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Vladimir Putin: First of all, I want to once more thank Mr. President for the invitation and the hospitality that we felt here literally from the first minutes we arrived on Mexican soil. Mexico and Russia are indeed linked by ties of traditional friendship. Today’s talks – and here I agree with the assessment that the President made of these talks – confirmed our common readiness to develop relations between Mexico and the Russian Federation. We just signed a joint Russian-Mexican statement, which reflects the concurrence, or the closeness, of our position on the main problems of the modern world. Other bilateral documents were also signed – you witness their signing. I would single out the Agreement on avoidance of double income tax, and also the Agreement on cooperation in the banking sphere, which in my view should create a sound legal basis for the development of economic ties.

We attach great significance to cooperation in other spheres as well: in the sphere of fighting crime, and in the cultural sphere. Today a great deal of attention was given to all these areas of our cooperation. We expect that these documents will create a good legal basis for the development of our cooperation. During the talks we also confirmed our common desire to assist the process of forming an effective system of international relations. We talked on this matter a great deal. I stress once more: everything that concerns building an international system of security, everything that concerns priorities of creating a modern architecture of international relations – all this, essentially, is adhered to by our Mexican colleagues, and their Russian friends. We have a common position. And we intend to uphold this position on the international stage, and in the UN Security Council.

We believe that the role and significance of the UN as a universal tool for maintaining peace and security should be strengthened. We also talked about how to do this, and talked about improving mechanisms. Of course, we gave a great deal of attention to the situation in Iraq, and talked about prospects for passing the UN Security Council resolution on Iraq, which as you know is now being actively discussed in the Council.

Mr. President named the areas of our cooperation in the economic sphere, and outlined several specific projects. I would like to confirm that we will do everything to ensure that these projects are supported by the official authorities of the Russian Federation, and by the Russian Government.

I would also like to note that our contacts in the economic sphere are not restricted to these specific projects. We will look for other spheres for applying our efforts. I am certain that given the two parties’ desire to develop our cooperation, we will find them.

I would also like once more to thank Mr. President not just for the invitation, but for the nature of our discussion today. In conclusion, I would like once more to repeat my invitation to the Mexican President Mr. Fox to make an official visit to the Russian Federation at a time that is convenient for him.

Thank you.

Question: Russia and Mexico have been linked by bilateral ties for around 130 years. Today the Russian President has visited us. What does this special interest in Mexico consist of? Also, I would like to know more about the agreements in the area of manufacturing transport with large carrying capacity. Did you discuss possible reductions in world oil prices, and could you tell us a bit more about possible export of natural gas to Mexico? When can we expect specific steps in this direction?

Vladimir Putin: Your question is very complex. Would you like me to make a report on the development of Russian-Mexican economic ties? I will try to answer very briefly.We have a traditional interest in Mexico, and it is based on Russia’s interest in Mexican culture. We talked about this in considerable detail today with our colleagues during talks. The interest in Mexico does not of course just come from the popularity of Mexican soap operas in Russia, but rather by the growth of Mexico’s economic potential, the strengthening of its sovereignty on the international stage and the international authority of your country. All this makes Mexico an attractive partner. Furthermore, and most importantly, Mexico is showing stable economic development. Currently, Russia has a small but already significant economic exchange with Latin America in general: it is slightly over $6 billion. The exchange with Mexico is small – I think it is several hundred million dollars – but the possibilities are very extensive. The specific projects that your President talked about and which you mentioned now – building a factory of automobile goods transport or repairing Russian aviation technology, such as helicopter – these are interesting but small projects, and we will try to support them. This is a subject for commercial talks. But I repeat that for its part, Russia supports these projects.

But there are other projects that may be of a much greater scale. Our companies are already working on the Mexican energy market, and have taken an active part in the sphere of electrical energy in realizing two energy projects – the construction of two electric power stations. One of our companies has won a tender together with its other partners in the international consortium on building another electric power station in Mexico. An agreement for delivering nuclear fuel to Mexico was signed last year. I believe that this is a good start for full-scale cooperation in the sphere of peaceful use of atomic energy, in the sphere of nuclear energy.

Finally, there are the raw energy materials of oil and gas. As our partners told us today during talks, Mexico only uses 18% of its potential for mining oil. It is a very promising country as far as Russian cooperation in the sphere is concerned. It seems to me that Mexican and Russian specialists are interested in developing this cooperation. I am not talking about the possible and planned deliveries of liquefied gas from the Far East of the Russian Federation, where in 2007 it is planned to open major liquefied natural gas enterprises. Talks are currently underway on delivering liquefied gas to the seaboard of the U.S.A. and Mexico.

But even more interesting and promising is the possibility of joint work of Russian and Mexican specialists on the entire cycle of geographical surveying, mining and transport of energy resources. This concerns both oil and gas. I don’t think that anyone doubts that Russian gas operators are world leaders in their field. And we really could provide assistance right along the technical chain. This, I repeat, concerns geographical surveying, mining, and deliveries of the necessary equipment. The ultimate goal of this cooperation is to create a local gas industry in Mexico. This is already large-scale cooperation, which is worthy of our countries.

Finally, we have prospects in military and technical cooperation, and the first steps have been made. We hope that they will continue to develop in future. Our position is that any country, including Mexico, is interested in diversifying its ties in this rather sensitive area of cooperation with other countries. This is an incomplete list of the areas in which we could, and I hope will, develop relations.

Question: Mr. Putin, this is your second visit to Latin America: you visited Cuba several years ago. What place do you think Latin America now occupies in international relations?

Vladimir Putin:Traditionally, the Soviet Union had very friendly relations with the entire continent. Because of the well-known events at the beginning of the 1990s, when we were forced to mainly deal with our own problems, we did not have the time for Latin America. But now, I am convinced, taking into account the potential of Latin American countries, taking into account the growth of their economic potential and weight on the international stage, Russia does not have the right not to give this area of its policy the necessary attention. We will persistently work in this area, and work with all the countries of the continent. I am very grateful to the Mexican President for his invitation. Remembering the long-standing and traditional ties that were established between Russia and Mexico, I would like to hope that this will be a good start for restoring practical activity of Russia in Latin America. And based on what I just said, Mexico could become a good platform for developing our relations with other countries in the region.

Question: Debates are currently going on in Mexico on legislation reforms in the energy sphere. Could the lack of results of reforms become a hindrance to possible Russian capital investment in this area?

Vladimir Putin:We talked about this today during our talks. I am of course not familiar with the details of Mexican legislation in this sphere, but judging from what I heard, one could say that legislation in this area is more liberal in Russia. The entire energy sector – this concerns oil – is practically private owned. As for gas, there are only restrictions on transport, and on mining. There are no restrictions for private capital, but I understand the Mexican government. This is one of the foundations that the Mexican economy stands on, and one needs to act very carefully here. Any investment, especially major investment, is always studied by investors from the point of view of the current legislation. I don’t think that the debates that you just mentioned, the possible changes in Mexican legislation that are currently being discussed, could affect our cooperation in any way. Furthermore, the more liberal it will be, the better for potential investors, given appropriate guarantees of these investments from the Mexican government. In this sense Mexico, in our view, is a reliable partner. At the moment I can tell you for certain that our main energy companies, including Gazprom, which has just established its first contacts with partners in Mexico, are showing an interest in the development of this cooperation.

I would also like to add that it is also understandable that our cooperation with Mexico in the energy sphere, in my view, is extremely important not just for both countries, but also for the international energy market, given that both Mexico and Russia are major manufacturers and exports of raw energy materials. We do not sign any cartel agreements and are not members of OPEC, and we are in constant contact with each other. The Mexican President and I exchange information quite regularly about what is happening on international energy markets, and we often talk on this issue by telephone. So the more closely our specialists work together, the better effect this will have on the state of our economies, and this will create the necessary stability on international energy markets. I do not doubt this at all. Given what I just said, Russia and Mexico’s plans in the energy sphere should be interpreted in an exclusively positive light not just in our countries, but in the international energy community.

Question: Mr. Putin, what is your position on the situation in Iraq and Afghanistan? And what should be done with the occupying forces? What is your position on the new resolution on Iraq?

Vladimir Putin:I will start with Afghanistan. The situation there remains quite difficult, but in my opinion, due to the fact that the international community was able to develop a common approach to solving the problem of Afghanistan, it is developing positively. We very much hope that President Karzai will be able to strengthen the central government, and strengthen the military forces and law-enforcement forces. We hope that he will be able to make the necessary steps to strengthening his country’s economy, with the support of the international community. And, as you know, elections are planned there. We hope that they will have a positive result. Russia will assist in any way it can.

There is a problem that worries everyone – the growth of the drug threat that comes from the territory of Afghanistan. Unfortunately, after the Taliban regime was finished, things did not get any better there in this area – on the contrary, they unfortunately became worse. The amount of heroin grown there increased, that goes to European markets, to the Russian market, to the American market, and there is now more heroin that comes from Afghanistan. And this issue needs to be discussed with the Afghan leadership, and a solution needs to be found to this problem.

As for Iraq, things are more difficult there, unfortunately. We know the extent of this problem, and that people die there almost every day. This cannot help but worry us.

I want to stress the special role that Mexico played in discussing this problem. I am not saying this for eloquent effect, not because I am your guest and want to say pleasant things to my hosts – this really did happen from the very beginning of discussion of this problem. While Mexico was working as a non-permanent member of the UN Security Council, it took its own position there, maintained it to the end, held consultations with all members of the Security Council including Russia. We intend to continue to consult with Mexico, regardless of whether it is a member of the Security Council or not. In my opinion, the U.S.A. is currently taking active steps to normalise the situation. The resolution that was submitted to the UN Security Council has now undergone significant changes. It has been changed during discussion of certain statutes. In my opinion, it has changed for the better. I think there are every grounds to expect that this work may have a positive result, if it will continue to take place in the spirit of the cooperation that has now been established in the UN Security Council.

As for what should be done with the occupying forces, I think I can answer this question.

Occupying forces in general, and troops in particular, should as quickly as possible create conditions under which they can leave the territory of the occupied country. Conditions need to be created as soon as possible so that the Iraqi people can take full responsibility for their destiny into their own hands, and can take charge of their national riches, such as oil. I am absolutely certain that Iraq is not a country that has had its rights removed. If we are talking about restoring democracy in this country, then the most direct manifestation of democracy is organising direct secret democratic elections, which would form a legal government for this country. The sooner this happens, the sooner we will be able to say the that final phase of regulation of the Iraq problem has begun.

Thank you.