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Question: One of the most widely debated topics today is your initiatives to strengthen the power structure. Many see it as another attempt to “tighten the screws”. What kind of power structure would you like to see in Russia?

Vladimir Putin: A government that delivers results, which means that it is strong. Otherwise it is not a government, but an insult to its people. It is another matter what kind of strength it should have and what ends it serves. If the government is committed to “building” society only by imposing restrictions and bans while ordinary people try to keep out of its way – such a government is worthless. If the government is open and predictable and uses its power to uphold the dignity of its citizens, their freedoms, security, right of choice, if it enables people to securely and honestly earn a living – then it is a truly effective and strong government.

In general it is very much a Russian tradition to vilify the government, to fear it and not to expect anything good from it. Our historical memory is full of fears. But it would be simplistic to say that the fear of a throw-back to the old order is based solely on past experience. A good many young people who have just stood up on their feet are worried about rumours of another redistribution of property or a revision of privatization results. I can understand their fears. Endless changes of government, unstable property relations and contradictory laws – all this is not conducive to normal business development in the country. On the other hand, while the state was “loosening the reins” in the economy, tax evasion and other forms of abuse have become widespread. As a result, many entrepreneurs today find themselves in the “risk zone”, facing potential trouble with the law. No wonder they are nervous.

The question arises, what can be done about it? It would hardly be fair to put all the blame on the citizens and to pretend that the government is not responsible for this state of affairs. That is why we began by introducing measures designed to dramatically improve the business climate in the country. I am referring above all to the bills on taxes and deductions into off-budget funds that we have introduced. Their adoption would usher in a fundamentally new stage in the relations between government and business, marked by conscious mutual responsibility and mutual obligations. The state is introducing a flat 13% income tax, which makes business extremely lucrative and creates maximum transparency. In return, it is entitled to expect that entrepreneurs play by the rules.

Question: How do the presidential bills on the administrative reform fit into that pattern?

Vladimir Putin: You should not confuse administrative reforms and the reforms aimed at strengthening the Federation. The former are just a small part of the latter. As for the so-called “federation package,” it is fully in keeping with the logic of setting rules because each body of federal or municipal government must have not only rights, but clear responsibilities. I can cite any number of facts to prove that the state we live in is still a long way away from an ideal federation. Indeed, how do you account for the fact that some regions have been passing legislation to introduce special rules for the entry and stay of citizens or to ban the export of certain products to other regions? In some cases indigenous population was granted a special status compared with all the other Russian citizens living in the same region. And all this is taking place not in the Middle Ages or in the era of serfdom. We must urgently restore the balance and normal interaction between different levels of government.

Besides, there should be no more “politicking” within the government system, when some branches of power try to gain advantages over other branches. It is not right when the interests of the state take second place while corporate or personal ambitions come to the fore. It looks particularly odd when something like that happens within one branch, as is presently the case between the Federation Council and the State Duma.

I see nothing wrong with the heads of regions behaving like big-time politicians. But truly responsible politicians would not resort to every trick in the book to dodge compliance with Article 77 of the Constitution. The article speaks about a “single system of executive power”. And the heads of regional administrations in turn have problems with the mayors of cities who have also been popularly elected and would not yield an inch of their ground and freedom in exchange for effective mutual cooperation in the regions.

Question: Today the governor is the king in his region. Moscow is far away and everyone – from ordinary people to big businessmen – has to go cap in hand to the local administration to have their problems solved. You want to change this setup. How far are you prepared to go? And anyway, you cannot control everything that is happening in the regions, even though you have the plenipotentiary envoy and his deputies there. You have made everyone fall in line, you have scared everyone. What comes next? That’s my first question. And the second question. Are you sure that the plenipotentiary envoys will fulfil their function as intended after a few months in office?

Vladimir Putin: Quite a handful of questions there. And it looks as if you already have the answers to them. Well, let us take them one by one. First, it would not be correct to describe the heads of regions as kings. One should not forget that they bear a heavy burden on their shoulders: a huge responsibility and a daunting amount of day-to-day work. It is normal for people to turn to them to have their problems sorted out. But I do want to change the situation when Russians living on the territory of a constituent part of the Federation today are more “regional subjects” than citizens of a single country.

We have been confronted with this situation all along: from problems with obtaining passports in certain republics to delayed payment of wages to public sector employees. Moreover, there have been a lot of instances, even in the recent period, when economic freedom in the regions has been strangled. Regional business has been divided among “the old boys” and the press and “free” non-governmental organizations are hounded and are constantly being watched by the local leadership.

You should entertain no illusions: in all such cases the local governments are “tweaking” or limiting the constitutional rights of citizens while cleverly putting the blame on the higher levels of government. So, as soon as we really set about putting the relations between levels of government in order we heard voices screaming: Are you going to run everything from the center again? The answer is no. But nor do we want to see arbitrary and uncontrolled local bureaucracies. I recently asked the Chairman of the Constitutional Court why rulings on violations of federal laws in the regions meet with such heavy going. And he replied that implementation mechanisms are lacking. There is some logic to his approach: why try to take any measures if you know in advance that they will sink in the sand anyway. But we must take action, immediate action. We want to rectify this intolerable situation and ensure that decisions are strictly complied with. It is an undeniable fact that there is a deficit of effective government in Russia.

Now about the President’s plenipotentiary envoys. You are right that a lot depends on their personal qualities, on how they build their relations with the governors and how firm they are in upholding the interests of the state. There are sure to be a lot of hidden snags and open conflicts down the road. As for your doubts that the envoys would continue to fulfil their function, I see no grounds for such pessimism. If you feel that they may bridle up and turn surly and officious – that is just not acceptable. The heads of regions are vested with broad powers under the law and the President’s envoys have no right to encroach on them. Their spheres of activities are legally delimited. The main thing is that the creation of federal districts has brought the federal government closer to the regions and their problems, rather than the other way around. And of course federal powers are to be restored to the federal government. The heads of regions are experienced battle-tried people who have lived through a lot of conflicts, including with federal officials. So, in their dialogue with them the plenipotentiary envoys will need great skill and will have to produce convincing arguments, which is actually what they are already doing. But I would like to stress again that we will tackle all the problems together. Neither the President, nor the governor, nor the plenipotentiary envoy can improve the situation single-handed.

Question: In beefing up the bureaucracy and superimposing it on the bureaucracy of the governors are you not supplanting the institutions of civil society with bureaucratic entities that will crush whatever elements of a free civilized state we have? What makes you so sure that these state bodies will not exceed their remit?

Vladimir Putin: Why should they “crush” everything or “exceed their remit”? Do you seriously believe that a bureaucrat vintage 1990 and a bureaucrat vintage 2000 are so much alike? I am aware of the fears that overzealous activities to restore order would lead to a “tightening of the screws”. Well, a strong and effective state cannot and must not infringe on civil freedoms. It is not right when the policy of restoring order is seen as a chance to increase the arbitrary rule of the bureaucrats, when customs and tax officials and border guards treat citizens with contempt, insult them and make people’s lives miserable by ungrounded fault-finding and suspicions. Russia must not and will not be a police state.

But there is another problem. Because the government has been paralysed due to internal contradictions we have perhaps the freest society in the world. Unfortunately it is also free from law, order and morality. Many were quite happy with this state of affairs because they stood to gain from it. Now that the “sweet life” has ended and we have passed on from talk to actually restoring order we hear screams about a threat to freedom and a threat to democracy. But are there any grounds to be alarmed? I am sure there are none. However until recently there were serious grounds for a different kind of fear, namely, that “boundless freedom” would eventually crush the state and its citizens and will reduce to zero the very free and democratic society which has been advocated by just about everyone. Let us be realistic. Democracy in Russia was handed down from the top. That is one point. Within a historically very short space of time we have dramatically changed the whole political and social-economic system. That is the second point. The reason we did it quickly was that freedom and democracy were introduced by laws and even decrees. Sometimes they were far ahead of society’s ability to adapt to these freedoms: historical imperatives simply gave us no chance of an evolutionary development. We had neither time nor resources to spread out reforms over decades and wait for cardinal changes to take place in society and in people’s minds. Nobody gave us such a chance and nobody ever will. We have the people, the economy and the civil servants that we have, and we have no other. But there is an obvious potential for the state to become more effective and more workable.

Question: In the Address to the Federal Assembly you reiterated the thesis about a strong and effective state which has the right to demand compliance with the new rules it has established. To whom will these demands be addressed: to ordinary citizens, bureaucrats, or oligarchs? And are you sure that the state already has the moral right to do it?

Vladimir Putin: These processes can only develop in parallel. The state must improve itself, the mechanisms of its own work and, if you like, it should educate the civil servants by providing them with certain opportunities while imposing certain limits. But by the same token, it should itself behave in such a way as to earn the right to exact compliance with the rules that the state casts in the shape of laws. I am absolutely convinced that these processes should proceed in parallel and should complement each other. Yes, I feel that the state already has the moral right to present higher demands to itself and to all the citizens. The state is already meeting some of its obligations, though I would not yet describe them as achievements. For example, the state has always declared the need to comply with the macroeconomic budget targets, which form the backbone of the economy, and it has been meeting these targets. For the first time since the start of the reforms, we have a balanced budget and our incomes exceed expenditure. The state has promised to take more energetic measures in the spheres that have to do with business: taxation, putting the economy in order – and it is keeping its promise. Whether you like it or not, the state sticks to its decisions… All this entitles us to expect that all the other parties involved in the strengthening of the Russian state will act in the same way.

Question: But you have admitted in your Address that the rosy economic picture is due mainly to external factors: high oil prices and a favourable world market. So, it is still too soon to attribute these achievements to the new effective state.

Vladimir Putin: Yes, external factors are favourable and we are taking advantage of it, as I have said openly. On the other hand, the state has been implementing consistent, steadfast and conscious measures, in particular to meet its social obligations. We have been fulfilling them scrupulously. However, we are careful not to take on more and more obligations without weighing them up carefully. Yet we could perhaps afford it because the government has some revenues. We are not after cheap and short-lived popularity. We are trying to put in place favourable conditions for economic activities in order to create opportunities for the development of industry and the economy as a whole.

Question: The trouble is that there is a huge gap between awareness of the need to build an effective state, which the President has declared in his Address, and the real state in which ordinary people have to contend on a daily basis with traffic police, sanitary inspectors or bureaucrats issuing licenses.

Vladimir Putin: I absolutely agree with you. The Address does set goals that we should seek to achieve. The alternative is to do nothing. One could earn popularity by steering clear of confrontations and being all things to all men. But I think that is not an option. If I adopted that stance I shouldn’t have come to the Kremlin and should have done something else. To do nothing while remaining a political innocent? For whose benefit and why? If I have some doubts I am prepared to exercise the greatest of care before I leap. But if I am confident that my measures are justified I will act energetically. Talk to economics experts. For years they have been saying that on the whole they know what needs to be done. What has been lacking is the will to do it. In my Address I spoke about promoting economic freedom. What is wrong with that? Economic freedom must be protected in real life instead of paying lip service to certain ideas. If we speak about reducing the tax burden we must argue our case before the deputies of the State Duma and members of the Federation Council.

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Let me reaffirm that today we know what needs to be done. All that remains is to act. And as you see, we are proceeding carefully, but still we are moving forward.

Question: How much resistance do you encounter?

Vladimir Putin: Tremendous resistance. We do not use unconstitutional methods. If something is within the authority of the executive branch we issue a presidential decree or a government decree, but many issues can only be settled in the framework of existing laws. So we have to go to the Duma.

Question: Are you sure that you will overcome all these problems?

Vladimir Putin: I am sure that we will successfully tackle a large part of the challenges facing the country.

Question: What are the social forces that support you?

Vladimir Putin: The multinational people of Russia. And those who resist will use every opportunity to discredit our actions. Moreover, sometimes businesses are trying to settle accounts among themselves by enlisting government bodies and law enforcement bodies on their side. That must be stopped. Otherwise these actions will continue to exert their pernicious effect. Certainly no one is guaranteed against making mistakes and they too will have the effect of reducing the base of support. But I never forget what I promised at my inauguration: to work openly and honestly. The best defense is to explain all your actions, so that every citizen understands them. I doubt that people are unable to put two and two together. In fact I am sure they will understand everything. They do not live on Mars, they live in Russia. And that is why I expect that the support will remain.

Question: The most traumatic and controversial problem for society today is, perhaps, Chechnya. How quickly will that problem be solved?

Vladimir Putin: You need haste only when catching fleas. In addressing such large-scale problems as we have in the North Caucasus one must be patient and proceed in a careful and weighed manner. The price of a mistake may be too high. To me, and to many people with whom I have talked in Chechnya one thing is clear: Chechnya cannot become independent outside Russia. In this case it will become a target of expansion by extremist forces. This is unacceptable for Russia because by becoming a target of expansion Chechnya instantly turns into a bridgehead for an attack on Russia. As soon as we slacken our efforts and our actions we will see this effect multiplied. We have been there before. So I am absolutely convinced that the problem must be solved where it arose. If we allow it to grow we will not only destroy our state, but will cause direct and irreparable harm to all the peoples inhabiting the Russian Federation. So, hard though it may be, the problem must be tackled on the ground. It will take some time. Let us face it, in the last ten years almost a whole generation has grown up in Chechnya in a violent environment. The solution of that problem calls not only for military action, but for a large-scale social rehabilitation programme, an effective political process, for resources and certain sacrifices. It is necessary to bring home to everyone: either we solve the problem today or we hesitate again, withdraw and before long will again face the same problems, only there will be many times more casualties.

Question: To go back to the question of the social forces that support you. In addition to poor roads Russia has another eternal problem. The problem is broad and serious and it is that of human resources. Are there enough people to implement decisions, to properly understand the new tasks that you are setting as the national leader?

Vladimir Putin: I think Russia has never been short of talent, of gifted, energetic people with broad horizons. There is a problem with government officials adapting to the fast-changing conditions of the civil service. We need programmes to upgrade officials’ competence. Such programmes have been proposed and some are already underway.

Question: However, many prosecutors and law enforcers still contemptuously refer to businessmen as members of cooperatives. The habits, skills and attitudes of “advanced socialism” are deeply ingrained. This gives rise to fears, especially in the light of the recent events involving business – confiscation of documents, searches, criminal cases, “rewriting” – that the state might cross the invisible line. These fears cause people to appeal to you as the highest arbiter. Are you sure you know where the line needs to be drawn?

Vladimir Putin: We all want to live in a rule-of-law state. Every official, including the President, has functional duties and rights. Why do you think that I intend to move outside the legal framework and tell the prosecutor’s office, which is independent, what it should do? I have no right to issue such directives under the law.

Question: You appoint the heads of law enforcement bodies and recommend the candidate for Prosecutor General. So you are responsible for the actions of these agencies.

Vladimir Putin: I appoint members of the government. As for the Prosecutor General, I submit the candidacy to the Federation Council, which in turn appoints him. From that moment on, unlike other officials, the Prosecutor General is not subordinate to me. I can issue directives to the Minister of Internal Affairs, the Minister of Justice, or the Director of the Federal Tax Police Service. But not to the Prosecutor General. In fact, the Prosecutor General’s Office is in a unique position. But the President as the guarantor of the Constitution must watch the overall situation in this sphere. And if I see that law enforcement bodies, motivated by their professional or caste or other interests, are strenuously seeking to achieve what they consider to be positive results but what actually impedes the solution of the tasks the state pursues in the economy and in developing democratic institutions, I will use all the means at my disposal to change the situation. But I repeat, I believe that I only have the right to act within the limits set by the Constitution. As for business, I am prepared to repeat that those businessmen who try to usurp the functions of the state or gain privileges due to a “special” relationship with the authorities will have to forget about it. The law is the same for everyone. It is not right when the scope of rights is proportional to the size of the capital and property.

Question: You have spoken about the first three branches of power. But in democratic countries the mass media is the fourth branch. Does this principle fit into your idea of an effective state? Do you see the mass media as “the fourth estate”?

Vladimir Putin: Not as a power branch in the classical sense. But as a key element of democratic society – yes.

Question: What is the media to you: a channel to transmit information from the state to society or an opportunity for society to express and get across its opinion?

Vladimir Putin: It provides an opportunity for citizens to freely express their thoughts, promote ideas and seek to implement them. This is the key function of the mass media. The conflict between the government and the media is imagined. Attempts are being made to attribute this conflict to us and to divert our attention from the legal side. I think it has much to do with the subconscious fears of the owners of media empires as representatives of the Russian oligarchy: They are more concerned about preserving their influence on the government than about freedom of speech or the press. There are some talented and original people in the media. I would say, they have been endowed by God. It is the fault of the state that it has not created mechanisms to make this business self-sufficient. Now it should make it possible for people to work independently. I think if the state really wants to see an independent media, a democratic instrument of social development, it should offer certain preferences to that market segment. Today we see that it is not a very lucrative business: The costs of paper and printing services are quite high. Many still have to print their publications outside Russia, for example, in Finland or Germany. That must change, we should make the media truly independent. Then the media will come to reflect real life and not the life as seen by those who commission the articles.

Question: In your Address you said that we have “shared values that unite us.” Will you try to implant a new national idea in society?

Vladimir Putin: Only inventors and intelligence agents do any “implanting.” But seriously, many lances have been broken over the issue of the national idea. There are objective reasons for this: the country has lived amid fierce political battles for ten years and many have felt that a national idea was a panacea that would end interminable quarrels and arguments. The government failed to explain to the people convincingly the implications of the ongoing changes for the country and for each individual. All the words were uttered: freedom, democracy, a free market. But what stands behind the words? Copies of advertising spots from Western media or perhaps shining shop windows? Or something else? For a long time the popular mind has been exposed to this “advertising-package” propaganda. I believe that inventing or, as you put it, implanting a national idea is a futile and meaningless thing. It cannot be invented. The morality and ethics of a people are shaped over centuries. Russia, like any self-respecting state, has the basis on which we can build our moral edifice, so to speak. But to this end we must strengthen the state, the economy and democratic institutions, including the free press. Our society has greatly matured. People change and their views change. I am convinced that the outlines of a new national ideology are emerging. If society, the people themselves are prepared to follow basic common goals – that would mean that the ongoing reforms will have succeeded.

Question: How do you see yourself? Perhaps as “the father of the nation” responsible for close on 150 million people?

Vladimir Putin: I feel like the father of two children – I have two daughters. At the Kremlin I am a top-ranking official whose decisions make a difference to the life of the state today and in the longer term. I have an immense feeling of responsibility for these decisions and I would like to see the fulfillment of the tasks I set myself when I decided to run for President. I love our country very much. That feeling became even more poignant after I have traveled to the regions. Our people deserve a better deal than they have had up until now.

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Vladimir Putin: I have prepared some figures for this meeting. Economic growth in the first quarter has exceeded 7%. We see growth in practically all the sectors and regions, with the exception of seven regions. The federal budget surplus in the first six months of the year is 1.6% of the GDP. Export is up 43.5%. Russia’s foreign currency reserves have reached the 21.7 billion mark. All this has made the economy more oriented toward social issues.

As regards federal debts, we have repaid our debts in the public sector and reduced them nationwide from 15 billion to 6 billion. Pensions have been raised 4 times since August of last year, which adds up to a total of 77% We have been paying off debts and getting practically no support from the IMF. This year we received nothing and paid off 4.3 billion dollars. Unemployment has dropped substantially from 1.5 million to 1,069,000 people.

Question: How big a share of the credit for all this do you claim as Prime Minister and then the President?

Vladimir Putin: This is the result of teamwork.