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Vladimir Putin: "Keep yourself in hands and seek for best result"

Vladimir Vladimirovich, one year of your presidency is not over yet, but some ministers have already got reprimands, and some even have been retired. Did new government appeared to be incompetent, or your requirements increased? Do you plan to fire anyone else?

-In general, I am satisfied with work of the Prime Minister and the Government. We must not forget that current Prime Minister, head of government, worked as head of state for four years. It's a huge responsibility and great experience. Although I know for myself, not hearsay, how difficult is this job. There, as they say, you should stand near the furnace, or in the pit, as miners say, direct responsibility for decisions. As for layoffs, not so many were fired. I reprimanded three ministers.

And it was not like this before ... What has changed?

Previously, it wasn’t. First, situation in the country has changed. And we need to solve already old, but very important issues. People in the government are experienced, many of them work in ministries for more than a year, but have never been in chief positions. And many feel that they already know everything. Those are colleagues with whom I have been working together for many years, but they need to understand that there should be no difference between what was stated as primary and mid-term goals during presidential election campaign, and the government performance. Country is waiting for results. This should be the work of well-coordinated team. And we need people to be completely aware of it.

Secondly, I did not kick out anyone. Minister, who resigned after the first few weeks of work, himself, began to raise question that apparently got in wrong place. It’s not a crime. Person was engaged in internal politics and, in principle, it seemed to him that the Ministry of Regional Development - it's something like that. But it is quite another. And nothing is wrong that person told about it honestly and resigned. Why should he have to suffer there himself and torture others? But in principle, despite the fact that I reprimanded him, he is quite capable, experienced, and I think his experience could be used in other places.

Although crisis in eurozone has passed over, global economy is quite tense. This has affected economic performance of many countries, and general mood of delegates in Davos. Do you think that we will face a second wave of crisis? If so, how Russia is prepared for it?

-I think that now we are even better prepared because previous wave of crisis has passed, and we already have an understanding of what and how to do, have tools to fight crisis.

Moreover, last year I ordered government (past) to improve available and used tools, to prepare legislation projects, to improve regulatory framework. We asked the Parliament, and Parliament agreed and spared a certain amount of money, 200 billion rubles. to reserve fund for the Government. So all in all we have tools.

Tools - this is good, but what’s going on with the real economic performance?

- As for inflation, then last year it was the lowest in last 20 years. And this, of course, is our pride, because we were targeting inflation for a long-time, trying to suppress it. We have the result. This year, it barely grew - 6.3%, but as you can see, it is almost in same values. I recall that in previous decade, from 2000 to 2010, average inflation was 12.75%.

You know, last year growth of our economy was decent as well: the highest in the world after China and India - 4.2%. Average economic growth in the euro area was 3.9%. This year, the World Bank and the IMF predicts negative growth for Europe - minus 0.3%, but we still plan plus, with a plus of 4% to 5%. This is the most important condition, which tells us that in general, if Russia faces challenges, it will have enough tools to deal with these challenges and threats.

We have a trade surplus. In 2011 it was 198.2 billion rubles., in 2012 - 164.6 billion rubles. This year, I believe, it will be not less. You and I know that numbers that I cite are preliminary yet, they will be re-counted in first quarter of this year.

I note capitalization increasing in banking system. Nice is that deposits of the Russian Federation citizens in our banking system, in our financial institutions increased. Year growth was 19.6%, in absolute terms this is 13.1 trillion rub.

We have a stable situation in field of finance. Increasing in foreign exchange reserves, they are almost recovered to pre-crisis levels. We are now the third country in the world in terms of gold reserves after China and Japan; we have more than 500 billion dollars. Government reserves are recovered simultaneously. There are two reserve fund of the Government: National Welfare Fund with $ 80 billion in dollar terms, and some $ 60 billion - Reserve Fund from which we finance budget deficit, if it occurs.

You say "if." That is in comparison with massive deficits in budgets of the EU and the U.S., Russia does not have this problem at all?

- We do not have deficit. We have a surplus, budget for last year was set with small surplus, but still a surplus. But we do not relax at all, we understand that most tricky in all these processes in world economy is that it is evolving unpredictably, and it is almost impossible to predict where will be the main challenges and key threats. Therefore, we look closely at what is happening in neighboring countries, in our partner countries. We sincerely try to help, as partners. Because any failure in economy, let’s say, in the euro area, has painful impact on our economy. These are the main markets for our goods. If they are cut, we immediately have production fall. Therefore we are interested that the euro zone remains stable, and economy of our major partners start working.

Ukraine is balancing between the European and Customs Union for many years, carefully weighing benefits and nuances of entry into each of them, but does not take decisive action. How Russia and you in particular, feel about Ukrainian unsolvable dilemma?

-I have already said about this, but once again, any partners who would like to join, must decide for themselves – if it is profitable or unprofitable. By no means ever Russia, and our partners from Customs Union and Common Economic Space, shall impose anything on anyone. This would be the most counterproductive step in such matters. Any country should count everything. It's, you know, first of all, the economy – they need to count their pros and cons, they get after participation in various integration processes.

Our calculations show that Belarus only due to reduction in energy prices after participation in Customs Union at its creation has received plus 16% of GDP. And, I want to tell you, this is not just a bonus of lower energy prices, it is like a general solution in context of other issues in economics. There are other gains with purely systematic features.

We have certain preferential relations, such as with partners in Germany, but it's all based on close cooperation. This is a different model of economic interaction. Regarding Ukraine, our specialists with the Institute of Economics and Forecasting of the Academy of Sciences of Ukraine concluded that in case of Ukraine's participation with the Customs Union, its GDP growth will be between 1.5% to 6.5% depending on integration depth.

There is another circumstance, to which we always pay attention - the process of integration within the Customs Union, the EU is in progress: certain conditions are created, documents are written. And then will be difficult, if not impossible to change documents for new entrants and possible members of this organization, because these negotiations are quite heavy.

When we created the Customs Union and the Common Economic Space - the negotiations were over years. Nykolay Azarov, by the way, knows - he was participant in negotiations for another 5-7 years ago - is a tricky thing. Of course, we are always in dialogue with our partners in Ukraine, they know what's going on, evaluating the situation, but the final choice is definitely for them.

By the way, we also noted: our Ukrainian friends, partners have pushed us to signing agreement on free trade between the CIS countries. Ukraine has always been a leader in addressing this issue.

In the end, the President and the Prime Minister of Ukraine put the squeeze on us, we have signed and ratified, and the Ukraine – did not yet. It's no surprise for us. We hope that it does with support of public, the media.

In early March, Viktor Yanukovych held a final press conference at which he was asked so many questions about the Ukrainian-Russian gas relations. During discussion with the media the President said that the scandalous gas contract was "noose around neck of Ukrainian people". Is it time to loosen the noose? On which terms Russia would revise the "formula price" on gas for Ukraine?

Remember wonderful, favorite for all of us literary work: "Can I bring chairs in the evening and have money in the morning? – Yes, you can. – And can we bring money in the morning and get chairs in the evening? – Yes, it is possible. But first - the money! "

-There are agreements, they are signed, and they are in action. They are, first of all, agreements of corporate nature. We agreed at the governmental level and at the level of presidents that we will give impulse to our businesses entities - to "Gazprom" and "Naftogaz of Ukraine", that they have considered all possible options to improve relations in energy sphere, including gas.

We know position of our partners, too, and consider it with respect. We have issues on which we have not agreed yet, but we want to reach final agreement. And we aspire to that.

One of the points of your election program was course on de-offshoring the Russian economy. How do you reach the goal, and to which extent is it possible to return offshore capital to Russia?

- It’s a very good question. Thank you very much, thank you for it. Why question is good? Because its one of the keys to our economy.

You should really seek for de-offshoring, this is an obvious thing. This should be done carefully, in civilized ways.

And the first thing is purely administrative. Namely, you need as many countries, including European ones, to achieve signing of appropriate agreements with offshore zones and disclose tax information about ultimate beneficiaries of offshore companies. It's quite civilized, and there's nothing serious.

As for the second way: it is difficult, but it seems to me, is more important. We need to improve our legislation to ensure that it be stable, effective, would protect the owner interests.

And the third way is improving the investment climate. According to experts, Russia is one of five countries, potentially the most attractive for investment. Our task is to turn that potential into real inflow of investments in creation of new businesses and jobs. All of these are large-scale problems that we formulate, set ourselves and are working out general action plans, including with business representatives.

All is very clear with objectives, but are there concrete results already?

-You know, we have developed a plan for improving investment climate in the country according to suggestions of our businesses, and almost all of our major associations. I should say that in some positions we moved forward, and quite effectively.

Work on the "road maps" and by regional standards of improving investment climate has shown its effectiveness. We will continue using this format to maintain an ongoing dialogue with business associations. At the same time, its not enough to create conditions for investment, you need to learn how to implement them, sell to investors as it should be, so they sent their capital in economy of our country, our priority sector. It is important to learn benefits that WTO accession gives, including placement of Russian export-oriented productions, such as in Asia-Pacific countries.

As for the tax administration, we went 30 steps up immediately, and even on this indicator placed in scale of rating higher than the United States. I think it says that tasks we set for ourselves can be performed. You just need to work in this direction purposefully. So we're going to do.

It's no secret that Cyprus is the most popular "safe haven" of Russian capital abroad. How do you evaluate attempts of Cypriot authorities to introduce an additional tax on bank deposits?

-I believe that this decision, if adopted, would be unfair, unprofessional and dangerous. But I'm used to it and warned. I remember once a simple Russian wisdom: "Friendship is friendship, snuff apart". There is every reason to believe that modes of use of funds deposited in offshore areas will continue to be strengthened. I'm not saying that tomorrow they will be frozen, but if the solution of this kind with different variations will be accepted, I ask you to excuse me for the simplicity of expression, you will go under swallowing dust torment, running to the courts in attempt to unfreeze funds.

Corruption is a perennial issue for Russia. Although the Government has a strong anti-bribery fighting by signing the National Anti-Corruption Plan and imposed series of stringent laws in this direction, results are modest. Size of average bribe in last few years has doubled, and in corruption index of countries, from Transparency International organization, Russia has risen from 147th to 143rd place. So what still prevents finally stopping corruption in Russia?

- Corruption is an issue for any country. By the way, it exists in every country, both in Europe and in the United States. Many things are legalized. Lobbying interests of private companies - is that corruption or not? But it seems to be within the law, and it feels good. But depends from which side to look...

Regarding fighting against corruption… Of course, this is one of our concerns. But it's so traditional. I have already cited example of dialogue about theft between Peter I and procurator-general, when Peter suggested, even for small, minor offense, to exile to Siberia or execute. Attorney-General replied: "Who will you stay with, sir? We all steal".

That, you know, is kind of like a tradition. But, at the same time, issues related to corruption are connected to development of economy and market. Fundamentally speaking, look at all emerging countries, one way or another; they are affected by this social disease. What does this say about? Not that we have to say, well, it's a tradition, lets leave it as it was, and always will be. No, it is necessary to deal with this, consistently and persistently. And there is need to increase sanctions, and to ensure that punishment for any offense in this area was inevitable.

But, on the other hand, I can say that work is going on. When we say that we have not done anything in this area, this is not true. Just last year, if I remember correctly, we brought to responsibility about 800,000 persons in corruption cases. A large part of them are people who have special status: it's either high officials of regional or federal level, or deputies, or law enforcement officers.

You have presented a lot of reasons. But where do you start? Do you think the bill prohibiting public employees to open accounts and buy property abroad can be effective?

- It can. This law has not been passed, but is submitted to the State Duma. This, of course gives certain restrictions for citizens involved in public activities, as today, according to our law, any citizen of the Russian Federation shall have the right for a foreign bank account, and real estate. But for officials, especially high-ranking officials there can be restrictions. I do not see anything unusual here, especially for our reality.

Because, if a person really wants to devote himself to service for country, people, then he must accept the fact that he wants to have an account - let he has an account here, in Russia, including in foreign bank. Why not? We have a lot of operating branches of foreign banks. Let’s open account here. Why you have to go to Austria or the United States, and open account? If you associate your destiny with this country, please be so kind then, expresses here all your interests, including those of material nature, and do not hide them somewhere under the carpet.

Perhaps problem lies in lack of transparency and judiciary independence?

-You know, first, I do not agree with notion that we do not have an independent judiciary. We do have it.

We took too many decisions that at some point, many experts have begun to question if we didn’t overwork, namely judiciary in general appeared to be outside control of state and society. It's not my position. But you could hear that, right? - When it is impossible to carry out some preliminary investigations, implement operational activities and so on, and that we have created a totally uncontrolled system from the public.

I do not agree with this. Many things, but almost basic things are associated with imposition sanctions, dismissal from office, transferred to the level of judiciary and relevant governments in system.

Well, what else can and should be done in addition? If you need something, you can do all. There are no taboos, it is only necessary to make this decision to be thoughtful. And we are ready to conduct a wide-ranging discussion with the public. The only thing I do not agree is a sweeping indictment of our judicial system and every individual judge in corruption and lack of professionalism. This is nonsense and complete nonsense. We have a stable legal system, it is developing. We have a good tradition of legal education and judicial activities.

Issue of journalists’ protection is often exacerbated in Russia and in Ukraine, as a rule, when there are victims. In your opinion, how state with rule of law can protect their "watchdogs of democracy", who are armed only with words?

- Did you know that there are professions, choosing which, people somehow understand what they are going, associated with particular degree of responsibility and danger. And, unfortunately, this is true not only for our countries but also in many other countries of the world, and your profession is included. And crimes of this kind unfortunately happen here. How this crime can be explained? In my opinion, there is only one explanation: desire to express them and to intimidate.

But I am sure that result will be counterproductive, because I doubt that people of your blood, I mean professional, all at once were frightened and quit their jobs. On the contrary, there are rather more of those that will say we're not leaving. But can anything be done to improve security? State is obliged to do so.

At the same time, we understand perfectly: each journalist can not be under protection. Law enforcement officers and prosecutors also die here, and Investigative Committee, and religious leaders. It is a struggle for all of us, the whole society against terrorism and extremism. There are victims. Of course, we have to minimize them. We will strive in every way to that.

Dmitry Medvedev once said that a responsible government must be able to admit its mistakes. Over many years of experience as president and prime minister of Russia do you have made mistakes that you are willing to admit?

- As for mistakes, then ... "Who among us is without sin or who is without sin among you, let him first cast a stone at me" - known Bible truth. Perhaps there were mistakes. But I can not say that they were some kind of system, to say that now, looking back, I would definitely fix something, I'm thinking, and I say in all sincerity: if they were, I would have said about them now.

We have unfinished something, did something at wrong time, especially in crisis. Some decisions that were taken were not working as effectively as we thought and how we would like, such as government guarantees. In fact, this is an important thing, to tackle crisis. We stood on brink of slide into recession, the long-term one, and this would entail long-lasting economic and social consequences.

System of state guarantees has not worked the way we saw it. Was it a mistake or not? Probably, it was. You should have built this work differently, but we had other tools that have worked effectively, and overall we went thought crisis with dignity and came out of it sooner than others. Look, Europe is in recession, we are rising, albeit modestly, but still our situation looks much better than in once-prosperous eurozone or even in the States. So I do not see such large system errors that I would like to return today or fix something.

You often talk about how Russia and its people are changing. And how Vladimir Putin has changed over the years in power? What do we expect from you in the near future? What are your plans? Will you, as before, harness yourself at galleys?

- Regarding slavery in the galleys: Yesterday we started to work at 10 am, finished exactly at 22.00. Something like this is going on practically all week. In general, I'm used to it. About the changes -you know the wonderful well-known saying: everything flows, everything changes. Therefore, people change, things are changing. You know, now I'll start talking to you, how I've changed - changed, of course, to the better: I can not say that I have changed for the worse. It seems to me that this is not quite correct from my side, but changes are there, of course, and they are associated with increased life and professional experience.

You are one of the few politicians between world leaders with tremendous experience in managing a vast country. You contrive to carry out major reforms, to control multi-ethnic nation and lead wonderfully entertaining, full life. Did you thought about writing an autobiography?

- About books: I don’t have time for writing, even for dictating. Once we had this idea with some of my friends that I dictate even at the end of day or at the end of week a chronology of events, I do not have time, just do not have time to even dictate. Even myself I did not have time to use recorder, no energy at the end of day, none at all. It would be interesting although.

There is a rumor that you are very much fond of fishing. Where it’s the best in Russia?

- Fishing is close to me, I love it, and I'm always happy to use, unfortunately, very rare, opportunity to sit with a fishing rod. However, sometimes even work helps. How else could I go fishing in America, and even in the company of two presidents? Seriously, the best fishing in the world, according to my personal rating is in Murmansk region and in delta of Volga River, in region of Astrakhan.

Passion for martial arts clearly stands in front among a number of your sporting ambitions. Did passion for eastern martial arts somehow reflect on your character and worldview?

As a boy, I became interested in eastern martial arts, their distinctive philosophy, culture, relationships and rules of fight conduct. Martial arts teach you to control yourself, to feel moment of urgency, to see strengths and weaknesses of opponent, to strive for the best result. You should agree, person of politics needs all this knowledge, skills and experience.

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