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President of Kazakhstan Nursultan Nazarbayev and Prime Minister of Italy Matteo Renzi took part in the plenary session.

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Excerpts from transcript of the plenary session of the St Petersburg International Economic Forum

President of Russia Vladimir Putin: Ladies and gentlemen, friends,

I am very glad to welcome all of you to the 20^th St Petersburg International Economic Forum.

To start with, looking at this hall I cannot but recall how such forums began. I cannot but recall that it was initiated by the first mayor of this city, Anatoly Sobchak. Twenty years, or even more, have passed since then. It started as a regional forum although we organised it then as members of the city administration. Today it has turned into a major venue where people can meet, talk about problems and exchange opinions.

First of all, I would like to thank the heads of international organisations, leaders of states, respected political figures and business representatives who responded to our invitation.

The St Petersburg Forum has traditionally served as a venue for discussing strategic issues. Such conversation is all the more important now that the world is undergoing a serious transformation, when deep changes are affecting practically all areas of life.

I would like to take this opportunity to share with you my assessments and thoughts, to tell you how we view Russia in a changing world. And I would like to start with the systemic problems that are besetting the global economy and practically all countries.

True, after the 2008–2009 crisis, we managed to partially balance our financial accounts, limit but not overcome the debt increase problem and make cash flow more transparent and manageable.

However, the structural problems accumulated by the global economy still persist, and we have not yet put our economy on the growth trajectory.

Incidentally, current geopolitical tensions are related, to some extent, to economic uncertainty and the exhausting of the old sources of growth. There is a risk it may increase or even be artificially provoked. It is our common interest to find a creative and constructive way out of this situation.

The world’s leading economies are looking for sources of growth, and they are looking to capitalise on the enormous existing and growing potential of digital and industrial technologies, robotics, energy, biotechnology, medicine and other fields. Discoveries in these areas can lead to true technological revolutions, to an explosive growth of labour productivity. This is already happening and will happen inevitably; there is impending restructuring of entire industries, the devaluation of many facilities and assets. This will alter the demand for skills and competencies, and competition will escalate in both traditional and emerging markets.

In fact, even today we can see attempts to secure or even monopolise the benefits of next generation technologies. This, I think, is the motive behind the creation of restricted areas with regulatory barriers to reduce the cross-flow of breakthrough technologies to other regions of the world with fairly tight control over cooperation chains for maximum gain from technological advances. We have discussed this with our colleagues; some say it is possible. I think not. One can control the spread of certain technologies for a while, but in today's world it would be next to impossible to keep them in a contained area, even a large area. Yet, these efforts could lead to basic sciences, now open to sharing of knowledge and information through joint projects, getting closed too, with separation barriers coming up.

However, the scale of technological, economic problems and the objective situation we are in – their scale and nature suggest that we can develop effectively only together, by building cooperation. We believe that such cooperation can be effectively built as part of a flexible and open integration environment that encourages competition in scientific research, a variety of technological solutions that allow the participating countries to fully employ their competence and their potential. In 2011, with Belarus and Kazakhstan, and relying on the dense network of cooperative relationships we inherited from the Soviet Union, we formed a common customs space, and then upgraded it to the Eurasian Economic Union. The initiator of this project is here with us today, on this very panel. It is President of Kazakhstan Nursultan Nazarbayev.

We are deepening our integration gradually, and are removing obstacles to commerce and the movement of investment, technology and workforce. We are implementing an industrial and technological cooperation programme already, and are forming a common service market incrementally. Common energy, oil and gas and financial markets will emerge by 2025.

We are aware of the impressive prospects of cooperation between the EAEU and other countries and integration associations. Over 40 states and international organisations have expressed the desire to establish a free trade zone with the Eurasian Economic Union. Our partners and we think that the EAEU can become one of the centres of a greater emergent integration area. Among other benefits, we can address ambitious technological problems within its framework, promote technological progress and attract new members. We discussed this in Astana quite recently. Now we propose considering the prospects for more extensive Eurasian partnership involving the EAEU and countries with which we already have close partnership – China, India, Pakistan and Iran – and certainly our CIS partners, and other interested countries and associations.

To start, we might streamline and unify the regulation of departmental cooperation and investment, nontariff measures of technology and phytosanitary control, customs administration and protection of intellectual property. Further on, we should move gradually to the reduction and eventual abolition of tariff restrictions.

We might proceed from a network of bilateral and multilateral trade agreements that envisage a varying pace, extent and level of interaction and the extent of market openness, depending on specific national economies’ readiness for teamwork, with understandings on joint research, educational and high-tech projects. All these agreements should be future-oriented and provide the basis for harmonious joint development resting on equal and effective cooperation.

As early as June we, along with our Chinese colleagues, are planning to start official talks on the formation of comprehensive trade and economic partnership in Eurasia with the participation of the European Union states and China. I expect that this will become one of the first steps toward the formation of a major Eurasian partnership. We will certainly resume the discussion of this major project at the Eastern Economic Forum in Vladivostok in early September. Colleagues, I would like to take this opportunity to invite all of you to take part in it.

Friends, the project I have just mentioned – the “greater Eurasia” project – is, of course, open for Europe, and I am convinced that such cooperation may be mutually beneficial. Despite all of the well-known problems in our relations, the European Union remains Russia’s key trade and economic partner. It is our next-door neighbour and we are not indifferent to what is happening in the lives of our neighbours, European countries and the European economy.

The challenge of the technological revolution and structural changes are no less urgent for the EU than for Russia. I also understand our European partners when they talk about the complicated decisions for Europe that were made at the talks on the formation of the Trans-Atlantic partnership. Obviously, Europe has a vast potential and a stake on just one regional association clearly narrows its opportunities. Under the circumstances, it is difficult for Europe to maintain balance and preserve space for a gainful manoeuvre.

As the recent meetings with representatives of the German and French business circles have showed, European business is willing and ready to cooperate with this country. Politicians should meet businesses halfway by displaying wisdom, and a far-sighted and flexible approach. We must return trust to Russian-European relations and restore the level of our cooperation.

We remember how it all started. Russia did not initiate the current breakdown, disruption, problems and sanctions. All our actions have been exclusively reciprocal. But we don’t hold a grudge, as they say, and are ready to meet our European partners halfway. However, this can by no means be a one-way street.

Let me repeat that we are interested in Europeans joining the project for a major Eurasian partnership. In this context we welcome the initiative of the President of Kazakhstan on holding consultations between the Eurasian Economic Union and the EU. Yesterday we discussed this issue at the meeting with the President of the European Commission.

In addition, it would be possible to resume dialogue between experts at the technical level on a broad range of issues, such as trade, investment, technical regulation and customs administration. In this way we could create the groundwork for further cooperation and partnership.

Naturally, we consider it important to continue cooperation on major research projects, such as the ITER thermonuclear plant and the x-ray free electron laser, to name a few. Joint efforts will allow us to seriously increase the technological competitiveness of both Europe and Russia. It is enough to note that in 2015 Russia invested 1.2 billion Euros in high-tech joint projects with Europe.

Colleagues,

In formulating the strategy for Russia’s economic development, we certainly consider the current trends in the world and intend to make use of global technological changes, the formation of new markets and the opportunities of integration and cooperation to advance our own development.

Russia has managed to resolve the most urgent current problems in the economy. We hope growth will resume in the near future. We have maintained reserves and substantially reduced capital drain – by five times compared with the first quarter of 2016. Inflation is going down as well. It has fallen almost in half if we compare several months in 2014–2015 with the same period in 2015–2016. I believe that it is possible to bring inflation down to 4–5 percent as early as in the mid-term perspective.

In addition, it is necessary to gradually decrease the budget deficit and the dependence on revenues from hydrocarbons and other raw materials. This includes cutting our non-oil and gas deficit at least in half in the next 5 to 7 years.

I am sure that the Government and the Central Bank will continue their balanced and responsible efforts to ensure macroeconomic stability. Our goal is to achieve economic growth rates of no less than 4 percent a year. Yes, of course, I remember what we were saying in previous years. Today, we are talking about far more modest targets. The objectives are not as high as were outlined only a few years ago, but, to reiterate, the situation has changed not only for Russia but for the entire global economy. The current slowdown is a global trend.

A key factor that predetermines the overall competitiveness of the economy, market dynamics, GDP growth and higher wages is labour productivity. We need higher labour productivity at large and medium-sized enterprises: in industry, in the construction and the transport sectors and in agriculture – no less than 5 percent a year. This appears to be a challenging and even unattainable goal, if we look at what is happening here today. At the same time, the examples of numerous enterprises, as well as of entire manufacturing sectors, such as the aircraft industry, the chemical industry, pharmaceutics and agriculture, show that this goal is quite feasible and realistic.

We will develop legislation, tax regulators and technical standards to incentivise companies to raise labour productivity and introduce labour and energy saving technology. Enterprises that are ready and willing to achieve such goals should receive broad access to financial resources, including through development institution mechanisms such as Vnesheconombank and the Industry Development Fund.

With the growth of labour productivity, inefficient employment will inevitably shrink, which means we will need to substantially increase the labour market’s flexibility, to offer people new opportunities. We will be able to resolve this problem primarily by creating more jobs at small and medium-sized businesses. The number of people (what I am going to say is very important) employed at small and medium-sized businesses should grow from today's 18 million by at least 1.4 million by 2020 and by more than 3 million by 2025. It will be difficult to increase support for small and medium-sized businesses, and still harder to consistently build a niche for its operation. But it needs to be done.

We have already taken an important step toward that end, which has generated some initial results. For example, large companies co-owned by the government have tangibly increased their orders from small and medium-sized businesses. By the end of the year – and this is, I think, an achievement by the Government – large companies will place 1 trillion rubles worth of orders with small and medium-sized businesses, a nearly nine-fold increase on last year.

High-tech industries could provide another niche for small and medium-sized businesses. It is important to create favourable conditions for small companies, start-ups entering the market with breakthrough products. Finally, there is yet another significant niche – services, the development of consumer services, essentially creating a comfortable, supportive environment for people living in the cities and towns of Russia.

In July, the Federal Corporation for the Development of Small and Medium Enterprises will launch a free online service – the Business Navigator – containing information on promising areas for starting a business, by region, as well as which products and services are in demand and what financial and property support options are available there. The government has already started dedicated work to promote exports and has created the Russian export hub.

Still, we need to go further, building on the results achieved. We need to put together a support system for export-oriented companies, which would embrace the entire value chain from R&D and export financing to helping companies with certification, marketing, maintenance arrangements and generally gaining a foothold in foreign markets.

I should add that our import replacement programme is also aimed at manufacturing goods that are competitive on the global market. And in this sense, I would also like to stress that import replacement is an important stage for expanding exports in sectors other than raw materials and finding a place for our companies in global manufacturing and technological alliances – and not in secondary roles, but as strong and effective partners.

Friends, we will continue to further liberalise and improve the business climate. I know a great deal has been said about this at forum events today and yesterday. We will tackle systemic problems, of which we still have plenty. This includes improving transparency and balancing relations between government agencies and businesses. These relations should be built on understanding and mutual responsibility, meticulous observance and compliance with laws and respect for the interests of the state and society, and the unconditional value of the institution of private property.

It is essential to drastically reduce illegal criminal prosecutions. Furthermore, representatives of security and law enforcement agencies should be made personally liable for unjustified actions leading to the destruction of a business enterprise. I believe that this liability can be criminal.

I realise that this is a very sensitive issue. We cannot and should not bind our law enforcement agencies hand and foot. However, without a doubt, there is a need for balance here, for a firm barrier to any abuses of power. The leadership of the Prosecutor General’s Office, the Investigative Committee, the Interior Ministry and the Federal Security Service should continuously monitor the situation on the ground and, if necessary, take measures to improve legislation.

I ask the working group on law enforcement in entrepreneurial activity, which is headed by Chief of Staff of the Presidential Executive Office Sergei Ivanov, to focus on these issues as well. I should add that I have already submitted to parliament a package of draft laws prepared by the working group, designed to humanise the so-called economic statutes [of the Criminal Code]. That said, it is also important to guarantee businesses and all citizens the right to fair and impartial defence in court.

The Russian judicial community has done a good deal recently to improve the quality of the court system. The merging of the Supreme and the Higher Arbitration courts has played a positive role in ensuring the uniformity of law enforcement. I believe it is necessary to move further toward enhancing the responsibility of judges and making the judicial process more transparent.

A major role in creating a favourable business environment, without a doubt, belongs to Russian regions. I know that this was discussed at forum events in the morning, and the results of the annual national investment climate ratings were announced. I would like to join in congratulating the winners and remind you that these are Tatarstan and the Belgorod and Kaluga regions. I would also like to note the significant progress made by the Tula, Vladimir, Tyumen, Kirov, Lipetsk and Orel regions, and the city of Moscow.

What stands out here? Judging by the results, a core group of leaders has already emerged, who are invariably at the top of rankings. The natural question is: Where are the others? I ask the Government, in conjunction with business communities, to consider additional mechanisms to reward the best regional administrative teams. On the other hand, we will take serious measures, including dismissals, with regard to regional leaders who do not understand that business support is a major resource for regional and national development. I would like my colleagues in the regions, above all, regional leaders to hear me. We will seriously analyse what is happening in this sphere in each Russian region and discuss the issue in depth in the autumn.

Ladies and gentlemen, I have already talked about Russia’s participation in cooperative scientific research projects, in particular with European countries. It is essential to add that we have a core advantages in physics, mathematics and chemistry. As you know, recently we honoured scientists who won the National Award, who have made brilliant breakthroughs in biology, genetics and medicine. Russian microbiologists have developed, for example, an effective vaccine against Ebola. National companies are going to bring an entire line of unmanned vehicles to the market and are working on energy distribution and storage, and digital sea navigation systems. We have practically put in place a technological development management system. What does this entail and what would I like to say in this context?

First. The recently formed Technology Development Agency will help apply current research to real manufacturing and set up joint ventures with foreign partners.

Second. Another mechanism will be in use starting in 2019. Major manufacturers will be made legally bound to use the most advanced technologies meeting the highest environmental standards. Hopefully, this will give a serious boost to industrial modernisation. Many neighbouring countries introduced such requirements long ago. We have had to put off these changes due to problems in the real economic sectors, but we can’t keep postponing it any more. Our business colleagues know this and must be prepared.

And finally, third. The National Technology Initiative covers projects of the future based on technologies that will create fundamentally new markets in a decade or two. I would like to ask the Government to promptly remove administrative, legislative and other obstacles blocking the development of future markets. It is essential to back up technological development with financial resources. Therefore, the key task facing the overhauled Vnesheconombank will be to support long-term projects, attractive projects in this high-tech sector.

We clearly understand that it is people who create and use technologies. Talented researchers, qualified engineers and workers play a crucial role in making the national economy competitive. Therefore education is something we should pay particular attention to in the next few years.

We are witnessing revived interest on the part of young people in engineering and natural sciences. Russia already holds a leading position in the world in the number of students training to become engineers. Professional training standards in engineering are improving. Universities and colleges are consolidating ties with the real economy, both state and private sectors, and the demand for future professionals is therefore growing.

We have to continue to upgrade the material resources of universities and colleges, improve teachers’ qualifications, work to improve university and college curricula in line with modern updated professional standards and use the expertise we received when working with the WorldSkills international movement.

Beginning with school and extracurricular programmes, we create conditions to enable children throughout the country to work on technical and scientific projects, learning to work creatively in a team from childhood. These skills are essential to a modern specialist in practically any sphere.

Colleagues, obviously the issues that we are facing call for new approaches toward development management, and here we are determined to make active use of the project principle. A presidential council for strategic development and priority projects will be created in the near future. It will be headed by your humble servant, while the council presidium will be led by Prime Minister Dmitry Medvedev.

The council will deal with key projects aimed at effecting structural changes in the economy and the social sphere, and increasing growth rates. I have spoken about some of these projects today: raising labour productivity, the business climate, support for small and medium-sized business, and export support, among others.

These projects are comprehensive. They span various economic sectors and social spheres, go far beyond the competence of one agency and require the active participation of regions and municipalities. At the same time a project related segment will be singled out in socially oriented state programmes, such as healthcare, education and housing, with clearly designated targets that we plan to achieve by 2020 and by 2025, and what measures need to be taken to achieve these results.

By the middle of the next decade the world will obviously be a different place. To overlook, to ignore on-going processes means to fall by the wayside of development. To maintain leadership positions [we] should work to make these changes happen.

This is the 20^th time St Petersburg welcomes the forum guests. During these years Russia has made great progress, showing its ability to meet the challenges of the times and in certain respect remain ahead of the curve, while preserving its identity and spiritual roots, which I consider to be extremely important. We are confidently looking ahead, linking our future and our success to [our] openness to the world and wide-ranging cooperation in the interest of development.

Dear colleagues, friends, ladies and gentlemen, I am sure that you share this approach, and we certainly appreciate this and invite you to work together with us.

Thank you.

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Plenary session moderator, CNN host Fareed Zakaria: Thank you to all three of you: two presidents, one prime minister, though in Italy, you are allowed to say ”President Renzi“ also. By the format we have agreed upon, what I will do is we will begin this discussion first with our host president, President Putin, and then I will widen that conversation to include Prime Minister Renzi and President Nazarbayev. We started a little bit late, so we will go a little bit longer.

President Putin, let me ask you a very simple question. Since 2014, you have had European Union sanctions and US sanctions against Russia. NATO has announced just this week that it is going to build up forces in states that border Russia. Russia has announced its own buildup. Are we settling into a low-grade, lower-level cold war between the West and Russia?

Vladimir Putin: I do not want to believe that we are moving towards another Cold War, and I am sure nobody wants this. We certainly do not. There is no need for this. The main logic behind international relations development is that no matter how dramatic it might seem, it is not the logic of global confrontation. What is the root of the problem?

I will tell you. I will have to take you back in time. After the collapse of the Soviet Union, we expected overall prosperity and overall trust. Unfortunately, Russia had to face numerous challenges, speaking in modern terms: economic, social and domestic policy. We came up against separatism, radicalism, aggression of international terror, because undoubtedly we were fighting against Al Qaeda militants in the Caucasus, it is an obvious fact, and there can be no second thoughts about it. But instead of support from our partners in our struggle with these problems, we sadly came across something different – support for the separatists. We were told, “We do not accept your separatists at the top political level, only at the technological.”

Very well. We appreciate it. But we also saw information support, financial support and administrative backup.

Later, after we tackled those problems, went through serious hardships, we came to face another thing. The Soviet Union was no more; the Warsaw Pact had ceased to exist. But for some reason, NATO continues to expand its infrastructure towards Russia’s borders. It started long before yesterday. Montenegro is becoming a [NATO] member. Who is threatening Montenegro? You see, our position is being totally ignored.

Another, equally important, or perhaps, the most important issue is the unilateral withdrawal [of the US] from the ABM Treaty. The ABM Treaty was once concluded between the Soviet Union and the United States for a good reason. Two regions were allowed to stay – Moscow and the site of US ICBM silos.

The treaty was designed to provide a strategic balance in the world. However, they unilaterally quit the treaty, saying in a friendly manner, “This is not aimed against you. You want to develop your offensive arms, and we assume it is not aimed against us.”

You know why they said so? It is simple: nobody expected Russia in the early 2000s, when it was struggling with its domestic problems, torn apart by internal conflicts, political and economic problems, tortured by terrorists, to restore its defence sector. Clearly, nobody expected us to be able to maintain our arsenals, let alone have new strategic weapons. They thought they would build up their missile defence forces unilaterally while our arsenals would be shrinking.

All of this was done under the pretext of combatting the Iranian nuclear threat. What has become of the Iranian nuclear threat now? There is none, but the project continues. This is the way it is, step by step, one after another, and so on.

Then they began to support all kinds of colour revolutions, including the so-called Arab Spring. They fervently supported it. How many positive takes did we hear on what was going on? What did it lead to? Chaos.

I am not interested in laying blame now. I simply want to say that if this policy of unilateral actions continues and if steps in the international arena that are very sensitive to the international community are not coordinated then such consequences are inevitable. Conversely, if we listen to one another and seek out a balance of interests, this will not happen. Yes, it is a difficult process, the process of reaching agreement, but it is the only path to acceptable solutions.

I believe that if we ensure such cooperation, there will be no talk of a cold war. After all, since the Arab Spring, they have already approached our borders. Why did they have to support the coup in Ukraine? I have often spoken about this. The internal political situation there is complicated and the opposition that is in power now would most likely have come to power democratically, through elections. That’s it. We would have worked with them as we had with the government that was in power before President Yanukovych.

But no, they had to proceed with a coup, casualties, unleash bloodshed, a civil war, and scare the Russian-speaking population of southeastern Ukraine and Crimea. All for the sake of what? And after we had to, simply had to take measures to protect certain social groups, they began to escalate the situation, ratcheting up tensions. In my opinion, this is being done, among other things, to justify the existence of the North Atlantic bloc. They need an external adversary, an external enemy – otherwise why is this organisation necessary in the first place? There is no Warsaw Pact, no Soviet Union –who is it directed against?

If we continue to act according to this logic, escalating [tensions] and redoubling efforts to scare each other, then one day it will come to a cold war. Our logic is totally different. It is focused on cooperation and the search for compromise. (Applause.)

Fareed Zakaria: So let me ask you, Mr President, then what is the way out? Because I saw an interview of yours that you did with Die Welt, the German newspaper, in which you said, the key problem is that the Minsk Accords have not been implemented by the Government in Ukraine, by Kiev, the constitutional reforms. They say on the other side that in Eastern Ukraine, the violence has not come down, and the separatists are not restraining themselves, and they believe Russia should help. So since neither side seems to back down, will the sanctions just continue, will this low-grade cold war just continue? What is the way out?

Vladimir Putin: And it is all about people, no matter what you call them. It is about people trying to protect their legal rights and interests, who fear repression if these interests are not upheld at the political level.

If we look at the Minsk agreements, there are only a few points, and we discussed them all through the night. What was the bone of contention? What aspect is of primary importance? And we agreed ultimately that political solutions that ensure the security of people living in Donbass were the priority.

What are these political solutions? They are laid down in detail in the agreements. Constitutional amendments that had to be adopted by the end of 2015. But where are they? They are nowhere to be seen. The law on a special status of these territories, which we call “unrecognized republics”, should have been put into practice. The law has been passed by the country’s parliament but still hasn’t come into effect. There should have been an amnesty law. It was passed by the Ukrainian parliament but was never signed by the president, it has no effect.

What kind of elections are we talking about? What sort of election process can be organised during an anti-terrorist operation? Do any countries do that? We do not talk about it, but does any other country hold election campaigns when an anti-terrorist operation is taking place on its territory?

They [elections] have to be cancelled and our work should focus on economic and humanitarian restoration. Nothing is being done, nothing at all. Postponing these problems over on-going violence on the frontlines is just an excuse. What is happening in reality is that both sides are accusing each other of opening fire. Why do you think it is separatists who are shooting? If you ask them, they say, “It is Ukrainian government forces, the Ukrainian army.”

One side opens fire, the other side responds – that’s what exchanging fire means. Do you think this is a good enough reason to delay political reforms? On the contrary, political reforms that will constitute the foundation of a final settlement on security are a pressing priority.

Some things have to be done in parallel. I agree with Mr Poroshenko that the OSCE mission has to be reinforced to the point of authorizing OSCE observers to carry firearms. Other things can be done to improve security. But we cannot afford to continue putting off key political decision by citing the lack of security in the area. That’s it. (Applause.)

Fareed Zakaria: There are so many areas to cover with you, Mr President, so let me go to the Middle East, where Russia has had a forceful intervention to bolster the Assad regime. President Assad now says that his goal is to take back every square inch of his territory. Do you believe that the solution in Syria is that the Assad regime should take back and govern every square inch of Syria?

Vladimir Putin: I think that the problems of Syria, of course, concern primarily the anti-terrorist struggle, but there is more to it. It goes without saying that the Syrian conflict is rooted in contradictions within Syrian society, and President Bashar al-Assad understands this very well. The task is not just to expand control over various territories, although this is very important. The point is to ensure the confidence of the entire society and trust between different parts of this society, and to establish on this foundation a modern and efficient government that will be trusted by the country’s entire population. And political negotiations are the only road to this. We have urged this more than once. President al-Assad also spoke about this – he accepts this process.

What needs to be done today? It is necessary to join more actively the process of forming the new Constitution and to conduct, on this basis, future elections, both presidential and parliamentary. When President al-Assad was in Moscow, we spoke about this with him and he fully agreed with this. Moreover, it is extremely important to conduct the elections under strict international control, with the participation of the United Nations. Yesterday we discussed this issue in detail with Mr de Mistura and the UN Secretary-General. They all agree with this, but we need action. We hope very much that our partners, primarily from the United States, will work with their allies that support the opposition to encourage constructive cooperation with the Syrian authorities.

What do we mean by this? In general, when I ask my colleagues: “Why are you doing this?” they reply: “To assert the principles of democracy. President al-Assad’s regime is not democratic and the triumph of democracy must be ensured.” Fine. “Is democracy everywhere there?” “No, not yet but democracy should exist in Syria.” “Ok. And how do you make society democratic? Is it only possible to achieve this by force of arms or simply by force?” “No, this may be done only with the help of democratic institutions and procedures.” And what are they all about? There is no more democratic way of forming a government than elections on the basis of fundamental law: a Constitution that is formulated in a clear way, that is transparent and accepted by the overwhelming majority of society. Pass the Constitution and hold elections on its basis. What’s bad about this, especially if they are held under international control?

Occasionally we hear that some countries of the region do not fully understand what democracy is. Do we want to replace one undemocratic regime with another undemocratic one? And if we still want to promote the principle of democracy let’s do this by democratic means. But considering this is a complicated process and results will not come tomorrow or the day after tomorrow but will require time, while we still need to do something today, I agree with the proposals of our partners, primarily our American partners that suggest (I don’t know, maybe I’m saying too much although, on the other hand, this US proposal is known in the region, and the negotiators of both sides – the government and the opposition – are familiar with it and I consider it absolutely acceptable), they suggested considering the possibility of bringing representatives of the opposition into existing power structures, for instance, the Government. It is necessary to think about what powers this Government will have.

However, it is important not to go too far. It is necessary to proceed from the current realities and to refrain from declaring unfeasible, unrealistic goals. Many of our partners are saying that Assad should go. Today they are saying no, let’s restructure governing institutions in such and such a way, but in practical terms it will also mean his departure. But this is also unrealistic. Therefore, it is necessary to act carefully, step by step, gradually winning the confidence of all sides to the conflict.

If this happens, and I think this will happen in any event and the sooner the better, it will be possible to go further and speak both about subsequent elections and a final settlement. The main point is to prevent the country’s collapse. And if things continue to go as they are today, collapse will become inevitable. And this is the worst-case scenario because we cannot assume that after the country’s collapse some quasi-state formations will co-exist in peace and harmony. No, this will be a destabilising factor for the region and the rest of the world.

Fareed Zakaria: Let me ask you, Mr President, about another democracy that is having a very different kind of drama. You made some comments about the American Republican presumptive nominee, Donald Trump. You called him brilliant, outstanding, talented. These comments were reported around the world. I was wondering, what in him led you to that judgement, and do you still hold that judgement?

Vladimir Putin: You are well known in our country, you personally. Not only as a host of a major TV corporation, but also as an intellectual. Why are you distorting everything? The journalist in you is getting the better of the analyst. Look, what did I say? I said in passing that Trump is a vivid personality. Is he not? He is. I did not ascribe any other characteristics to him. However, what I definitely note and what I definitely welcome – and I see nothing wrong about this, just the opposite – is that Mr Trump said that he is ready for the full-scale restoration of Russian-US relations. What is wrong with that? We all welcome this! Don’t you?

We never interfere in the internal politics of other countries, especially the United States. However, we will work with any president that the US people vote for. Although I do not think, by the way, that… Well, they lecture everyone on how to live and on democracy. Now, do you really think presidential elections there are democratic? Look, twice in US history a president was elected by a majority of electors, but standing behind those electors was a smaller number of voters. Is that democracy? And when (sometimes we have debates with our colleagues; we never accuse anyone of anything, we simply have debates) we are told: “Do not meddle in our affairs. Mind your own business. This is how we do things,” we feel like saying: “Well then, do not meddle in our affairs. Why do you? Put your own house in order first.”

But, to reiterate, indeed, this is none of our business although, in my opinion, even prosecutors there chase international observers away from polling stations during election campaigns. US prosecutors threaten to jail them. However, these are their own problems; this is how they do things and they like it. America is a great power, today perhaps the only superpower. We accept this. We want to work with the United States and we are prepared to. No matter how these elections go, eventually they will take place. There will be a [new] head of state with extensive powers. There are complicated internal political and economic processes at work in the United States. The world needs a powerful country like the United States, and we also need it. But we do not need it to continuously interfere in our affairs, telling us how to live, and preventing Europe from building a relationship with us.

How are the sanctions that you have mentioned affecting the United States? In no way whatsoever. It could not care less about these sanctions because the consequences of our actions in response have no impact on it. They impact Europe but not the United States. Zero effect. However, the Americans are telling their partners: “Be patient.” Why should they? I do not understand. If they want to, let them.

Matteo, why should they be patient? Now Matteo will explain why they should. He is a brilliant orator, we’re seeing it now. His remarks were excellent. I am saying this sincerely, honestly. Italy can be proud of its Prime Minister, really. Just beautiful.

We do not lavish praise on anybody. It’s none of our business. As Germans say, “this is not our beer.” Because when they make their choice, we will work with any president who has received the support of the American people, in the hope that it will be a person who seeks to develop relations with our country and help build a more secure world.

Fareed Zakaria: Just to be clear, Mr President, the word ”brilliant“ was in the Interfax translation, I realize that other translations might say ”bright,“ but I used the official Interfax translation. But let me ask you about another person you have dealt with a great deal. Mr Trump, you've never met. Hillary Clinton was Secretary of State. In your very long questions and answers with the Russian people, you made a joke when somebody asked you about her – you said, I think that the Russia idiom is, the husband and wife is the same devil. And what it means in the English version is, it's two sides of the same coin. What did you mean by that, and how did she do as Secretary of State? You dealt with her extensively.

Vladimir Putin: I did not work with her, Lavrov did. Ask him. He is sitting here.

I was not a foreign minister, but Sergei Lavrov was. He will soon tie [Soviet Foreign Minister Andrei] Gromyko. (Addressing Sergei Lavrov.) How long have you been in office?

I worked with Bill Clinton, although for a very short time, and we had a very good relationship. I can even say that I am grateful to him for certain moments as I was entering the big stage in politics. On several occasions, he showed signs of attention, respect for me personally, as well as for Russia. I remember this and I am grateful to him.

About Ms Clinton. Perhaps she has her own view on the development of Russian-US relations. You know, there is something I would like to draw [your] attention to, which has nothing to do with Russian-US relations or with national politics. It is related, rather, to personnel policy.

In my experience, I have often seen what happens with people before they take on a certain job and afterward. Often, you cannot recognise them, because once they reach a new level of responsibility they begin to talk and think differently, they even look different. We act on the assumption that the sense of responsibility of the US head of state, the head of the country on which a great deal in the world depends today, that this sense of responsibility will encourage the newly elected president to cooperate with Russia and, I would like to repeat, build a more secure world.

Fareed Zakaria: President Putin, let me finally ask you one question about news reports about Russian athletes. There are now two major investigations that have shown that Russian athletes have engaged in doping on a massive scale, and that there has been a systematic evasion and doctoring of testing and lab samples. And I was just wondering what you reaction to these reports is.

Vladimir Putin: I did not understand what kind of programme it is – to tamper with the samples that were collected for tests? If samples are collected they are immediately transferred to international organisations for storage and we have nothing to do with them. Samples are collected and taken somewhere, to Lausanne or wherever, I do not know where, but they are not on Russian territory. They can be opened, re-checked, and this is what specialists are doing now.

Doping is not only a Russian problem. It is a problem of the entire sports world. If somebody tries to politicise something in this sphere, I think this is a big mistake, because just like culture, for example, sport cannot be politicised. These are the bridges that bring people, nations and states closer together. This is the way to approach it, not try to forge some anti-Russian or anti-whatever policy on this basis.

As for the Russian authorities, I can assure you, we are categorically against all doping for several reasons. First, as a former amateur athlete, I can tell you, and I think that the overwhelming majority of people will agree with this: if we know there is doping, it’s not interesting to watch the event; millions of fans lose interest in the sport.

Second, no less important, and maybe even most important, there is the health of the athletes themselves. You can’t justify anything that damages health. This is why we have combated and will continue to combat doping in sport on the national level.

Furthermore, as far as I know, the Prosecutor General’s Office and the Investigative Committee have been closely looking into all facts reported in the media, among others. Simply, this must not be turned into a campaign, especially a campaign disparaging sport, including Russian sport.

Next, the third point I would like to make. There is a legal concept that says responsibility can only be individual. Collective responsibility cannot be imposed on all athletes or athletes of a certain sports federation if certain individuals have been caught doping. An entire team cannot be held responsible for those who have committed this violation. I believe that this is an absolutely natural, correct approach.

However, doping is not the only problem today. There are plenty of problems in sport. Euro 2016 is underway. I believe that less attention is being paid to football than to brawling between fans. This is very sad and I regret this, but here too we should always proceed from some general criteria. To reiterate, responsibility for misconduct should be individualised as much as possible and the approach toward perpetrators should be the same.

Euro 2016 began with a high-profile case: a fight between Russian and British fans. This is absolutely outrageous. Granted, I do not know how 200 Russian fans were able to pummel several thousand Britons. I do not understand. But in any case, law enforcement agencies should take the same approach toward all perpetrators.

This is the way we have organised this work and will continue to combat doping and enforce discipline among fans. We will work with these fan associations. I very much hope that there are plenty of intelligent, sensible people among the fans, who really love sport and who understand that violations do nothing to support their team but, on the contrary, cause damage to the team and to sport. However, a great deal has yet to be done here, including in conjunction with our [foreign] colleagues.

I would like to stress that there has been absolutely no support and can be absolutely no support for violations in sport, let alone doping violations, at the state level. We have worked and will continue to work with all international organisations in this sphere. 

<…>

Fareed Zakaria: Well, we've had a very wide-ranging discussion, and there have been points of disagreement, and then points of profound agreement, such as on the quality of Kazakh-qualified women to rule the world. President Putin, I was wondering if you may have some closing thoughts that you could give us and then we will wrap up the session.

Vladimir Putin: First of all, I would like to thank all those who came to St Petersburg.

I would like to thank our moderator. I think we have had a very lively discussion. We agree on some points and disagree on others but there are still more things that unite us – this is absolutely clear.

Our Italian friend scared me a bit toward the end by saying that unless it changes, Europe will be no more. This sounds alarming, but to be honest, I don’t think it’s the case – after all, Europe is Europe. The foundations of its economy don’t give us reason to believe that Europe will come to an end at any point, no matter what internal processes are playing out. It is our leading trade and economic partner. It is clear that European leaders want to gain some momentum, just like we in Russia certainly want to do the same. In my speech I described how we are going to achieve this.

You know, it is so symptomatic that today we have here the leader of a European country (and one that is developing fairly rapidly) – Italy, and the leader of Kazakhstan – our closest partner and ally with which we are building an integration association. Today we have gathered everyone together. This is symptomatic because we must focus our attention on joining forces for the sake of development if we want to achieve it.

For its part, Russia will do everything to follow this very road, actively developing at home and remaining open to cooperation with all of our partners.

Many thanks to all of you and best of luck.