0:00:04 > 0:00:14HARDtalk. Barring a miracle, Vladimir Putin
0:00:14 > 0:00:17will soon be back where he thinks he belongs, inside the Kremlin, as
0:00:17 > 0:00:21Russia's President. Protests about the failings of Russian democracy
0:00:21 > 0:00:28are getting louder as Moscow's foreign policy runs the risk of
0:00:28 > 0:00:34isolation. Russia's economy is highly dependent on high energy
0:00:34 > 0:00:44prices. My guess today is Vladimir Yakunin, the owner of Russian
0:00:44 > 0:00:55
0:00:55 > 0:01:02Railways. It is Putinism taking Russia down the wrong track?
0:01:02 > 0:01:09Vladimir Yakunin, a welcome too HARDtalk. Good morning. -- Welcome
0:01:09 > 0:01:16to HARDtalk. Would you agree that Russian people are hoping for a
0:01:16 > 0:01:20change, political change and social change? They're hoping for a new
0:01:20 > 0:01:24life, new dimensions. I hope we will start again. Start again, an
0:01:24 > 0:01:27interesting thought. In that context, it seems strange that
0:01:27 > 0:01:33Vladimir Putin would be trying to convince the Russian people it is
0:01:33 > 0:01:37good to go back - back to a Putin presidency. We had eight years or
0:01:37 > 0:01:41more of him in presidency already, why would a Russia, if it is
0:01:41 > 0:01:46desperate for change, invite him back? Listen, this is not the
0:01:46 > 0:01:51problem of the leader, that is the problem of the policy. If you're
0:01:51 > 0:01:54talking about policy, nowadays with the turmoil in the economic and
0:01:54 > 0:02:00political situation, it is essential to understand what the
0:02:00 > 0:02:07model of today is. You are here in the West. You are thinking about
0:02:07 > 0:02:11that. Sure, but I come back to this idea - if change is so important,
0:02:11 > 0:02:15is Putin the answer? Just quoting from the words of the deputy prime
0:02:15 > 0:02:20minister the other day, he said "the roots of many of Russia's
0:02:20 > 0:02:27economic problems are in the status quo of the political system". That
0:02:27 > 0:02:30is Putinism that is the problem. This is not Putinism. That is not a
0:02:30 > 0:02:34problem of nowadays's political system. There has been responsible
0:02:34 > 0:02:39for it for the last 12 years? Correct, that is not just one
0:02:39 > 0:02:44person, that is the society, that his society's expectations, and
0:02:44 > 0:02:49that is the way of the policies, internal and external. You are
0:02:49 > 0:02:53absolutely correct that that should change. That is exactly what Putin
0:02:53 > 0:02:57published in his three new articles. I don't mean to be rude, but is it
0:02:57 > 0:03:01not the case that there are people around Putin, and you may be one of
0:03:01 > 0:03:05them, who have known him for an awful long time and perhaps work in
0:03:05 > 0:03:09a security agencies with him, I know you were in the KGB, at least
0:03:09 > 0:03:13the Russian press tells me you were, where are you all weren't you?
0:03:13 > 0:03:17Listen, I never discuss my civil services. That is my principles.
0:03:17 > 0:03:23Not because there is something to hide, but this is my principles. I
0:03:23 > 0:03:29never discuss my youth and I never discuss my Civil Service as a
0:03:29 > 0:03:32grown-up. OK, I will leave it at that. The fact is, whether or not
0:03:32 > 0:03:36you were in the KGB, there are a whole number of people close to
0:03:36 > 0:03:41Putin who used to beat in the security apparatus, now they are at
0:03:41 > 0:03:47the top of big business, the top of the government, the bureaucracy, it
0:03:47 > 0:03:51looks, too many Russians, let alone outsiders, but this is a Kabyle of
0:03:51 > 0:03:59deeply conservative authoritarian people. Listen, I cannot agree with
0:03:59 > 0:04:04that. Whether they were in the KGB doesn't matter. It was well
0:04:04 > 0:04:09accepted in the world at that time that the school, the education of
0:04:09 > 0:04:14those people, was of the highest level. It is not only, you know,
0:04:14 > 0:04:20political brainwashing, it was also preparing the people for that kind
0:04:20 > 0:04:24of responsibility. And it takes it to a high and sophisticated level
0:04:24 > 0:04:29in the exercise of authoritarian repressive power. Many of them had
0:04:29 > 0:04:35nothing to do with the repressive apparatus, as you call it. The
0:04:35 > 0:04:42entire system, as we say, is an authoritarian, repressive system.
0:04:42 > 0:04:46Those were the kind of management beginning of that story. Now it has
0:04:46 > 0:04:50changed greatly. Talking of change, what really has changed is the
0:04:50 > 0:04:55Russian people's willingness to accept this. If you look at the
0:04:55 > 0:05:00polls, and in a country like Russia, they are not reliable, completely...
0:05:00 > 0:05:03Tell me a country where they are completely reliable? Fear point.
0:05:03 > 0:05:07What they are telling us make is that the Russian people are no
0:05:07 > 0:05:12longer prepared to accept this bargain with Putin and the people
0:05:12 > 0:05:17around him, that they will give them stability and economic growth
0:05:17 > 0:05:22and you give us loyalty, support and don't ask questions. That is
0:05:22 > 0:05:27breaking down. Looking at the most recent polls, Putin is standing at
0:05:27 > 0:05:3040-45%, where he used to be at 70- 80%. Again, we are talking about
0:05:30 > 0:05:37polls, not the exact figures, which we accepted that is not true
0:05:37 > 0:05:46anywhere. That is the tendency, you are correct. I do except the
0:05:46 > 0:05:54bargain between society and power. The civil organism of the society
0:05:54 > 0:05:58is... That is what the people are showing - the mentality of the
0:05:58 > 0:06:02people, they want democracy. That is the feeling of the people - they
0:06:02 > 0:06:07can consider democracy differently. The people, they would like to say
0:06:07 > 0:06:12their word about the policy. You know, you cannot judge by a crowd
0:06:12 > 0:06:16of 30,000. Or 20,000. I will tell you what you can judge by, perhaps.
0:06:17 > 0:06:19Maybe not the size of the crowd, but what happens to the crowd and
0:06:20 > 0:06:23the leaders of the opposition. What we have seen in the last few months
0:06:23 > 0:06:28is that leaders of the crowd of protesters get arrested. Their
0:06:28 > 0:06:32telephones are barred. That internet access is hacked. We have
0:06:32 > 0:06:36seen it with a whole host of people were trying to speak out. For you,
0:06:36 > 0:06:43as a close Putin ally, someone who knows him well, do you watch what
0:06:43 > 0:06:48is happening and think "this is wrong"? My future president is
0:06:48 > 0:06:54taking this country in the wrong direction. Firstly, when we are
0:06:54 > 0:06:59talking about opposition leaders, this is not correct. When we are
0:06:59 > 0:07:04talking about the actual leaders of so-called opposition, that was not
0:07:04 > 0:07:12them within the crowd, that was other people. People living in the
0:07:13 > 0:07:17internet. Young people. This is one point. Second point, listen,
0:07:17 > 0:07:22everywhere the state is trying to protect itself. Everywhere, but you
0:07:22 > 0:07:26are absolutely correct - you know... Hang on, I can't accept that. You
0:07:26 > 0:07:29are suggesting what the Russian state does in terms of locking up
0:07:29 > 0:07:33protesters is what happens in a democracy such as the UK or the
0:07:33 > 0:07:38United States, of course, it is not what happens at all. Yes, but look
0:07:38 > 0:07:42what happens to the people creating the movement on Wall Street, just
0:07:42 > 0:07:48several weeks ago. The police was
0:07:49 > 0:07:52considered democratic. You really think there is a direct parallel
0:07:52 > 0:07:55between the weight in which the Occupied movement is treated and
0:07:55 > 0:08:02the way in which a whole host of opposition leaders have been locked
0:08:02 > 0:08:08up, harassed, but by the state apparatus? I don't know about the
0:08:08 > 0:08:15bugging, I don't know about harassment, but I know that when a
0:08:15 > 0:08:21crowd at met for the first time on were strictly warned to be polite,
0:08:21 > 0:08:26to be very cautious and not to ruin the process. I suppose this is a
0:08:26 > 0:08:30good sign. You run one of the biggest state-owned corporations,
0:08:31 > 0:08:35businesses, in the entire scope of Russia. You have a million people,
0:08:35 > 0:08:40pretty much, in your workforce. You have 20,000 stations. A vast
0:08:40 > 0:08:43apparatus. Would you accept that when people take to the streets
0:08:43 > 0:08:47these days they are protesting about the lack of political freedom
0:08:47 > 0:08:52and also about rampant corruption and the profound failings in the
0:08:52 > 0:08:58Russian economic system? I suppose they are protesting more against
0:08:58 > 0:09:04the way of life. The feeling of injustice, which now possesses not
0:09:04 > 0:09:08only the Russian community but the world, I suppose. People are
0:09:08 > 0:09:12already more and more educated through the internet, through their
0:09:12 > 0:09:17access to education. They would like to see their country
0:09:17 > 0:09:24developing in order to service their needs. That is true. Here are
0:09:24 > 0:09:32the words of a presidential aide, he said just the other day -
0:09:32 > 0:09:36"Russia's main problems are at excessive interference of the
0:09:36 > 0:09:39government". You run a state owned railway. This is not just a
0:09:39 > 0:09:44question of interference, the state still dominates the economy,
0:09:44 > 0:09:50doesn't it? Listen, this is true. You know, if you look at the
0:09:50 > 0:09:57economic data of the United States, the amount of the state money in
0:09:57 > 0:10:02the economy exceeds 50%. This is not the question - whether of the
0:10:02 > 0:10:08state is using public monies to support some industries, not only
0:10:08 > 0:10:12the military complex. The question is - how is it done? Don't mix the
0:10:12 > 0:10:18intervention of one particular or several particular persons on the
0:10:18 > 0:10:23political level into, say, my management work. That is not right.
0:10:23 > 0:10:29I am running a state-owned company, we have a board of directors, that
0:10:29 > 0:10:34is in accordance with Russian law. 100% of the shares belonged to the
0:10:34 > 0:10:43state. No-one can dictate to me what to do but the government when
0:10:43 > 0:10:46I suppose this is right. Please, hang on a moment. Explain how your
0:10:46 > 0:10:56business works. Tell me in what ways it really has changed since
0:10:56 > 0:11:02the Soviet period? For example, just in the last year we sold
0:11:02 > 0:11:12shares, a complete package, 75% of the biggest owners of the rolling
0:11:12 > 0:11:15
0:11:15 > 0:11:18stock. We got from this selling more than 140 billion roubles.
0:11:18 > 0:11:21dare say there are people who can make a profit out of being
0:11:21 > 0:11:25associated by your business, but in the end it is still owned by the
0:11:25 > 0:11:30state and employs pretty much a million people. It not only runs
0:11:30 > 0:11:36railways, you also run clinics, hospitals, schools, you have urine
0:11:36 > 0:11:42security forces, I think you even had a riding school. -- you have
0:11:42 > 0:11:45your own that security forces. An institution like yours, frankly,
0:11:45 > 0:11:51looks very much like it did 30 years ago. This is a completely
0:11:52 > 0:11:58wrong picture. Firstly, we are working not like the Ministry. I am
0:11:58 > 0:12:05in the business here, competing with my challengers like private
0:12:05 > 0:12:09operators of the rolling stock. There are some businesses which are
0:12:09 > 0:12:13not the essential businesses of the company. When you're talking about
0:12:13 > 0:12:18hospitals, kindergartens, that is not because we would like to run
0:12:18 > 0:12:23them, but, unfortunately... No, it is not, it is because it is a
0:12:23 > 0:12:27folder of, a left over from the Soviet period. I'm asking whether
0:12:27 > 0:12:33Russia has really changed? short answer is, to my mind,
0:12:33 > 0:12:37greatly. During the period of the last 12 years, yes, greatly. We
0:12:37 > 0:12:43still have a lot of things to do, because you know there are two met
0:12:43 > 0:12:48sides fighting. One side is saying "everything should be privatised,
0:12:48 > 0:12:52the state should withdraw from any influence in Social Affairs". The
0:12:52 > 0:12:57other side is saying "no, there is only the state that should run
0:12:57 > 0:13:00everything properly in order to service the needs of the people".
0:13:00 > 0:13:06This is wrong completely, two policies. The truth is in the
0:13:07 > 0:13:11middle. During 2008, when the banks crackdown in the most liberal
0:13:11 > 0:13:15countries like the United States of America or Great Britain, who was
0:13:15 > 0:13:19behind them? The state. How can someone say that the state should
0:13:19 > 0:13:23completely withdraw from the economic Planning specifically in
0:13:23 > 0:13:27the developing economies? You talk about this middle ground that works
0:13:27 > 0:13:31- in Russia it doesn't work. Let's compare you with the other nations
0:13:31 > 0:13:38we talk about, the emerging superpowers of the world economy -
0:13:38 > 0:13:45China, the GDP has increased 5.3 ti ti1992. India, 3.5 times.
0:13:45 > 0:13:50Russia, frankly, Russia reached its 1990 GDP level only in 2007, while
0:13:50 > 0:13:58China and India have been rushing ahead with enormous growth. Russia,
0:13:58 > 0:14:03in many ways, apart from oil and gas have stagnated. That is the
0:14:03 > 0:14:08truth. That is the truth, and I suppose we have been rooted to the
0:14:08 > 0:14:13essence of this economy. One can see that they privatised at the
0:14:13 > 0:14:20middle level and small businesses. They never privatised the core of
0:14:20 > 0:14:26their economies. You know, in Russia, the status off the troika,
0:14:26 > 0:14:29they decided to privatise everything. You are saying that not
0:14:29 > 0:14:37enough state is the problem in Russia? At that time, it wasn't the
0:14:37 > 0:14:43state, it was the wrong model of getting market economy. That was
0:14:44 > 0:14:53the problem. Privatisation was not - to privatise in order to boost
0:14:54 > 0:14:56
0:14:56 > 0:15:00In China, foreign business goes into that kind she believing Bacon
0:15:00 > 0:15:07achieved what they want to without having their profits creamed off or
0:15:07 > 0:15:14a rules change. In Russia, corruption is their grandparents
0:15:14 > 0:15:24yacht foreign direct investment figures have been disastrous. -- is
0:15:24 > 0:15:28
0:15:28 > 0:15:33so rampant Europe. A matter big- company can only take 10% out of
0:15:33 > 0:15:42the pocket. All money should be invested there. In Russia it is
0:15:42 > 0:15:52free. You can do whatever you do with the money you owe owner. --
0:15:52 > 0:15:55
0:15:55 > 0:16:02your own. You are correct. Corruption is one of the Maze
0:16:02 > 0:16:07driven thought things about the economy. -- must be dreadful.
0:16:07 > 0:16:17Vladimir Putin has are not fixed it. Why does he deserve another term in
0:16:17 > 0:16:18
0:16:18 > 0:16:28office? Why has the not fix it? has bloomed over your country over
0:16:28 > 0:16:29
0:16:29 > 0:16:33the last 12 years. Russia is rated as 140 said out of 180 nations in
0:16:33 > 0:16:39terms of corruption. It is by far the most corrupt industrialised
0:16:40 > 0:16:48nation in the world. I do not trust all these ratings. You just told me
0:16:48 > 0:16:56it yourself there is a huge problem. Yes. But a place Russia so it Blair
0:16:56 > 0:17:00on the bottom is not a correct. That is not true. -- so close. Bank
0:17:00 > 0:17:08managers are running out of the windows because of the disaster of
0:17:08 > 0:17:132008. That was also corruption. We need to have civil institutions to
0:17:13 > 0:17:21control the power. That is true. Just to blame Russia as the only
0:17:21 > 0:17:28corrupt country is the fate of. is not just outsiders looking in.
0:17:28 > 0:17:33It is rations themselves. There is a fascinating new website which
0:17:33 > 0:17:37gives examples of corrupt practices in public tendering. Over the last
0:17:37 > 0:17:41year, they have come up with hundreds of millions of dollars
0:17:41 > 0:17:47worth of examples where the Russian state and public tenders have been
0:17:47 > 0:17:54issued in a fundamentally corrupt away. This is rations Dorking.
0:17:54 > 0:18:04There are all sorts of different rations. -- rations are talking.
0:18:04 > 0:18:08
0:18:08 > 0:18:13The only proof of misty is the court decisions. Nobody bears any
0:18:13 > 0:18:21responsibility in Russia. They can publish whatever they wonder with
0:18:21 > 0:18:26no responsibility. Do you think that is free information? In Russia,
0:18:26 > 0:18:30we know, there have been many examples of the journalists were
0:18:30 > 0:18:35hide-and-seek ensued the malpractice of business people and
0:18:35 > 0:18:40politicians and they have ended up dead.
0:18:40 > 0:18:47Unfortunately, some facts are there. You do not know through is
0:18:47 > 0:18:50responsible. Through it you think it might be responsible for the
0:18:50 > 0:18:59killings of independent journalists? Sometimes it is
0:18:59 > 0:19:09powerful criminal groups. There are links with caucuses. Some of them.
0:19:09 > 0:19:11
0:19:11 > 0:19:16Link to powerful players in businesses and politics? I am
0:19:16 > 0:19:23talking about how well people. Those who got their wealth not in a
0:19:23 > 0:19:27proper or acceptable way. Let's look at a wider horizon. You are in
0:19:27 > 0:19:33London to lecture on what you hope is the modernisation of Russia to a
0:19:33 > 0:19:43British audience. Russia is looking increasingly isolated. Eight looks
0:19:43 > 0:19:47
0:19:47 > 0:19:54like they are standing against the tide of history. Do you worry how
0:19:54 > 0:20:03back please sit an international audience? We are tackling this
0:20:03 > 0:20:10matter professionally. That is my strong belief that the future lies
0:20:10 > 0:20:20in greater co-operation between Russia and Europe. Exchanging, not
0:20:20 > 0:20:21
0:20:21 > 0:20:28only goods, but people exchanging ideas and speaking out. I felt
0:20:28 > 0:20:38insulted when it was broadcasted the killings of an elderly person
0:20:38 > 0:20:40
0:20:40 > 0:20:46who used to be Saddam has sent. I am not fond of his person. It is
0:20:46 > 0:20:50disgusting have the matter was tackled. You are offended by it but
0:20:50 > 0:20:56the Americans did in Iraq. There and many Russians who share your
0:20:56 > 0:21:00opinion. But right now, do you believe it is riots or ethical for
0:21:00 > 0:21:10the Russians insist they will continue to sell arms to the Syrian
0:21:10 > 0:21:12
0:21:12 > 0:21:16government led by a share -- President Assad? The have problems
0:21:16 > 0:21:26when international sanctions are being imposed on Iranians?
0:21:26 > 0:21:35sanctions are limited. I do not think anybody can blame Russia
0:21:35 > 0:21:43Railways for this. What we do, we are developing construction. It the
0:21:43 > 0:21:49end it decided to close Iran, it could be a great mistake because no
0:21:49 > 0:21:59sanctions can deal with the problems other nuclear disarmament
0:21:59 > 0:21:59
0:21:59 > 0:22:07spot security. What about answer to Syria? DC in a sense and is the
0:22:07 > 0:22:13right thing for Russia to do to sell weapons? -- do you think it
0:22:13 > 0:22:20makes sense. We need to see what is going on on the other side. Where
0:22:20 > 0:22:27do all the rebels get their weapons? A final thought. You
0:22:27 > 0:22:37identified itself a very closely as a Russian nationalist. A national
0:22:37 > 0:22:46tradition. I wonder where pick him up over the years have said, the
0:22:46 > 0:22:55collapse of the Soviet Union was a major disaster. do you share those
0:22:55 > 0:23:05feelings? I do share. When an empire was demolished in a very
0:23:05 > 0:23:07
0:23:07 > 0:23:17short route of time, been this a very tiny glow, it was not like a
0:23:17 > 0:23:18
0:23:18 > 0:23:28blow of the wind. Eight influences civilisation's. It influences
0:23:28 > 0:23:34
0:23:34 > 0:23:39society. It is interesting you say that. With the election approaching,
0:23:39 > 0:23:45with the Russian people rather have a genuine democracy and economic
0:23:45 > 0:23:52modernisation rather then all of this talk of the Soviet Union and
0:23:52 > 0:24:00Russia's great past and tradition? One should look forward. But I do
0:24:00 > 0:24:08not believe in genuine democracy. There are some aspects of democracy