Official website of the President of Russia

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Question: What is your opinion of the documents you have just signed?

Vladimir Putin: We have a very high opinion of these accords. In fact, they lay a solid foundation for long-term cooperation in the energy sector, which is one of the key spheres of both our economies. On the one hand, they provide a sequel, as it were, to our agreement on the Caspian, but they also have a significance of their own.

We believe that the agreement fully corresponds to the interests of Kazakhstan and Russia. To Kazakhstan because it guarantees the pumping of Kazakh oil considering its growing output. That is good for us too because it consolidates Russia’s status as a transit country. Moreover, I can say that the plans that Russia has to develop the transport infrastructure will now be made with due account of the reserves and needs of Kazakhstan. In that sense Kazakhstan is becoming our main partner in determining the priorities in the development of the Russian infrastructure.

Let me explain. The agreements signed today deal above all with existing routes in southern Russia. But we have agreed with our Kazakh colleagues that Kazakhstan’s needs will also be taken into account when building the second part of the Baltic transportation system here in the Leningrad Region and in pursuing our projects with our partners in Greece and Bulgaria. That summarises the oil situation.

The second and no less important agreement is a milestone, especially for Russia. I am referring to the creation of a gas enterprise. I see this as a follow-up to the agreement and statement on cooperation in the gas sphere made by the four heads of state in Almaty some time ago. It means the implementation of that statement on a bilateral basis.

For Russia it signifies a qualitative policy change in this sphere. You know and experts certainly know that in recent years Russia has been relying mainly on its own potential. It has not always been easy for our partners to use Russian pipeline systems to sell their commodities in the CIS and west European markets.

In the relations with Kazakhstan we are moving to a different format of cooperation. Kazakhstan is becoming a major and full-scale participant in that process and in that business. That fully meets the interests of the Russian Federation because it guarantees the necessary volume in the long-term perspective. It is also in the interests of Kazakhstan because it is able to promote its products in external markets. We are talking about a fairly large volume, 3.5 billion cubic metres of gas, but we proceed from Kazakhstan’s potential to develop its gas sector and we set the target at 30–50 billion.

Nursultan Nazarbayev: Mr Putin has practically said it all. I can just add some specifics. During two months we have achieved colossal agreements in the sphere of economic relations between Kazakhstan and Russia, more than we have achieved during the 10 years of independence. I don’t think any other CIS countries have such agreements. First, we have finally resolved the issue of dividing the Caspian seabed on the basis of a median line equidistant from its shores. They cover three fields which are being divided on a 50–50 basis. It is a long-term contractual job. Today the relevant agencies have signed an agreement on the transportation of 15 million metric tons of oil annually through Russian pipelines over 15 years with a possible extension if neither side has any questions.

Three or four years ago when there were suggestions that Kazakhstan wanted to abandon Russia in favour of the Baku-Ceyhan pipeline, I told journalists: “Why doesn’t Russia want to pump Kazakh oil through its pipelines?” Now that issue has been addressed.

The second question is the creation of a joint enterprise by Gazprom and Kazakhgaz. At present we are talking about the Karachaganaksk field with reserves of 3–4 billion cubic metres. But in 8–10 years’ time when Kazakhstan brings its oil output to over 100 million metric tons, accompanying gas will reach a volume of more than 80 billion cubic metres. If that gas goes via Russia as a continental state, it is good for Kazakhstan because it will give it access to the world gas markets. And Russia will earn dividends from transporting gas and oil through its territory. We are about to sign an agreement on the Ekibastuz hydroelectric power plant GRES-2, a 50–50 joint venture. Next we will sign an agreement on the transmission of power to external markets. Rather than exporting trainloads of coal we stand to gain much more by selling electricity, and it is very good for the environment. In the fourth quarter we hope to achieve agreements on railway transport. Thus, our agreements elevate the economic relations between Kazakhstan and Russia to a new level. Trade and economics provide the basis of relations in all the other areas. Proof of that is the creation of the EurAsEC during Vladimir Putin’s presidency. Today we have finally decided the issue of the Shanghai Organisation. In other words, the economic and political component of our relations is elevated to an entirely new level.

Vladimir Putin: I would like to emphasise a point to confirm what our colleague, the President of Kazakhstan, has just said. I want to make things absolutely clear so that there are no doubts left.

The level of interaction and the quality of partnership between Russia and Kazakhstan are acquiring an unprecedented character. It is exerting and will exert far-reaching influence on the interaction of the two states in the long term. And on our position in Europe and the world. What we are signing today will without any doubt have far reaching consequences for the energy policy in Europe at a minimum, and I think actually in the whole world.

Question: Are there plans to expand the Shanghai Cooperation Organisation? Will we see new members admitted to this organisation in the short term and what requirements should they meet in order to qualify for being members of the SCO?

Vladimir Putin: The Shanghai Cooperation Organisation is not a bloc and it is not a closed bloc. Theoretically, anything is possible. At present the issue of expansion is not on the immediate agenda because we have just created the current organisation and have signed the statutory documents. It should start working first before the members of the organisation will be ready for its expansion.

As regards the requirements for possible new members, they are known. They are set forth in the founding documents. All those who share the principles spelled out in the Charter are eligible to become members. I repeat, the issue is not currently on the agenda.

Question: Mr Putin, who proposed the idea of holding the SCO meeting in St Petersburg?

Vladimir Putin: We met in Shanghai a year ago and during an informal talk Chinese President Jiang Zemin recalled that the next summit was to be hosted by Russia. He said it would not be a bad idea to hold it in St Petersburg, and I happily agreed.

Question: Mr Putin, what do you consider the priority areas in the work of the SCO?

Vladimir Putin: We discussed all the priorities today. The media had a chance to follow our work closely. I can repeat that the Shanghai Cooperation Organisation is a multi-purpose structure which concentrates on political and economic issues. We have also discussed humanitarian aspects, public health, education and culture. Coordination of law-enforcement activities in fighting crime, including across borders and terrorism, will get its due share of attention.

Nursultan Nazarbayev: The documents are transparent, they will be published and you will be able to see them. The first component is security, including the fight against terrorism and drug trafficking. The second component is trade and economic cooperation. And the third is cultural cooperation.

As regards accession to the organisation there are three institutions: the institution of observers, the institution of attendees and full members. The CIS and EurAsEC do not have it, and it will not be easy to gain admission.

The state wishing to join must have observer status and accept all the terms, because it is a more rigorous organisation which acts under more rigorous agreements. There is even a provision whereby members can expel a member by a consensus for systematically failing to comply with the Shanghai Organisation agreements. That is an important point.

Question: Mr Putin, what other measures is Russia going to take to prevent the conflict in Pakistan and can Pakistan ever become an SCO member?

Vladimir Putin: You probably meant to ask what efforts can Russia exert to end the conflict between Pakistan and India, and not in Pakistan?

Journalist: Yes, of course, I am sorry.

Vladimir Putin: I spoke about it in Almaty. We are in contact with our partners in Europe and North America. We are in constant dialogue with Pakistan and with the Indian leadership. As you know, I have invited President Musharraf to visit Moscow and we are working out the date of the visit through the Foreign Ministry. I am due to pay an official visit to New Delhi this year. Obviously, in both cases the situation between India and Pakistan will be an item on the agenda.

However, I think the main responsibility for scaling down the confrontation rests with the two states. And if we recognise that the roots of the conflict are connected with terrorism, we must call on the leadership of Pakistan above all to put an end to the terrorist activities that are launched from its territory against India, in Kashmir, and to do everything to make society in Pakistan transparent, democratic, predictable and understandable.

I have grounds to believe, especially after the last meeting with President Musharraf, that he personally is committed to working along these lines. I very much hope that it will be done in practice.

And there has been an important signal from President Musharraf. He said he was ready to consider extraditing international terrorists who are not citizens of Pakistan, who commit crimes on the territory of India if they are arrested in Pakistan and their guilt is proved. I think that is a show of goodwill and I hope that these signals too will be heard.

Question: Can you see the SCO gradually replacing, in the security field, the structures that exist within the CIS? Can a non-Asian country, for example, the US, seek to join this SCO?

Vladimir Putin: Of course, anything can be imagined. Such talented people as media representatives can imagine things we have never even dreamt about. But what you have said is not our target. The Shanghai Cooperation Organisation and we, the leaders of the states which have founded it, do not set the goal of replacing or ousting anyone. It can and must complement the existing mechanisms of conflict resolution and create a favourable atmosphere in various parts of the world. Considering the geography of our countries, its prime concern is problems in Asia. I very much hope that the corresponding CIS structures would complement all these efforts.

As regards references to certain foreign policy moves on the part of the Russian Federation and its partners, including the United States, they were mentioned in the overall context of what is happening in the world. We do not know that the United States intends to seriously consider joining the Shanghai Cooperation Organisation, although we do not rule it out. Our Foreign Minister briefs his counterpart, Secretary Powell, on the work of the Shanghai Cooperation Organisation. I repeatedly said this to President Bush. He knows about it. And you can simply take my word for it, our partners in Europe and in the United States support our efforts in Asia. It is not by chance that when they learnt that I was going to attend the event in Almaty, which was mentioned by the President of Kazakhstan, they reacted very positively. Everybody hoped that I would convey to the leaders of Pakistan and India the concern of all our partners, within the Russia-NATO Council and bilaterally, in particular of our American partners. If we proceed in such a cooperative manner, supporting each other, we will be able to create a new framework of security in the world. I think we are on the right track.

Question: Mr Putin, what do you think about yesterday’s decision by the US Administration to recognise Russia as a market economy?

Vladimir Putin: Naturally, I welcome that decision. It was long overdue, but it took President Bush to show political will for the decision to be taken. Of course we discussed it during the President’s visit to the Russian Federation. I hope that the atmosphere of the visit and the results had something to do with the final decision. The American leaders have become convinced that in Russia they have a reliable partner. They have looked at the realities in our country and took the decision you have referred to.

I repeat, the decision was long overdue and non-recognition of the market status of the Russian economy was not in the interests of the world economy or in the interests of the American economy in my opinion. Why? Because the lack of such a status made it possible to interpret any commercial deal struck by Russian commercial entities in an arbitrary fashion. It meant that our foreign partners faced some objective obstacles in investing in the Russian economy because the fate of goods produced in Russia was uncertain.

Those who know need not be told, but I can explain it for the benefit of the general public. If a country does not have a market economy status, other countries, and I am referring in particular to the United States, can initiate so-called anti-dumping investigations without hearing the other side’s opinion in a practically extrajudicial procedure. This has resulted in blocking the movement of $1.5 billion worth of goods.

But I repeat, it is not only the question of the $1.5 billion. It sends a strong signal to the world business community that the Russian economy is ready for full-scale work and that one can fully cooperate with it. It is a very important decision and we welcome it.

Question: Mr Putin, last year and the year before last you held very large news conferences attended by 500–600 journalists. Is anything similar planned for this year?

Vladimir Putin: How many journalists are present here?

Journalist: 230.

Vladimir Putin: Perhaps that is enough. But if you still have some questions that the media would like me to give more detailed coverage of, I am ready. You can arrange it through the Presidential Executive Office and through the press secretary. If there is a perceived need, we can repeat that event this year.

Today marks the 50th anniversary of the Moscow University journalism department. Are there any graduates of the journalism department here? Let us congratulate all the journalists. I would like to congratulate them and in recognition award the last two questions to its graduates.

Question: Mr Nazarbayev, did I understand you correctly that you have effectively discarded the CIS? You have said: “Thank God, the CIS existed.”

Nursultan Nazarbayev: What I said was, thank God that the CIS exists and that it has fulfilled its role in its time. However critical we may be, it continues to play its role. And the integration associations at various levels are not an alternative to the CIS. What’s wrong with the CIS? The presidents meet and have a good time together (laughter), we talk and sometimes have spirited arguments and calm each other down. Everybody has his say. After all, there must be a place where you can voice your concerns and get them off your chest. And gradually, as you see, more tight associations are emerging within the CIS and in the end something will “pan out”.

Vladimir Putin: I think it was Zoshchenko who wrote: they say that a word is not a bird, once it is out you can’t catch it. Well, with us they chase it down, catch it and jail it. I think you have almost succeeded in catching my friend and colleague at his word, but I don’t think Mr Nazarbayev meant to say that the CIS is dead. I wouldn’t say so.

Nursultan Nazarbayev: The CIS was created in Almaty on December 21, 1991. I am an ardent supporter of all the integration processes, and it is not just politics. I still believe that integration in our region must prevail for our own good. And that will happen in the end. I think it will happen through EurAsEC.

Question: To return to the SCO. Talks are underway on the fringes with India about its possible accession to the SCO. Some time ago, three years, I think, seers predicted that western hegemony would be overcome and balanced out and that peace and tranquillity would prevail in the world when an eastern alliance of Russia, China and India was created. Have you heard anything about such forecasts?

Vladimir Putin: I listen to Mr Nazarbayev and I do not pay much heed to such forecasts. I try to hear my colleagues. I try to hear the deputies of the State Duma and the people of the Russian Federation. As for the forecasts you have mentioned, perhaps some people should heed them, but I must tell you that I am not a believer of such an approach. To speak about hegemony means automatically to engage somebody in a confrontation. We speak about a multi-polar world. We want to see a diverse world. A world where the states respect each other and one another’s legitimate interests, make certain compromises and further their national interests through interaction and not by confrontation. This is the goal we are working towards and these are the tasks we are setting in creating EurAsEC and the Shanghai Cooperation Organisation. I have the impression that we are managing to agree on basic things. I think it will continue to be that way.

As for India, it is true that India has shown an interest in the Shanghai Cooperation Organisation and it is feeling out, and I am using words carefully, the possibility of getting to know the activities of that organisation more closely through the Foreign Ministry. We take a positive view of that. Mr Nazarbayev has said that the SCO envisages different degrees of cooperation. It is for us to jointly decide to what degree we would like to work with our partners which are not members of the organisation today.

Thank you very much. All the best to you.