Opinion Editorials & Interviews

Interview with Profile Magazine

William J. Burns, U.S. Ambassador to Russia

Profil Magazine, February 16, 2006

U.S Ambassador William Burns, who took up his duties in August of 2005, discussed Russian Chairmanship of the G-8 following the Finance Ministers meeting in Moscow, as well as other issues in contemporary political life with Georgiy Bovt, Editor-in-Chief of Profil Magazine.

There was much discussion surrounding the recent G-8 Finance Ministers Meeting that Russia's economy is not at a level appropriate for membership in the G-8. What complications and obstacles does this creates for G-8 countries and what do the world's major industrial nations expect from this year's Russian Chairmanship? What do you expect from the meetings in St. Petersburg besides nice dinners, lunches and speeches?

First, as Secretary Snow said publicly, Russia did an excellent job of managing the Finance Ministers meeting that took place in Moscow recently. It's clear that the Russian economy has grown and advanced dramatically since I last lived here ten years ago. It's not an economy as it was then -- that is, flat on its back economically. As it continues to grow and as its transparency and its integration into global economic institutions continues, in every way from accession to the WTO -- which I believe will happen sooner rather than later -- to initial public offerings, I think the case for Russia's full membership is going to be strengthened.

In general terms as you look at the G-8 process and particularly the summit meeting that Russia is going to host, I think it's important to see this as an opportunity. The truth, as I say to Russian friends, and as you well know, is that with every G-8 summit come several thousand of your closest friends in the international media. They're going to focus not just on the formal agenda items for the summit, but on every other aspect of Russia's development – its connection with the rest of the world, its internal developments. And so as I said, I think this is an opportunity, an opportunity to demonstrate the direction that Russia is headed in terms of its economy, in terms of its political system, in terms of the way in which it uses its influence in the world. It seems to me that it's best to view it as an opportunity and take advantage of it.

So, I think the answer to your question is that I think G-8 summits are about a lot more than nice lunches, and nice dinners, and nice statements – they're about tangible steps. Tangible steps in the energy sector, the non-energy sector, and the economy. The kind of thing that shows people what Russia has to offer.

Do you view Russia as a full equal member of the G-8, or do the other members view Russia as teachers view a student?

I think Russia is an important member of the G-8.

Important or equal?

Both important and equal. Look at Russia's participation this year when it hosts the Summit, and look at all the various agenda items that are being discussed. I think Russia is very much an equal member of those conversations. Russia is an equal and important member. That's true not just with regard to the formal agenda items – energy security, health and education – but with all the other things that G-8 leaders will talk about when they get together. There are lots of areas where Russian participation is very important, such as Iran and the Middle East.

If Senator McCain hears us, he probably won't agree. Recently he criticized Russia, again calling for its expulsion from the G-8, but the White House supports Russian membership. Does this mean that on a sensitive issue such as Russian democracy there is a trade-off? Where we can close our eyes to the slow down of democratic change, but cooperate in the energy sector? To support global interests like non-proliferation and energy, the United States pretends it does not notice a decrease in Russian democratic initiatives. Does this mean energy is more important than democracy? For example, the latest Russian law regulating NGOs sparked criticism, including from the U.S. administration. However, this issue is not included on the G-8 agenda.

You buried a lot of questions in that one question, so let me try to address them. First, President Bush has been very clear about his view that Russia remains, and ought to remain, a member of the G-8. We hope very much for a very successful chairmanship of the G-8 by Russia this year.

Now, the truth is we have a big and complicated relationship, so I know lots of people like to speculate about trade-offs. But, in the real world, in a big and complicated relationship like ours, you're going to have areas in which you can cooperate quite effectively and where it's important to both of our interests, and you're going to have areas where you have differences. That ought not to come as a shock to anyone. A challenge for both governments, for people on both sides, is how do you maximize those areas of cooperation, how do you build on them?

For example, we've worked quite effectively together with regard to the issue of Iran's nuclear program, and the danger of Iran acquiring nuclear weapons. There's a broad range of issues in the nuclear field where I think the United States and Russia can show even more leadership. Our two countries have unique historical responsibilities in that field – responsibilities and opportunities not only with regard to developing civilian nuclear energy, but also with regard to non-proliferation. There are some very interesting ideas that we've begun to talk about, about how can we show leadership on ideas like assuring fuel supply to developing countries under carefully-managed terms.

There are also areas of the economy, where it's in our interest, as well as Russia's, to see Russia integrated into institutions – whether it's the WTO, or other parts of the global economy. But there are areas of difference, too. We've had differences with regard to issues in Russia's neighborhood, with regard to states on Russia's borders, and how we deal with the question of stability. We both, I think, have an interest in stability in this part of the world. The American view, I think, is that stability is not a static phenomenon. In other words, unless governments and societies are opening up new opportunities for people, unless they're addressing people's concerns, you're going to sow the seeds of instability, and you play into the hands of extremists. So whether that's in a place like Uzbekistan, or in other places, that's the concern we have. On the part of the United States it's not an interest in undermining Russia's role, it's not about trying to advance American interests at Russia's expense, but there's a legitimate question, I think, about what stability means. We don't pretend to have all the answers, but you can't ignore the problem.

This is a part of the world that Russians know a lot better than we do, and where Russian interests in history, culture, language, economy, are going to run much deeper than American ones for many years to come. But, I think it's important to have an honest conversation about those issues, to minimize differences where you can.

We've also expressed concerns very plainly about, as the President and Secretary Rice have put it, what we perceive to be an over-centralization of power in Russia. Again, we say that not because we pretend to have all of the answers, but because in our experience, and the experience of many societies in the world, having a system of checks and balances, having an open media, is an important way to deal with social challenges. Corruption is a big problem in this society – many people acknowledge that. How do you fight corruption except through an independent media that can hold people accountable?

There are going to be differences on the NGO law. We've been very plain, as have many Russian NGOs, as have Europeans and some others. We saw some of those concerns met in the way in which the first draft of the law before the Duma was addressed; some concerns remain, especially about what we and many people perceive to be the vagueness and the ambiguity of some of the definitions in the NGO law – "political activity," what does that mean? So that's why we, and many others, including people in the Duma and the Public Chamber are going to pay careful attention to implementation, because it's important in our view and in Russian's own self interest that civil society grows and that NGOs can contribute, whether it's in public health, or in education, in lots of different fields. So, that's another area where we've been honest, where we've had concerns.

You have mentioned countries in Russia's "near abroad." Recently concern is growing among Russia's East European neighbors, such as Poland, about Russian natural gas supplies. How do you evaluate this problem and how do you view the future of Russian-American Energy Dialogue, especially in relationship to the YUKOS case? Recently there have been fewer negotiations on this subject.

On the first question about Ukraine, and the Ukrainian gas issue. We welcomed the fact that Russia and Ukraine were finally able to reach an agreement. We perfectly understand the interest of Russia, or any energy supplier, in moving toward market pricing – it's a perfectly reasonable position.

The question in the global economy is, of course, how you do that and how you move in a transparent way, in a way which takes into account the interest of producers as well as consumers. Our hope is that as you look at the range of other agreements that are going to get entered into this year and for many years beyond, that they'll be done in a transparent way, in a way which shows Russia's commitment to a rules-based approach to the global economy and to the energy market. It's very much in Russia's interest to continue to move in that direction.

On the question of energy dialogue, the truth is that there's been no shortage of dialogue in the past between us. Sometimes there has been a shortage of concrete steps, because you need both – you need dialogue and you need concrete steps, so that you have something to talk about. I think there have been, if you look back over the last few years, some very important steps taken. With the Sakhalin I project, Exxon-Mobil has led an effort, involving announced almost four and a half, five billion dollars in foreign direct investment. It's a big project. Conoco-Phillips has a very effective partnership with Lukoil, which is another demonstration of what our energy sectors have to offer one another.

There are on the horizon now some very concrete steps which would serve both our interests – the Shtockman gas project, for which we understand a consortium will be announced sometime in the first quarter of 2006. The expansion of the Caspian pipeline has been under discussion for a while, but it's also the kind of step, I think, that benefits all of us. So, I think, dialogue is fine, it's important, but what you need to do is translate it into practical steps.

I think if you look at the energy situation in general, and especially the opportunity for the St. Petersburg summit, the real opportunity for Russia is to paint a picture, not just for the other G-8 members, but for everybody in the world, of Russia's energy future. Here is Russia's plan for infrastructure over the next ten or twenty years. Here's how we're going to move hydrocarbons to the world market, pipelines to the Pacific, to the North, to the Baltic, expanding the CPC pipeline and other kinds of bypasses. Second, here's how we're going to get the hydrocarbons out of the ground, with decisions on Shtockman, on the further Sakhalin projects and others.

It appears we have a new aspect to energy dialogue. For instance, not long ago Mr. Bogdanchikov went to London to prepare the Rosneft IPO and was met by British marshals who handed him a court summons to be a witness in the Yuganskneftegas case. Six months ago Mr. Khristenko received the same kind of summons to a U.S. court. Do you think these sorts of events will be part of the energy dialogue as well?

One thing I've learned as a diplomat over the years is not to talk about legal matters. We've got a legal process in the United States, and I'm just not in a position to comment. I think there's lots of room for dialogue between us at the level of ministers and Mr. Khristenko had a very successful visit to the U.S. and the business delegation that he brought along with him was a very high-powered one – the President spent nearly an hour with them – so I think there's an enormous amount to be gained, not only from that experience – the travel and the dialogue – but from the concrete steps that are produced by it.

What do U.S. investors complain the most about with Russia? Can you give examples of the most successful U.S. investments?

I talked a lot about the energy sector of the economy, but it's important to remind people about two things. First, the United States has really begun to expand its own relationship with Russia. Second, Russia has a great deal more to offer the world economy than hydrocarbons, as important as they are.

In terms of American trade, you can look at four or five very concrete examples where American businesses are doing well here. Alcoa has bought a plant in Samara, has put about a quarter of a billion dollars – two hundred and fifty million dollars – into it and is doing very well. Ford has a very successful automotive plant outside St. Petersburg. Boeing has put nearly a billion and a half dollars worth of investment into Russia and they have a big design facility in Moscow with nearly thirteen hundred really top-notch Russian engineers and designers.

Companies like Intel and Microsoft, are also beginning, I think, to tap into what I've always thought of as Russia's greatest resource in the long term, which is human capital. Intel has set up a center at Nizhniy Novgorod State, which I visited a few weeks ago. Microsoft has designated Nizhniy Novgorod State as one of the ten universities in the world which it believes is a center of excellence in this field.

Investors see a booming consumer market. They see the human capital here. The truth is they also see a lot of obstacles, the same ones that Russian businesses, especially small and medium-sized enterprises see. They see corruption, they see red tape and bureaucracy, they sometimes see a lack of predictability in the tax system. There are lots of things, all of which can be very inhibiting. But despite all that, the opportunities are clear as well and so you see these very specific success stories on the part of some American businesses. I think it's going to attract a lot more American trade and investment in the future.

Let's get to my most favorite subject – visas...

I am not surprised.

According to statistics the number of visa denials to Russian applicants is going down and the number of violations by Russians of U.S. immigration laws is also going down. Assistant Secretary of State for Consular Issues Maura Harty, who recently came to Moscow, announced that the United States is prepared to issue 5-year visas to Russians. This sounds like science-fiction. What is the current situation with the bilateral consular talks?

First, on expanding the duration of visas, as Maura Harty said, our policy, with regard to Russia, with regard to any country, is based on reciprocity. So, we're quite prepared to move from where we are now towards a five-year duration of visas (currently the duration of U.S. visas for Russians is two years, "Profil" footnote), but that's going to depend on Russia moving beyond the one-year maximum that the Russian government pursues.

We've learned a lot of lessons since September 11th, 2001. There was an understandable need on our part to strengthen homeland security and to repair some of the problems in our immigration system. But I think what we've managed to do in the last couple of years, especially in Russia, is to be clear with people about what the procedures are, to reduce the waiting times for visas, and as a result I think people find the process more flexible, more predictable. This past year we issued nearly 20% more non-immigrant visas than in the year before, and nearly 50% more student visas for Russian students to come to the U.S. We approved 88% of all the non-immigrant visa applications that we got. I think we're moving in a direction that serves the interests of both of our societies. I hope very much that we'll be able to move on issues like expanding the duration, but that's a two-way street.

You are one of the State Department's main experts on the Middle East. You worked for a long time in that field. Therefore I cannot resist asking you about the U.S. perspective on the current situation in that region, especially because of the invitation to the Hamas leaders who won the elections in Palestine to visit Moscow.

It's the business of Palestinians to choose who's going to be in their Parliament, who's going to run their government, and they did make a choice in these last elections. Second, the only way forward for Palestinians, and it's been an incredibly difficult road for them in recent decades, but the only way forward for them and for the Israelis, is towards a two-state solution. And so what that means, if you want to make progress, if you want to realize the perfectly legitimate aspirations of Palestinians, but also protect the interests of Israelis, you need to have a government that's committed to a two-state solution, that recognizes Israel's right to exist, and that also recognizes that the only legitimate means to achieve that are diplomatic and peaceful, and not the manipulation of violence. Now that's not what Hamas stands for today.

Russia, because among the Quartet members, it has not formally designated Hamas as a terrorist organization, decided that it would try to use its direct channel to Hamas to reinforce those points. In other words, to emphasize that the only way forward for Palestinians, and for any Hamas-led government, is going to be to accept those basic criteria for any serious peace process. So we'll see what happens, what the reaction of Hamas is. I think what's important here is the content of the message. And everything we've heard from senior Russian officials reassures us that the message is going to be a direct and a tough one.