevent Ukraine’s European integration? Why does this issue have such principled significance, and do you really think that these efforts are justified? Don’t you think that, just like in 2004, Russia is antagonising the majority of Ukrainians?

Dmitry Medvedev: "Ukraine itself, the people of Ukraine and, consequently, Ukraine’s leaders and government will decide where Ukraine should go, and what it should do."

Dmitry Medvedev: I have repeatedly discussed this, and I am absolutely confident that Ukraine itself, the people of Ukraine and, consequently, Ukraine’s leaders and government will decide where Ukraine should go, and what it should do. Therefore this is their authority and their prerogative, so let them address these issues.

On the other hand, we do care about Ukrainian developments. This country and its people are very near and dear to us. Moreover, Ukraine is a highly important trade and economic partner, and vice versa. Maybe, Russia is an even more important partner for Ukraine. Therefore, of course, we have to see how Ukraine will develop its economy. We have no objections to Ukraine’s integration with anyone in any way. This is their business, but they should assess the consequences of this kind of move, including the consequences of Ukraine’s association with the European Union and the consequences of its decision to join the Customs Union. Basically, this should be a well thought-out decision. To the best of our knowledge, Ukraine’s leaders are now concerned with precisely this issue. It took them a long time to think on establishing the free trade zone and signing a separate European Union association agreement. We have told them they were free to decide, but, in that case, they would face problems with national regulation, and that they would have to spend a lot of money on introducing these regulations. In addition, Russia, Belarus and Kazakhstan cannot remain indifferent to the fact that Ukraine would open up its market to European goods. We maintain friendly relations with Europe, and we trade with European countries. Russia and the EU are posting a $400 billion trade turnover. But this does not mean that we should disarm ourselves, open up all borders and tell them that they are free to deliver any items or goods which are not being sold on their markets. We should, nonetheless, understand how these goods will be delivered. Therefore we have told our partners that they should assess this future process. They have assessed the situation, and they have realised that they are not yet ready for this. This is probably the reason why, in any event, they have decided to delay the signing of the agreement. This is their internal affair. We simply drew their attention to various implications, and we told them that some problems could emerge. They have made their decision. As I see it, they have made an appropriate decision in accordance with the constitution, and they did not violate anything. The Government and the President have the right to decide on specific alliances and the documents which should be signed.

Both the Government and the President have the right to decide which alliances to join and which documents to sign. But the current situation there is really very complicated. It reflects the emotional side of decisions, and so we are closely monitoring developments in Ukraine. But then again, I’d like to say that these issues should be tackled by the Ukrainian leadership and people, and not foreigners or Russia. But other countries should behave civilly in this situation. Look at what is happening: foreign ministers from our partner countries go to Ukraine, and they don’t talk with the Ukrainian leadership or opposition, which would have been acceptable, but mingle politically, addressing people at events held contrary to existing rules on demonstrations. In fact, they take part in these events. How would our German partners feel if a Russian foreign minister attended an event in Germany held contrary to national rules? I don’t think they would consider this a friendly or justifiable move. There can be official meetings, but attending such events amounts to interfering in other countries’ internal affairs.

Vadim Takmenyov: Mikhail Zygar asked about Ukraine, but I’d like us to return to Russia.

Dmitry Medvedev: Please do.

Vadim Takmenyov: You’ve probably noticed that there’s a kind of hazing in the TV world: my older colleagues have asked two questions each, but I am a rookie, and so I was waiting my turn to ask my questions.

Irada Zeinalova: And some people are snitches.

Dmitry Medvedev: Vadim, instead you made a documentary film with the Government.

Vadim Takmenyov: Yes, that’s true. Mr Medvedev, this is what I’d like to ask you about. In the 1970s, when the situation in the oil market seemed to be quite good, the national leadership used the money to build more tanks and missiles. Years later, the economists, with the benefit of hindsight, said that the Soviet economy was ruined by the arms race.

In Conversation with Dmitry Medvedev. Interview with five media outlets

Judging by the defence budget, the race continues, one way or another. We have also held the most expensive APEC Leaders’ Week and are preparing for the most expensive Olympics. What else? Oh, the FIFA World Cup, for which we need to build stadiums, and so on. I would describe this as a construction race. Have you ever considered that the Government and you personally might be accused of launching this construction race that… Well, I can’t say that you will ruin the economy, but have you considered that this construction race might have an adverse effect on the Russian economy, as Minister Ulyukayev has said more than once?

Dmitry Medvedev: First, construction is a good thing. As we in Russia say, it is easier to destroy than to build. So, we must build. This is first.

Second, about what happened in the Soviet Union, and what is taking place in Russia. There is often a lot of inaccurate information when it comes to the size of budgetary allocations.

Dmitry Medvedev: "Our consolidated spending on education this year reached – just imagine – 2.9 trillion roubles. This includes allocations from the federal, regional and municipal budgets. And all of this is invested in education. But people don’t care where the money comes from, from Moscow or from other budgets. Spending on healthcare – 2.5 trillion roubles, including from the federal and regional budgets and medical insurance funds. Spending on defence – 2.1 trillion roubles. Now you can compare these figures. At the very least, these are comparable allocations, and the aggregate spending on healthcare and education is more than two times larger than defence allocations. We will carry on this policy, and we will try to increase spending on social projects, because the Government’s policy is to focus on the social sphere."

Let’s begin with armaments. We invest in education, healthcare and defence, but it is generally believed that we have a defence-heavy budget, that we spend too much on defence. Some people say we are doing the right thing, while others disagree. I had a difference of opinions with my colleagues on this issue, which explains changes in allocations. It would have been better to spend less on armaments and defence, but this is the world we live in.

Second, let’s compare figures. Our consolidated spending on education this year reached – just imagine – 2.9 trillion roubles. This includes allocations from the federal, regional and municipal budgets. And all of this is invested in education. But people don’t care where the money comes from, from Moscow or from other budgets. Spending on healthcare – 2.5 trillion roubles, including from the federal and regional budgets and medical insurance funds. Spending on defence – 2.1 trillion roubles.

Now you can compare these figures. At the very least, these are comparable allocations, and the aggregate spending on healthcare and education is more than two times larger than defence allocations. We will carry on this policy, and we will try to increase spending on social projects, because the Government’s policy is to focus on the social sphere.

As for construction, there can be no development without construction. Let’s consider what you’ve said. You mentioned the APEC Leaders’ Week, Sochi,  the upcoming Olympics and FIFA World Cup. Vladivostok is a very beautiful city, but it didn’t have a sewage system! And this is the city that is supposed to be our showcase on the Pacific Coast. Yes, we try to use every opportunity, such as the one presented by the APEC meeting, not to show off Russia’s beauty to our guests (which is good in itself), but to invest in improvements.

You know, something struck me a while back. I first thought about it in 2000, when I attended a G8 summit meeting in Okinawa, Japan. They spent $1 billion on that summit, which was big money at the time. I asked them why they were doing it, since it is a relatively small island. Here is what they told me: We decided that it is one of the least developed territories by Japanese standards, and so we used the opportunity to direct investment there. And I saw that they were right. We are doing the same now. After the APEC meeting, Vladivostok not only has a sewage system but also many new roads, the biggest theatre in the Far East, a wonderful university and numerous other facilities. And lastly, housing construction received a powerful boost. Isn’t this good? I think it’s good.

Now, take Sochi. Our Olympic project is very complex, because we are building in a place that was not suited for the Olympics. Do you know what Sochi is like? I think everyone has been to Sochi. I first visited Sochi as a young man. It is our main resort town. But to tell the truth, it was a rather modest resort town until recently.

Remark: It didn’t even have a stadium.

Dmitry Medvedev: "Sochi has changed radically. It now has a network of hotels and enough sport facilities for competitions and recreation. It will have normal tourist amenities, including restaurants and shops, without which you cannot enjoy your holidays, normal communications, and a railway in the mountains, which we would have never built if not for the Olympics."

Dmitry Medvedev: Exactly. As I said, it was a modest resort town. Because there were many other resorts in the Soviet Union, and besides, not much was done to develop that sphere. So it was embarrassing when Sochi was described as our main resort town. Sochi has changed radically. It now has a network of hotels and enough sport facilities for competitions and recreation. It will have normal tourist amenities, including restaurants and shops, without which you cannot enjoy your holidays, normal communications, and a railway in the mountains, which we would have never built if not for the Olympics. Our people like to spend holidays in the mountains, and now they can do so properly, but we still need to build more hotels and to ensure that their prices are competitive, because the greater the demand the lower the prices. In short, I believe that our investment in Sochi is fully justified.

As for the FIFA World Cup, what is it exactly? I don’t know about everyone here, but I’d imagine most of us are football fans, and so we need stadiums, and not only stadiums. Why did our regions fight so fiercely for the right to host the World Cup? Because it is a major development opportunity. You can build roads, housing and airports, which we will do in time for the championship, because it is a good development opportunity for the country. I believe that this is very important, especially because our country is so big and so complex.

Vadim Takmenyov: I hope so. The main thing is to prevent it from becoming an excuse to steal funds…

Marianna Maksimovskaya: …from the budget.

Vadim Takmenyov: …when such huge sums are spread among the regions.

Dmitry Medvedev:  As soon as big money appears, there are always people who crop up. Truth be told, some of them have illegal schemes in mind. So, we must keep an eye on how the money is spent. Those who dip into these funds for personal enrichment should be held accountable, perhaps even with criminal prosecution; others should be cut off from contracts and construction sites.

Mikhail Zygar: You are saying it’s harder to build than to destroy. Let’s talk about builders, then. Do you think Russia should have visa requirements for labour coming from Central Asia? Why is the Government so shy about admitting that the Russian economy needs migrant labour? The fact that the Government is keeping silent about it plays into the hands of certain populist sentiments in our society.

Dmitry Medvedev: Mr Zygar, we are not ashamed of it. It would be disingenuous to say that we can do without additional workers now. Russia is too vast a country, and we need extra labour resources. The question is what kind of labour we need and how we should go about using it.

First, let’s focus on who we need. Of course, we want highly skilled workers. We have more and more people like that coming to our country, because we are creating incentives for them, streamlining visa procedures and increasing compensation for many positions. This is being done both by state-run and private businesses. This is important for Russia. However, we also need less skilled workers. Look, our unemployment numbers are fairly low, and they are not rising, because we have many people coming to Russia from other countries who are willing to take jobs that our people find unappealing, such as maintenance or construction. Unemployment doesn’t increase just because our people are not interested in these kinds of jobs. Things are like that in other countries as well. This is because we have reached a certain level of well-being. This was unthinkable 20 years ago, but this is the case now. People loathe such jobs and don’t want to take them no matter how much they pay. That’s why migrant workers take these jobs.

Their legal status is the key question. They should be properly authorised to work in Russia. That is why we have recognised 380,000 foreign workers as illegal immigrants. They didn’t come here to work. They came here just to hang out. Such people should be sent back home. They should be held accountable for non-compliance. However, legal immigrants should adapt to our ways and customs and be part of productive life. Of course, they should be able to speak Russian, follow our rules and keep their habits to themselves. They should act in a civilised manner. This is something that we should work on.

Lawbreakers, whom we mostly see in the news, should either be deported or prosecuted. Their employers and landlords, including owners of so-called elastic apartments, should also be held accountable. This draft law has been through the first reading, and it will be passed one way or another. I don’t want anything that I just said to send another nationalistic wave across our country. Nationalism is bad and immoral. It’s deadly for Russia as a multiethnic country with many faiths. We should be very careful when we discuss these issues. Instigators are irresponsible people and should be condemned.

Mikhail Zygar: No visas for them?

Dmitry Medvedev: We have visa-free arrangements with the CIS countries and we have no plans to introduce any visa regulations with them, if things stay the way they are now. However, we plan to make border crossing a more formal procedure, though it won’t requires some obscure papers, because this is the wrong way to do it. We are different countries, so they should be able to produce their foreign passports to border control officers. This is how it should be done. Until now nationals of certain countries could cross the Russian border using only their internal passports. This practice will be terminated, and we will require foreign passports from everyone crossing the Russian border.

Sergei Brilyov: Medical insurance wouldn’t hurt, either.

Dmitry Medvedev: Yes, by all means. All the formalities should be taken care of. There’s no discrimination or humiliation here. All papers must be in order, including passports and medical insurances. And if you come here to work you also need to follow our rules and speak Russian.

Marianna Maksimovskaya: Mr Medvedev, you are right, there is a nationalistic sentiment in our country. Perhaps a few trials involving officials who issue fake work permits could put a lid on such sentiment? Or officials who siphon off…

Dmitry Medvedev: Money.

Marianna Maksimovskaya: Yes, money, budget funds, for example. Why is it that all they do is perform these showy raids at open-air markets where they nab a few migrants?

Irada Zeinalova: Or a showy trial involving nationalists who sow ethnic discord.

Marianna Maksimovskaya: Clearly, this is not enough to quell the nationalistic wave.

Dmitry Medvedev: They are showy, because you show them. That’s why.

Marianna Maksimovskaya: That’s what you show us. And then we broadcast what you show.

Dmitry Medvedev: "I’m confident that Russia has a modern and reliable banking system."

Dmitry Medvedev: Colleagues, what I’m saying is that these court proceedings are made public, which I believe is the right thing to do. But it’s not some kind of a a stop-and-go thing. You mentioned open-air markets. Markets have always been subject to all kinds of criminal and administrative proceedings, even in the Soviet Union. Therefore, thinking that the Interior Ministry has issued an order to shut down all the markets and crack down on everyone is wrong. These are regular operations. Keep in mind – and I’m sure you are aware of it – that such markets are home to many people who are at odds with the law.

Making an example of corrupt officials is also a bad idea. We’ve been there. It serves nothing. Instead, we should work on it systematically. You mentioned the Federal Migration Service. Lots of its employees are prosecuted: 50 criminal cases this year alone. Criminal cases, mind you. I believe another 1,500 employees have been disciplined. That’s a lot. It wasn’t part of a plan to have a certain number of criminal cases by a certain date for accountability purposes. Of course not. It’s part of their routine work. The Federal Migration Service, which used to be part of the Interior Ministry, has its own in-house security service. I agree that there are crooks there who should be held accountable. But this is not about making an example out of them, but about a system-wide effort. This is the only way that it will yield positive results. I agree that there are crooks there who should be held accountable. But this is not about making an example out of them, but about a system-wide effort. This is the only way that it will yield positive results.

Dmitry Medvedev: "We have adopted the Basel III rules, which set capital adequacy and reserve requirements. All these issues are handled by the Central Bank. I’m confident that this firm stance will make our banking system even more sustainable, which is a right and noble cause. With this in mind, the fact that several banks have lost their licenses should not be seen as something extraordinary."

Marianna Maksimovskaya: While we’re discussing system-wide efforts, I’d like to return to the issues of  massive construction projects and the state of the economy. If you’ll allow me, I’d like to talk about the presentiment that a crisis is looming.

Two major banks lost their licenses within the last month and a half. A cleanup of the banking sector is underway in the regions, while ministers from the economic block of your Government are explicitly saying that the economy is stagnating, to say the least. Why aren’t we seeing any systemic economic reforms in addition to those strange cleanup operations and activities in the banking sector? Don’t you think that it could be dangerous?

Dmitry Medvedev: There’s a certain tendency to use jargon. What cleanup operations in the banking sector are you talking about?! Look, as I said at the beginning of this interview, the economic situation in Russia is anything but simple, which is true. We have to address a number of issues. On the one hand, we are reforming and modernising the economy, creating a new technological environment, improving the safety net, overhauling the pension system, and implementing reforms in the housing and utilities sector. All in all, a number of complex reforms are underway. On the other hand, the Government has been tasked with ensuring stability, preventing the economy from falling off a cliff and avoiding problems that haunted Russia’s economy in the 1990s and, to some extent, in the1980s. This is a very challenging set of objectives. A balance should be found, since we need both reforms and stability. How can these two coexist? This is a very complex challenge, and the Government has to meet.

With respect to banks, I’m confident that Russia has a modern and reliable banking system. Our system was tried and tested during the crises of the 1990s, and had to deal with issues that arose in the 2000s. We are just ensuring that the system adapts to the new environment. What’s going on? There are many banks in Russia, about a thousand. Some think that there should be fewer banks, but the Government refrains from any artificial measures in this respect. However, the Central Bank has become the predominant financial regulator, so it should monitor what’s happening inside the banks, as well as outside the banking system.

A number of banks violated laws and failed to comply with regulations. Both their managers and owners were warned, and unfortunately banks that did not follow up on requirements had to be closed. However, the applicable rules should be respected: their licences should be revoked, so that the rights of all depositors are protected. This is what the Central Bank is doing.

Dmitry Medvedev: "А number of complex reforms are underway. The Government has been tasked with ensuring stability, preventing the economy from falling off a cliff and avoiding problems that haunted Russia’s economy in the 1990s and, to some extent, in the1980s. This is a very challenging set of objectives. A balance should be found, since we need both reforms and stability. How can these two coexist? This is a very complex challenge, and the Government has to meet."

Banks should be solid. Russia is member of various international organisations and has to comply with a number of international obligations. We have adopted the Basel III rules, which set capital adequacy and reserve requirements. All these issues are handled by the Central Bank. I’m confident that this firm stance will make our banking system even more sustainable, which is a right and noble cause. With this in mind, the fact that several banks have lost their licenses should not be seen as something extraordinary. The United States may not be the best example, but it is still the world’s largest economy. If I’m not mistaken, there are about 1,700 banks there.

I don’t remember exactly, but I do know that between 30 and 40 licenses are recalled every year and nobody screams about the collapse of the system. This is absolutely normal.

Sergey Brilyov: We’ve been on the air for more than 40 minutes …

Dmitry Medvedev: In other words you are suggesting that we speed up a bit?

Sergey Brilyov: No. But I’ve been listening attentively to my colleagues and I got the impression that they are all dancing around the topic of positioning, i.e. yours and the Government’s position in the 3D model of Russian politics.

Dmitry Medvedev: At least it’s good that it is 3D and not flat. 

Sergey Brilyov: Perhaps my question will only interest political junkies, but there is a sense… it’s not really a sense, it’s a fact. Of course there is public politics and there is behind-the-scenes politics. The case of Uralkaliy is an instance of such behind-the-scenes politics that reveals positioning and so on, though I repeat that for some it may seem a little too exotic. Anyway, what did we see ? The arrest of Baumgertner (CEO of Uralkaliy) in Minsk. Your deputies pitch in on his behalf. Then there is the issue of replacing the shareholder, and Mikhail Prokhorov becomes potentially the main shareholder. We remember your presidency and what was said about Mikhail Prokhorov, at least about the Right Cause party that he headed up at the time.

Dmitry Medvedev: What was said? Could you remind me? I forget.

Sergey Brilyov: He was described as a failed right-wing politician who, as many thought, was close to you ideologically.

Dmitry Medvedev: Look, some make it, some don’t, but nobody ever took away his money. He has the money and he can buy stuff.

Sergey Brilyov: This is not about Prokhorov. Then Baumgertner returns to Russia and it turns out that investigative authorities are taking an interest in him. Leaving along the issue of Uralkaliy, we would like to understand what happened and where you and the Government, the cabinet, stand in this complicated 3D situation in Russian politics.

In Conversation with Dmitry Medvedev. Interview with five media outlets

Dmitry Medvedev: It is indeed a complicated case, although I would not exaggerate the complexity. I would separate the legal aspects from the political ones. What are the legal aspects? There was a relationship between a Russian business and a Belarusian business, and at some point it was ended for economic reasons. The Belarusian side claims that unlawful actions were taken. They have the right to think so. They presented claims to our citizens. In this case, from the legal point of view, the Russian state should intervene and say that we will ourselves take the relevant measures with regard to our citizens, including the top executives of that company. We are capable of sorting out what happened in terms of criminal law and in general. The Belarusian side agreed to that position, though not at once, and eventually handed over one of those arrested, the director general, to the Russian Federation. All the investigative procedures should now be carried out and the objective truth about the case must be established: did he or did he not break any Belarusian or Russian laws? The most important thing is that now we are in charge and not another country, no matter how close a partner it may be.

Sergey Brilyov: That’s the legal aspect. But what about the politics?

Dmitry Medvedev: Now about the political aspect. The political aspect was perhaps inflated, because a series of events that took place lent this case an unduly political character, which is not so good for relations between Russia and Belarus. We are the closest of allies, the most fraternal of countries, and so it wasn’t necessary to make waves. We should have been informed at once about the claims that existed, and we would have sorted it all out as partners should. I hope that is how it will be in the future. At the end of the day it did not affect our relations with the Republic of Belarus.

Sergey Brilyov: And what about inside Russia, politics does not come into it...?

Dmitry Medvedev: It does because every event has a ripple effect. That should have been avoided, they should have simply said that they had claims and they were going to prosecute certain individuals for such and such violations, and that would have been enough. There was no need to stage a political show. But at the end of the day I am sure everything will be all right.

Vadim Takmenyov: Mr Medvedev, it’s about behind-the-scenes and public politics. You don’t have to be a political junkie, as Sergey said, to take an interest in the issue that I’m about to describe. We remember the recent headlines alleging that Medvedev criticised Vladimir Putin’s law on tax crimes, which would put these crimes under the jurisdiction of the law enforcement agencies. What was the President’s response to this? If somebody disagrees with something, like Kudrin in his time, he can resign and join the expert community. Let me remind you that it was you who sacked Kudrin because he disagreed with you. Judging from the fact that you are still the head of Government, that’s if we know everything...

Dmitry Medvedev: At this point in time I am.

Vadim Takmenyov: Did you agree with the President, did the President agree with you, or is it the case that your relations became strained and remain strained?

Dmitry Medvedev: Vadim, everything is OK between me and the President, no strain.

Dmitry Medvedev: "There are some very complicated crimes that are very difficult to sort out, and these include tax crimes because when it comes to crimes against persons, they are serious crimes by definition and they are easier to handle in that sense. Tax crimes are about economics immersed in criminal law, so the approach may change."

Now with regard to this issue. It is also both legal and economic. We would all like to see effective criminal law. There are some very complicated crimes that are very difficult to sort out, and these include tax crimes because when it comes to crimes against persons, they are serious crimes by definition and they are easier to handle in that sense. Tax crimes are about economics immersed in criminal law, so the approach may change. Two years ago to the day, on 6 December 2011, the law on amending the Tax Code clause about tax liability, criminal liability, was signed and a rule was introduced whereby for criminal proceedings to be opened a special summary from the tax bodies is necessary. This is a legitimate move, it provided some extra protection for businesses and probably made it more difficult to bring tax evasion charges. We know that these charges are very complicated but important because everyone must pay the taxes.

After looking at how that law was enforced, we proposed another bill which is currently pending before the State Duma and which is being ironed out. There is no direct reference to the position of the tax agency, but in the process of improving that document the President issued instructions to prepare some amendments so that the investigative authorities, the Investigative Committee, could proceed from a motivated opinion of the tax body regarding the tax offense. So, these are very similar approaches and the bottom line is that we should see how the new criminal law works. Nothing in this world is forever. We should create effective tax and criminal law, as I said. This is what the President is doing and this is what the Government is doing.

Irada Zeinalova: Mr Medvedev, I would like to ask you about what is perhaps the biggest and saddest piece of news, the recent Boeing plane crash.

Again the question of air safety is being raised, and people are saying that all the initiatives taken, including your own, have slipped through the cracks. Again we recall the tragedies in Petrozavodsk, Yaroslavl, Perm, and Kazan. What else needs to happen to make the system work properly? If we just revoke licenses of regional carriers, there will be no carriers at all. According to today’s news, foreign citizens can be employed by our carriers as pilots, but this is not a panacea.

Dmitry Medvedev: Irada, there are no panaceas. We just need to create a normal aviation industry in our country. This involves both the production and operation of aircraft. The Boeing crash is a tragedy, people lost their lives. An investigation is underway, conducted both by our agency and the Interstate Aviation Committee. Several countries are involved, including the United States as the producers, France because they make engines, and Russia. The results should be released in order to avoid making assumptions now. Naturally, all the data is being analysed, including the voice and parametric records. This case should be properly investigated, as it is very strange. Yesterday I received another report, but it is too early to make any conclusions. 

As for the system, you are right. Unfortunately, the system has degraded. We have less proper aircraft but more carriers. This is not the first time we are facing this dilemma. I am not going to say anything bad about the company that operated that plane. Corresponding agencies will deal with it and, if necessary, revoke its license. What’s at issue? Such companies should be safe, that is the issue. This is the main concern of our citizens. There used to be 400 airlines, but only 100 remain now. We should determine the necessary number of airlines on the basis of the country’s needs. We have a large country and a great number of carriers, but it should be a reasonable number. Some Russian carriers are ranked among the best in the world. The top 60 in the world includes two of our companies, Aeroflot and…

Sergei Brilyov: Transaero?

Dmitry Medvedev: Yes, Transaero.

Irada Zeinalova: But it turns out that the rest just lack pilots…

Dmitry Medvedev: Just a moment. These companies are major carriers. By the way, I was surprised to learn that Transaero is ranked the world’s 16th best airline. This is really good.

Dmitry Medvedev: "Our citizens have stopped working in the aviation industry, and now we have a shortage of pilots and captains despite the fact that pilots and aircrew earn competitive salaries. They are the same and sometimes even higher than in European countries. But pilots are a precious commodity, as they must be trained and prepared in order to be entrusted with passengers."

As for pilots, this is a problem. Unfortunately, our citizens have stopped working in the aviation industry, and now we have a shortage of pilots and captains despite the fact that pilots and aircrew earn competitive salaries. They are the same and sometimes even higher than in European countries. But pilots are a precious commodity, as they must be trained and prepared in order to be entrusted with passengers. That’s why we’ve taken the difficult decision, discussed with aviation trade unions and other agencies, to invite the most qualified pilots from abroad until we fill this gap. By the way, this is a common practice all over the world. So we should keep working to improve the situation with carriers, safety requirements, and aircraft that are in operation.

Marianna Maksimovskaya: Mr Prime Minister, if we could continue this sad line of questioning – the State Duma.

Dmitry Medvedev: Is it sad for you?

Marianna Maksimovskaya: For some people it is.

Dmitry Medvedev: Bur for others it is quite funny…

Marianna Maksimovskaya: Judging by polls, people’s views of the State Duma are not good. This year MPs approved a raft of restrictive laws, starting with the political field and finishing with the famous anti-gay law and the law protecting religious feelings. Just the other day, the MPs introduced six bills, from banning free abortions to banning child beauty pageants. In one region, books about sex education for teenagers are prohibited; another bans Russian classics, and so on. You see, many people think that Russia is shifting from a traditional country to a sanctimonious and backward one. Do you feel how the atmosphere in the country has changed? Do you like it?

Dmitry Medvedev: "The State Duma is our parliament, the lower house, and it must be respected, as well as courts and other authorities. Otherwise there will be chaos."

Dmitry Medvedev: Well, look. We may dislike laws approved by MPs. It’s okay, because everyone has the right to his or her own opinion. Bur if we want to be a nation of laws, we must respect the institutions of government, and that includes parliament.

The State Duma is our parliament, the lower house, and it must be respected, as well as courts and other authorities. Otherwise there will be chaos. It is a different matter that in every parliament there are more mainstream initiatives and then there are exotic ones. The exotic ones can vary, and some of them do not receive any support. You mentioned a range of initiatives, but neither the executive branch nor the President have anything to do with them. They originated in the parliament.

As for the other thing that is constantly discussed: Yes, our parliament, like any other parliament, is divided into parties. But these are living people, not cogs in a machine. They may have their own ideas about morality, good and evil. And their initiatives may be specific to them, as they reflect their attitude towards life. But this does not mean that I back them all. On the contrary, I do not advocate sanctimonious approaches to modern life. The world does not stand still. The vast majority of things which are normal to us would have been labelled seditious three hundred years ago. But again, decisions and proposals are made by real people. This fact should be respected, but that does not necessarily mean you have to support everything. I do not like some of the initiatives you mentioned. But such exotic things can be found around the world, as parliament is a place where opinions collide.

Marianna Maksimovskaya: Mr Prime Minister, but many of these exotic initiatives become laws.

Dmitry Medvedev: By far not all exotic bills like this become law. I could comment on some of the things you said. Our deputies or the legislatures of the constituent entities have introduced many initiatives that never became laws and never will.

Marianna Maksimovskaya: Thank God.

Dmitry Medvedev: But other countries also have this sort of thing. I could cite some American laws in some states. We tend to laugh at them, but we don’t think they really result in some kind of suffocating atmosphere. Take, for example, a law that requires you to have at least 10 dollars in your pocket, otherwise you have no right to go outside, or a law that forbids a person from sleeping naked in his own bed. We don’t believe this has really created some kind of stifling atmosphere. But it works, because it’s part of a precedent-based legal system. And they live with it. I’m not suggesting that we start copying these kinds of laws. Again, parliament should be responsible. Even so, it doesn’t necessarily reflect an approach the President, the Government or the leading political party should pursue.

Marianna Maksimovskaya: So the main political line is different, after all?

Dmitry Medvedev: Of course the political line is different. It is about developing our country and not immersing ourselves in obscure details.

Marianna Maksimovskaya: And in the Middle Ages.

Dmitry Medvedev:  And in the Middle Ages.

Irada Zeinalova:   And in announcing curfews.

Vadim Takmenyov: Still on the subject of the Duma and its bans. This subject attracted a lot of attention and was heavily debated. Did you follow the high-profile ban on the adoption of children by Americans?

Dmitry Medvedev: Of course I did.

Dmitry Medvedev: We should do everything we can to make sure that those who did not get to their American families find a new family in Russia or elsewhere. There were a total of 259 children who were slated to go to America. At this point 95 children have yet to find a new family, to become settled in a new family. This is a difficult subject, and a very painful one, but we should do everything we can to ensure that children in care homes find new families.

Vadim Takmenyov: You know, we have all seen it and we remember our bureaucrats and deputies shouting from the rooftops that these are our children, we won’t give them away, we won’t leave them in the lurch and so on. Now a year has passed and here’s a specific example. In St Petersburg they were supposed to give 33 children to American families, well, they didn’t and as a result only one child has been adopted by a Russian family. I wonder if your statics are any different.

Dmitry Medvedev: First my thoughts about this, and then about the statistics. There is no doubt that this is a headache, this is a problem. You may look at these adopted laws in various ways, but there is one unchallengeable fact: we should attend to our children ourselves and not count on some kindly  people in various other countries, although we should thank those who are charitable, of course. But we must make this part of our own system because we have too many problems like this piled up. And that is, I think, our main goal. This problem arose with regard to only one country on which the document you all know was passed because of the way things developed, the difficulties and sometimes crimes committed against our children in the United States. The decision was made, but there has been mixed reaction to this law. Of course we should do everything we can to make sure that those who did not get to their American families find a new family in Russia or elsewhere. There were a total of 259 children who were slated to go to America. At this point 95 children have yet to find a new family, to become settled in a new family. You mentioned St Pete, where you said there are 33 such children. I have looked into this, about the process of adoption and there still remain 11 children. Eleven, that’s my statistic, but this is not the main thing. This issue moved up efforts to speed up the process of adoption and the placement of children with families in the country, because this year (I think in the first nine months of the year) 5,000 more children have been adopted and placed with families than last year. That’s a good result; it shows that we have set in motion certain mechanisms, call them moral mechanisms, in order to draw our people’s attention to this. I agree that this is a difficult subject, and a very painful one, but we should do everything we can to ensure that children in care homes find new families.

Irada Zeinalova: Mr .Medvedev. One more question about legislators and law enforcement. One high-profile scandal in recent weeks is the arrest of Stolyarov, the mayor of Astrakhan. And he’s not the first mayor to be put behind bars from amongst those whom United Russia backed during the elections. Judging from law enforcement agency statements, there were questions about Stolyarov even before he joined the race, but he got the support of United Russia anyway. What is the situation within the party as regards party control and working with the cadre? These scandals give the party a bad reputation.

Vadim Takmenyov: Can I mention the latest scandal?

Irada Zeinalova: And the latest scandal involving gold pistols. First gold pretzels and now gold pistols.

Vadim Takmenyov: The fight among the deputies, and everybody is talking about United Russia’s gold pistol as it is called.

Marianna Maksimovskaya: Which fell out of a pocket.

Irada Zeinalova: Yes, it fell out of a pocket, like James Bond was flying past.

Dmitry Medvedev: The party is a big piece of our country, a part of our country. There are the same people as everywhere else, with their good points and their shortcomings.

Marianna Maksimovskaya: And with guns.

Dmitry Medvedev: Hold on a second. With regard to those who were caught. They have to answer regardless of what party card they carry. United Russia should answer especially because it is in power. Can these things be completely ruled out in theory? No, because unfortunately power tends to be abused. Unfortunately, such offences are committed not by those who hope to be in power someday, but by those who are already in power, that’s why authority must combat this sort of thing itself. If not United Russia but some other party was in power (let’s be honest with each other) do you think abuses would become a thing of the past? Why didn’t they recede into the past in the Soviet times, or in Tsarist times? There have been various political forces, but of course such cases should be looked into.

Regarding Astrakhan. An investigation is under way, it must be carried through, but the party – and I agree with you there – must pay attention to this so that anyone who happened to be under suspicion isn’t included in the electoral process. That is right. They are considering now the option of introducing so-called preliminary recommendations for certain party and state positions. If you nominate someone, you must be responsible for that person, if not legally at least morally, the way it was during certain periods in our history. There is nothing wrong with that. That’s one thing.

The second thing. We have introduced the institution of suspension of party membership. We didn’t have this before. If a person comes under suspicion (I stress, suspicion) and is under criminal investigation his party membership will be suspended. If he has proved that everything is okay, he will be reinstated in the party, if not, he is expelled. So, of course we will react to these issues. But one should not idealize the party.

Dmitry Medvedev: "The Constitution should not be rewritten for some milestone date, the Constitution should be changed only in case of extreme need, when we think that some of its provisions either have not withstood the test of time or weaken the overall state structure."

But you shouldn’t idealize the party. The party is a group of people, some of whom are honest, decent people who devote much time to state affairs, help people and take on very complex social and economic issues, but there can also be some dishonest people. We should get rid of them, bring them to account. That’s normal.

Irada Zeinalova: The party does review people’s personal files, doesn’t it? If there were questions about Stolyarov...

Dmitry Medvedev:  You know, personal files are of course, a good thing. Perhaps you remember, though I think I remember it better, how things were during Soviet times. As someone who has held various government jobs I have seen many profiles prepared by various organisations. What do they write? That there is unconfirmed information that so-and-so had contact with so-and-so. Do you think this is reason enough for the party or a state leader to say: you know, there are reports that he has met so-and-so, talked with so-and-so and that he has some contacts with somebody? This is always a very delicate matter. A person’s fate may hinge on this. Of course, if there is a police record and videos showing him taking bribes it’s clear that a criminal case must be opened, legal action must be taken, arrests made and so on. But if there is just hearsay... We know that on the basis of such information thousands of people were sent to jail or somewhere else and were then later pronounced innocent.

Mikhail Zygar: Let’s talk some more about the “piece” of our country, as you put it, the party. The Constitution will soon be 20 years old and a deputy from another party, Mizulina, recently suggested introducing amendments to the preamble of the Constitution to the effect that Orthodoxy is the basis of national cultural identity. She was backed by some members of United Russia, for example, Sergei Zheleznyak, the party’s new ideologist. First, do you support the proposal to include the mention of Orthodoxy in the Constitution and in general do you think it’s necessary to rewrite and somehow change the Constitution for its 20th anniversary?

Dmitry Medvedev: The Constitution should not be rewritten for some milestone date, the Constitution should be changed only in case of extreme need, when we think that some of its provisions either have not withstood the test of time or weaken the overall state structure. And that does not apply to fundamental human rights and freedoms, for that there is a special procedure to adopt amendments and on the whole it would be fair to say that everything is written up in accordance with world canons. As regards the Orthodox religion, every person is entitled to his or her own point of view: Mizulina has one point of view, Zheleznyak has a similar view and someone else has a different point of view. For example, I go to church, but I do not go there in my capacity as Prime Minister. I went to church before I came to work in Moscow, and will go to church after I finish my state career, and whatever the rules on freedom of conscience may be I will continue to go to church even if the Constitution changes. I think that’s not uncommon. By the way, we in United Russia have not only those who belong to the Orthodox denomination, but people who identify themselves as Muslims and there are representatives of other denominations. That is perfectly normal. Our religious feeling must not be connected with our party card; that’s obvious to me. So, establishing special preferences is inappropriate. Our Constitution proclaims freedom of conscience: everyone chooses his religion according to the way he feels, or says he is an atheist. This is the civilized approach to such relations.

Dmitry Medvedev: "Our religious feeling must not be connected with our party card; that’s obvious to me. So, establishing special preferences is inappropriate. Our Constitution proclaims freedom of conscience: everyone chooses his religion according to the way he feels, or says he is an atheist. This is the civilized approach to such relations."

Vadim Takmenyov: Mr Medvedev, the Constitution is 20 years old. We heard the other day that on this occasion President Putin has agreed to the proposal and is going to submit a bill on amnesty to the State Duma himself. And you know what keeps many people guessing? They are wondering if the amnesty will be a broad gesture and will take in people whose indictments were thought by many to be politically motivated. We are not talking about the hundreds and thousands who are in jail for petty theft. I’m aware that this question is not so much within your competence, so I would like to put this question to you not as the Prime Minister, but simply as a citizen, a politician, for that matter, the chairman of the ruling party. Why not use this date to pardon Khodorkovsky, Pussy Riot or the “Bolotnaya case” prisoners? Turn that page and start a dialogue with that part of society from a clean slate?

Dmitry Medvedev: Vadim, you are right that these issues are not within my competence; these are questions for the President and Parliament. But since you asked, of course I’ll comment. It’s true that at one time I made these decisions and so I understand the implications. First, you shouldn’t confuse amnesty and pardon. A pardon is an individual act with regard to a specific individual. This is done by the President, the head of state, on the basis of a motivated statement and as a rule a petition by the person concerned. Amnesty is a more complicated proposal. It means a release from custody, the clearing of criminal charges of people who are serving a sentence under a certain criminal code article. You mentioned several people who are known in the country for various reasons…

Vadim Takmenyov: And not only in our country.

Dmitry Medvedev: And not only in our country. But don’t forget about the 700,000 people who are currently in jail. I think in making a decision about an amnesty one should think about all the people who are suffering this kind of hardship.

Dmitry Medvedev: "You shouldn’t confuse amnesty and pardon. A pardon is an individual act with regard to a specific individual. This is done by the President, the head of state, on the basis of a motivated statement and as a rule a petition by the person concerned. Amnesty is a more complicated proposal. It means a release from custody, the clearing of criminal charges of people who are serving a sentence under a certain criminal code article."

Why do we always think only about those who were lucky enough to get in the spotlight or with regard to whom there is some international controversy? Who thinks about the others? We have minors who are in prison, and we have pregnant women in prison, we have pensioners who are serving sentences. Are their lives any easier than that of the people you mentioned?  Certainly not. So, an amanesty is an act that should apply to a whole category of people. As far as I know, the President is preparing a draft resolution for the State Duma on this issue which will cover a number of categories, above all those who need state protection under these conditions, and those whom the state can forgive. At the end of the day an amnesty is an act of forgiveness on the part of the state. That seems to me to be far more important in this situation.

As to who should be amnestied, this is always a matter of choice, but the state should listen to public opinion and not just on a personal feeling pardon a person, or offer amnesty to these people.

As a matter of fact our people don’t often appreciate these proposals, for example, to amnesty those who have committed violent crimes, people who have committed crimes against society. People are not inclined to take the right decisions on amnesty for people who have committed state crimes or acts of grand larceny. So the President and Parliament must listen to the public mood. In other words, in making these decisions one should look not at the names, but at the degree of danger these offenses pose to the public and at the fate of specific people who usually have themselves to blame for their difficult situation.

Marianna Maksimovskaya: Mr Medvedev, but the state could give society a lesson in humanism, especially since we don’t have all that many political prisoners. Even human rights activists admit that.

Dmitry Medvedev: You know, Marianna, it’s a matter of a reference point. If you believe we have political prisoners, I, for one, do not think we do. There were political prisoners in our country during a certain period. In the Soviet period there were political prisoners in our country who were imprisoned for their political views, there were such people. But we don’t have this today. Those who are usually mentioned to me are people who, yes, are probably in opposition to authority, they have their political convictions, but people are not jailed for political convictions. They are serving their sentences or are in pre-trial detention because, pardon me, they grossly violated public law and order. Whatever your political convictions (incidentally, I was saying this in this very studio) you cannot beat a policeman. They are in prison not because their political views differ from the political views of Putin, Medvedev, United Russia or somebody else, but for beating a police officer. This is unacceptable in Russia, or Ukraine or Europe or any other country. I think that’s important. So, if somebody says that we have political prisoners they are either investing these claims with ideological meaning or they are economical with the truth.

Dmitry Medvedev: "There were political prisoners in our country during a certain period. In the Soviet period there were political prisoners in our country who were imprisoned for their political views, there were such people. But we don’t have this today. Those who are usually mentioned to me are people who, yes, are probably in opposition to authority, they have their political convictions, but people are not jailed for political convictions. They are serving their sentences or are in pre-trial detention because, pardon me, they grossly violated public law and order."

Sergey Brilyov: Colleagues, according to the published TV schedule we have about 15 more minutes to be on the air and audiences are waiting for other programmes.

Dmitry Medvedev:  Let’s not bore them with long conversations.

Sergey Brilyov: For my part, I promise that this is my last question.

I would like to ask you as a lawyer who is surely interested in this matter, about the forthcoming merger (the signs are that it is forthcoming) of the Supreme Court and the Higher Arbitration Court. Two questions.

First. President Putin said just recently that arbitration as such will be preserved, but the Higher Arbitration Court will disappear. Do you not have sympathy for the chairman of that court, your former university classmate Anton Ivanov?

Question number two. The talk is that the whole idea of unifying the Higher Arbitration Court and the Supreme Court has been proposed with you in mind, so that you can head up a unified court system. At a subconscious level you let slip (I jotted it down) the phrase “when I finish my state work.” Was that accidental or not in this context?

Dmitry Medvedev: Let me say right off: “when I finish my state work…” Work in the courts is also state work.

Sergey Brilyov: It is state work all the same. All right, let’s turn to the courts.

Dmitry Medvedev: Now to the substance, about the court system. This is a very important subject. Our judicial system has its merits and shortcomings. We have also only been developing it for 20 years. The established legal order here and in many European countries has included courts of general jurisdiction and so-called trade courts which we call arbitration courts; this has been the case since pre-revolutionary times. Many countries have a unified system. It has its pluses if only because the practice is more consistent, unified. A mandatory recommendation issued by a Supreme Court plenary session would, naturally, cover everything; you wouldn’t have to make two decisions, which are sometimes at odds with one another, and so on.

I’ll tell you frankly, we have been discussing this issue  quite a while with the President, with our colleagues – how to improve our judicial system. So, this model has been chosen and I hope it will yield positive results. Having said that, I must clarify that the system of arbitration courts is not being scrapped, these courts will remain within the system and will pass decisions on economic disputes. These are generally very complicated cases, over the past 20 years the arbitration court has considered about 20 million cases, that is, it has done a huge amount of work. All those who have worked there dealt with very important cases and are still handling very important issues.

Dmitry Medvedev: "I like what I am doing, it’s an interesting job. As long as I am able to do it, as long as there is a presidential decision in this respect, I’ll do it because it’s very important and very challenging."

You mentioned my colleague that I once worked and studied with. I think he has been doing a good job in this position. I hope he will yet be helpful to the state, I am referring to Anton Ivanov, a very competent lawyer, as everyone recognizes, and a good head of the judiciary.

Now, on more personal matters, I made a note of it here. If this is an attempt to trip me into disclosing when I plan to quit, I’d like to tell you that I like what I am doing, it’s an interesting job. As long as I am able to do it, as long as there is a presidential decision in this respect, I’ll do it because it’s very important and very challenging, albeit not very popular, as you justly said. Actually it brings me not only some negative feelings which every person is prone to have, but many positive feelings because you see what you are doing, you see how your work is put into practice. This is very important for any person, whoever it is. So I work as the Prime Minister of the Russian Federation.

Marianna Maksimovskaya:  And yet many people would like to know if, after you stop being the Prime Minister, you would like to become President again?

Dmitry Medvedev: We seem to have established a tradition. I think this is the seventh time we have discussed this in this very studio, though with a different cast of characters. Practically every conversation on this theme, even when I was the President or in the last two years, has ended like this: are you or are you not going to run for president? Dear colleagues, I am doing what I am doing. It is a very important job. Incidentally, I commented on this last year. I’m not closing any options. But I’d like to work some more before considering all the circumstances and taking a decision that I think is right for me. That’s all.

Mikhail Zygar: We have about 10 minutes left. I’d like to ask some quick questions that we gathered on our website tvrain.ru and via Twitter from our audiences.

Dmitry Medvedev: Go ahead.

Mikhail Zygar: You have to keep your answers down to 150 characters.

Dmitry Medvedev: In other words, I have to give quick answers?

Mikhail Zygar: I’ll go very quickly. From someone who calls himself Ivan Ivanov: why is Russia not ratifying Article 20 of the UN Convention against corruption? For the benefit of our audience, under that article, officials have to explain where they got the money to buy a property whose value exceeds their salary. For example, if they have a palace in Sosny, they have to explain it to the public. Why is Russia not ratifying this article?

Dmitry Medvedev: Mikhail, are you deliberately asking these rapid-fire questions? These are questions that cannot be answered in a blitz format. You’ll have to forgive me for giving you a boring legal answer. What is Article 20? Article 20 is an article whereby criminal proceedings can be instituted against public servants for corrupt actions. There is only one question, why have we taken exception to this article? I think you all understand why, even though you are not lawyers. In general, people in this country have to answer for their wrongdoings, we have presumption of innocence. We don’t impute crimes like in the Middle Ages and in some countries today.  Article 20 proceeds on the assumption that a person suspected of a corruption related offence must prove that he is not guilty of corruption. It is a matter of choice. You may accept this. Incidentally, I don’t mind telling you that the Justice Ministry is preparing a proposal on Article 20. But we need to weigh all the pros and cons. Fighting corruption is necessary, let them explain where their palaces, as you put it, come from, that’s a common approach. But there is an argument against it: we understand that our law-enforcement system is imperfect, and if a person is presumed to be guilty and then has to prove that he is innocent, this is strictly speaking beyond the fundamental principles of our criminal law system.

Mikhail Zygar: Thank you. A question from Oleg Kashin. There are reports that a dismissed government bureaucrat by the name of Vassily Yakimenko is on the staff of Sberbank and draws a salary of about 500,000 dollars, though he does not show up to work. What do you think of a system under which dismissed bureaucrats draw such a pension, possibly from the state or sources close to the state. We have many such cases, the name Serdyukov could be recalled.

Dmitry Medvedev: I don’t know who is paid what in this situation. I can make inquiries about where he works and what bonuses he receives because bonuses of course must be fair and transparent. But former bureaucrats are also human being. They have worked for their country, have done much for it, and I see nothing wrong in some officials being employed by commercial companies if it doesn’t violate the law. What is the law? There is the conflict of interest rule. I don’t think it’s proper when the minister of energy immediately goes into the energy business, there may be some nuances to this, but it is not illegal, even under today’s conditions.

As regards remuneration, first, it’s up to the bank to decide how much to pay him, but since this question has come up I’m willing to ask the governor of Sberbank why a certain amount of money is paid.

Mikhail Zygar: A smart and last short question comes from Yevgeny Pakhomov. It’s essentially a yes or no question. Mr Medvedev, will you run for President or have you made an arrangement like before?

Dmitry Medvedev: I think I’ve just …

Marianna Maksimovskaya: There you are, and you are surprised. 

Dmitry Medvedev: I’m not surprised. I just gave an exhaustive answered to that question.

Irada Zeinalova: You just wasted 30 seconds.

Mikhail Zygar: Answer the question, have you made an arrangement or not?

Dmitry Medvedev: I have answered that question.

As the youngest among those present I award you the last question.

Vadim Takmenyov: Actually, I think it was a good way to end. You know what I would like to ask you about? I see that you are without your iPad (okay, tablet, not to advertise anything) and I’m surprised. Lately, you have for some reason stopped using it. But my question is about something else. Have you by any chance thrown away your iPhone since quite recently an information came that President Obama was not allowed to use his iPhone because it’s too vulnerable to hacking? They know what they are saying. We know that they were tapping Angela Merkel’s phone. In fact, they said that they were eavesdropping on you too during the G8 meeting in Britain.

Irada Zeinalova: And Angela Merkel called you.

Vadim Takmenyov: Sure enough. Well, don’t you have nightmares that they are tapping your phone, reading your SMS correspondence and will some day publish all this?

Dmitry Medvedev: I have not of course thrown away my iPhone. You know that I’m fond of gadgets, but we’ve got our own now.

Vadim Takmenyov: I have one like yours, by the way.

Dmitry Medvedev: Ours may fall short on some counts compared with other similar gadgets, phones, smart phones, but it has the advantage of having two screens. Let’s hope that it’s better protected against these operations than the iPhone or some other devices.

On a more serious note, first of all, it’s good that something new has appeared here. I have mentioned that we’ve developed such phones and I get a lot of comments along the lines that “it is no good anyway, it’s too expensive” and so on. I’d like to tell you that all this is true. But it is a good thing that we are getting into smart phones, new technology. This is the thing to do. This is the future.

Now for the serious stuff. What should the head of state do? The head of state should assume his share of responsibility. I never discuss serious state issues on my mobile (no matter if it is an iPhone, Iotaphone, Samsung or whatever). I discuss only casual things. I think that’s natural. Not all people think so, actually.

Irada Zeinalova: This, incidentally, could prompt certain conclusions.

Dmitry Medvedev: This is normal. So, everything is fine in that sense. And I would advise our American counterparts and Barack Obama not to be afraid.

In Conversation with Dmitry Medvedev. Interview with five media outlets

Sergey Brilyov: A great way to end. Thank you. It’s been 90 minutes to the second, yes?

Dmitry Medvedev:  It’s 90 minutes by my watch.    

Irada Zeinalova: Great. We made it.

Vadim Takmenyov: Mr Medvedev, what screen saver do you have on your Iotapahone? 

Irada Zeinalova: Show us. Does it ring?

Dmitry Medvedev: Yes, it rings, but I switched it off of course. There are two screens. This is the screen saver on one side.

Vadim Takmenyov: An abstract pattern?

Dmitry Medvedev: Yes, abstract. I’ll show you later.

Marianna Maksimovskaya: It’s the coolest presentation of a Russian gadget.

Dmitry Medvedev: It’s Russian all right, which is good in itself.

Marianna Maksimovskaya: You are abusing your office now…

Sergey Brilyov: It’s all right, we learned from this phone that it’s 1:30 p.m.

Dmitry Medvedev: Yes. And I would like to thank you for the opportunity to talk with you and to wish you and our TV audience a good December and a Happy New Year.

Sergey Brilyov: Thank you Mr Medvedev. And that brings to an end the broadcast on channels Rossiya 1, Rossiya 24, Dozhd and Vesti FM. We wish you all the best.

***

Dmitry Medvedev in an interview with Marianna Maksimovskaya, Ren TV

In an interview with Marianna Maksimovskaya, Ren TV

Marianna Maksimovskaya: Mr Medvedev, I can’t miss this opportunity to ask you the most exclusive question...

Dmitry Medvedev: About aliens?

Marianna Maksimovskaya: No, not this time!

Dmitry Medvedev: No, especially as I have already answered that question, and now everyone knows where they are.

Marianna Maksimovskaya: By the way, you know that that question attracted more attention that any other?

Dmitry Medvedev: I can imagine, because I disclosed a state secret.

Marianna Maksimovskaya: Exactly. But this time I’d like to ask a different question. A giant suitcase belonging to a famous fashion house was dismantled in Red Square last week after a huge scandal. Many said that Red Square is sacred to the Russian state, and that a suitcase like that must not be allowed on the square, even if it was to house an exhibition. If we use this argument, perhaps it’s not just the suitcase that should be removed from Red Square, but also the mummy of Bolshevik leader Vladimir Lenin, for the sake of balance, so to speak? Don’t you think that this would really make Red Square a sacred place to the Russian state and all its citizens?

Dmitry Medvedev: As you know, the word “red” is related to the word krasivy, which means beautiful. Red Square is indeed beautiful, and we should avoid adding unnecessary elements to it. I am not going to talk now about various promotional campaigns, where much depends on the tact, style and responsibility of those who approve them. I have nothing against the products of the company in question, but as the saying goes, there is a time and place for everything.

But now to a more serious issue – can Red Square be a burial place? This is another delicate and very complex ethical issue. It would have been better not have it as a burial place, but what happened, happened. It was not us who took the decision.

Second, you should respect public beliefs and the symbols which several generations of our people held dear. So a decision as to where to move this or that should be taken by a consensus, that is, it should reflect the opinion of the majority, and it must not divide society. Personally, I believe that Red Square should be beautiful, but any decision concerning those who were buried there should be taken after holding debates with a huge number of people and should comply with moral norms, including Orthodox morals, according to which the dead must be buried in cemeteries. I believe that there is moral truth in this precept. But I want to repeat, though, that such decisions can only be taken after extensive discussions, and these decisions must not tear our society apart, because I believe that tranquillity is more important in this case.

Marianna Maksimovskaya: Does this mean that Lenin’s body may be removed from Red Square and buried in a cemetery in the future, but you are not going to advance this initiative of momentous importance for the country?

Dmitry Medvedev: I didn’t say that. I don’t know how things will play out, because it is a very delicate issue for us. Different generations in Russia have different attitudes to our state symbols. It may be unfortunate that they became symbols at some moment in our history, but we must respect them. As for what and when will happen, time will show.

Marianna Maksimovskaya: You have created a certain degree of intrigue now.

Dmitry Medvedev: That is OK: you ask the questions, and I create the intrigue. I think that we have divided our responsibilities very well.

Marianna Maksimovskaya: Thank you.