[main page][map of the server][news of the server][forums][guestbook][publications][hot issues]

Grigory Yavlinsky's Lecture at the Nobel Institute

May 30, 2000

This is a very important moment for me. I feel honoured to make a speech about the future of my country here in Norway at the Nobel Institute. Thank you very much for this invitation which I value very much. Thank you also for your interest in my country. This is what I find most pleasant here.

It is difficult to imagine what the content of a lecture about Russia's future might contain. I would be a little confused, if I was asked to make a lecture about Russia today. Similarly it would not be easy to make a lecture about Russia's past: there may be different views and evaluations of this issue. It is a well-known joke in Russia, that Russia is a country with an unpredictable past. (Laughter). So what can be said about its future?

However, I shall make an effort. And I want to say from the very outset that honestly it was a kind of game between us. I am more interested in your questions than my answers. For I can perceive in your questions the main burning issues of interest concerning developments in the country. It is extremely difficult to cover all the main issues of Russia in one moment, but I will make an effort to do so, at least describing the various topics.

So I would like to say that I am not going to deliver a speech on any one issue. I will try to focus on the main points. Obviously some of the thesis has to be developed. If you ask me questions, I shall try to develop these issues. Please note that some of them have considerable substance which needs to be clarified. I will elucidate the most important issues.

I am going to speak about five major issues. I am going to speak about the main points of the philosophy of ten years of transition, ten years of reforms after Gorbachev. About the general problems of Russia. I am also going to speak about the economy of Russia, its condition and the steps that in my opinion need to be taken. In addition, I am going to speak about security issues. This is the third point. Fourthly, I am going to speak about Western policy towards Russia and Eastern Europe during the transitional period, about European politicians. I was encouraged by the statesmanlike, striking presentation or Mr Brzezinski. So I feel that I must respond. I am still a representative of Russia. Fifthly, I shall try to explain my own personal view on the future of my country.

So I shall start with a very general observation. The first observation will represent an answer to the question... I think the main question today is why the reforms have been implemented successfully in Poland, the Czech Republic, Hungary and some other countries of Eastern Europe, in virtually all these countries and not in Russia. Maybe this is the most important and interesting issue. The answer is that in 1989-1991 a democratic revolution happened in these countries during those three years. Here I mean that there was a complete change of the ruling class, ruling elite, ruling group in a personal sense. Something totally different happened in Russia. In Russia there was a kind of nomenclatura clique. The same people from the Politburo of the Communist Party, its Central Committee, security services, came out on the top. Not simply other people from these bodies, but the SAME people. They simply changed their suits and instead of talking about Lenin, communism and socialism, began talking about reforms, democracy and the market.

To make this picture more convincing for the world, a group of young talented and sincere economists were hired, politically hired, and used as a decoration for the transformation. This move helped to yield about 50 billion US dollars in loans and credits for the country. And this money was used to support this development over the past ten years.

Over the past ten years the transformation of this new nomenclatura, which came to power through the economic reforms and implementation of the elements of the market economy or the capitalist system, was transformed into a semi-criminal nomenclatura. This in turn engendered the so-called oligarchic semi-criminal opaque economic and political system. This is what we had at the end of Yeltsin's rule.

Here we also need to note that Russia's transition in such circumstances taught us a very important lesson. I think that this lesson is of such scope and such importance that I would like to try and explain it here. The lesson is that capitalism which is not limited by civil society institutions, capitalism which is not limited by a legal system, the rule of law, an independent judicial system, the culture and traditions of this country, the trade unions, political parties and social activities - such capitalism turns out to be a wild animal.

In Karl Popper's book "The Open Society and Its Enemies", he pinpointed two major enemies to an open society: fascism and communism. Incidentally Russia's experience revealed that there is one more enemy - unfettered capitalism without rules, civil society, law and belief. Russia tends to be such a country.

So keeping all this in mind, I would like to say here, in the Institute where Mr. Gorbachev made several speeches, that he was right: it was not a case of revolutionary reform, it was what he called "perestroika". It was simply a reconstruction of the previous regime, a changing of the rules. The same people reconstructed the order, nominated themselves to different posts. This system still exists.

This is not attributable to a desire by these people to leave the system this way. The reasons are different and go much deeper. Yeltsin was sincere in his attempts and the young reformers wanted to change the country for the better, and Gorbachev wanted the same. But the problem goes much deeper. The problem lies elsewhere: the mentality, the approach to the solutions and the vision of the problems, came from the old days. This is why every complicated problem they faced yielded the wrong solution. And day by day, year by year all this has created a system which has really become a problem for its people.

I would also like to make two important observations here. The perestroika issue reminds me of another analogy and also clarifies why the reforms of Peter the Great to transform Russia into a European country, only really started in 1861, while for several centuries they had been very difficult and painful. This happened simply because these were reforms from the top. And that is why there was such a delay in actual reforms. Perestroika reforms were also reforms from the top. And that is why transformation in Russia will be long, difficult and painful. We should not expect rapid, sudden results in 500 days.

Now I am not going to assess this fact as either bad or good. This is simply an effect of Russia's history, which we have to take for granted. As a politician I am operating in this environment, and this is a condition of my country: like the climate, language, history or culture, this is a part of my life. So we cannot assess whether it is good or bad. I simply want to explain the environment and conditions where I am trying to make things work.

Now it would be easy to explain why the elections of the President of Russia happened as you perceived them and why Mr. Putin was elected. To jump from these observations to everyday life, it should be pointed out that over the past ten years we have had two wars, one shooting on Parliament, two defaults (and one of them was very large) and one hyperinflation in 1992 - 2.500 per cent inflation. After ten years with two wars, one shooting of the Parliament, two defaults and one hyperinflation - it is quite understandable why people felt a desire to allow such a person to be elected, why it is so difficult to address them with democratic slogans and ideas, as all the developments in Russia over the past ten years were made on behalf of a democratic power and democratic President, and people do not want to analyse the simple issue that we had seven or eight prime ministers, who were former members of the CPRF Central Committee or representatives of the KGB, except for one exception - one of them was a Komsomol leader, but he was only in power for two months.

People do not want to think about that. That is why Russia feels humiliated after such ten years, why Russian people feel very uncomfortable. They need to realise that this very humiliation is due to our own political elite. This was not done to Russia by our neighbours, or NATO, or Europe, or the United States, or somebody else. It was done by our nomenclatura class. That is why the elections of our new President were such a delicate issue, as this humiliation could have been channelled into different directions. One direction would involve building on what had been done, while the other would involve a hunt for the guilty parties.

Now let me try to explain a key issue which is most important for the people. I am going to speak about the economy. Certainly such a political context creates a special economic situation. At the moment we are witnessing economic growth, which is easy to explain - the prices on oil and import substitution within the country owing to the devaluation of the Russian currency after the crisis and less competition on internal markets. So the factors of this economic growth cannot be considered factors, which are likely to produce consistent and sustainable economic growth. This is attributable to certain major, fundamental aspects of the Russian economic system constructed over the past five years. These major economic factors, major elements of Russia's economic system, can be summed up as follows. First and foremost a very large gap between official legislation, judicial rulings and reality. Nobody even tries to connect them together. You can see that the laws and speeches are totally disconnected from reality.

Secondly, the present local administration and business people are widely using administrative and criminal tools in relationships with each other. This is very characteristic of Russia today, where these forces apply different methods to achieve economic solutions - force, administrative or even criminal pressure rather than competition, economic relations and laws.

The third tactic is well-known, even famous: it involves control over major financial flows and resources by small groups, which have their own interests and control the major financial flows and the flows of resources. Instead of public control, instead of transparency, it is controlled by small groups.

The fourth concerns the very low level of morality in Russian business.

And the fifth is very simple. The people do not think a year ahead, they are planning for a very short period of time. Clearly this cannot engender good opportunities for development.

There are clearly two major problems in Russia's economy - the shadow economy and corruption. I am not going to delve too far into these two issues. But let me issue you one figure: the shadow economy in Russia OFFICIALLY accounts for about 40% of the total. This is quite a large figure and is official. But in reality this figure is even larger. And they are issuing this figure, as it completely destroys all ideas about GDP, industrial production, and inflation - all these figures go to hell: if half your economy is in shadow economy - what do you know then about your economy?

Obviously the issue of corruption is very important. I am always asked when I make speeches abroad what the corruption. Before this meeting I made a speech in Paris to the international banking community, which gathered together 85 major banks of the world. They asked me about the corruption and I told them a long story about this and about what need to be done. And finally they harassed me once again about this issue and I said "Sorry, but I don't understand what you are asking me about. What is the meaning of your question?" I can assure you that Russian oligarchs are not keeping their money in North Korea, in Saddam Hussein's banks or in Cuba. They keep their money in New York, Paris, Switzerland and so on.

So, let us look at this problem from two sides. Not only from one side, and you know this issue. The day before yesterday the Prime Minister of France made a speech to us, claiming that he is so happy that he now has a list of the offshore zones. It was a dinner, so I did not have the chance to say "Mr. Jospin, everybody has a list of the off-shore zones: you can find this list with no problem at any airport. I have a list of your banks that are working with Russian oligarchs. That is much more interesting."

Now I would like to make a conclusion, which is in my opinion very important. There are two types of countries. There are countries that use their labour resources as their major force of development. For example, South Korea and many European countries. And there is another type of country which has natural resources as its major source of development. Russia is such a country. And I would like to provide you with such an idea for a discussion - that there may be different strategies for these countries in their economic transition. Monetary policy and macroeconomic stabilisation should come first for economies based on human resources. This provides them with a very strong incentive. It yields good results comparatively quickly. Institutional reform would be the main and most important issue for countries that dispose of unlimited resources, such as Russia. This must proceed. Because if you have unlimited resources you always uncontrolled pre-conditions for corruption, you even have a government which is not interested in anything, as they need it like water or air - where to take money, especially when the prices of oil and gas are high. Unlimited resources have made governments, to put it simply, lazy: they do not want to do anything, they are ready to pay each other, they are all the time paid by these resources, the corruption is moving them somewhere, so that it is very difficult to resist this current. It is like a drug. The pipe for Russia and Russia's economy is like a drug: instead of basing the economy on the knowledge that is needed for the next century, we still base our economy on our natural resources, rather than hi-tech and science, etc. This is a very important issue, as it seems to me, a thesis which certainly can be developed and needs to be understood.

From this viewpoint I would say that it is necessary to change the IMF approach. Why do I say this? In simple terms, I would say that in the case of Russia, the World Bank should come first, and the IMF should support what the World Bank is doing. First, because institutions are absolutely vital in Russia's situation, and macroeconomic stabilisation has to support these institutional reforms. Institutions include, for example, such things as education, the labour market, housing market, all kinds of markets. Institutions here are certainly understood not as a building, but the institutions of a market economy. For example, you cannot conduct land reform in Russia, until you have such monetary or fiscal policy, given that 25% of the population are not paid at all. Certainly here you have very low inflation. You know, no population - no inflation. It is easy. IF you are not paying money, there are no prices and no problems. But if you have such social tension, you will never be able to carry out land reform, implement democracy or anything. That is why this is a very dubious approach and a very special one of the IMF.

And the error of the Russian government can be summed up as follows: instead of approaching the IMF with its own programme and explaining Russia's needs, the Russian government always asks the IMF what it should do, saying: "tell us what we should do to get some money from you". And the bureaucrats in the IMF were always ready to issue a list of the things that need to be done.

My choice of the one of the first institutional requirements for Russia is something that is not very often used in economic analysis, but is in my opinion essential. To have a workable market economy, one of the first institutional changes and the first institutional requirement concerns the construction of a civil society. I would like to say that a market economy cannot exist in a country where policies are not based on human rights. A successful market economy is not possible there. A simple market economy is possible everywhere: while many countries have market economies, a minority are prosperous countries. This is due to the fact that private property rights are the corner stone and the very foundation of any economic reform, which is number one in a market economy, is part of human rights. I am talking here about a common approach to the human rights of all the people living in Russia and about the property rights that are the rights of every single individual, and not only the oligarchs who have private property rights in Russia. I am also talking here about rights to social security, an education, different things, including constitutional rights.

Let me try to explain why I think that this is so important. It is not simply a political or ethical problem. It is an economic one. A workable market economy needs some kind of feedback from the population, it must have assistance from the population, there needs to be a dialogue, where people, government and business interact. In Russian conditions it is a one-way road, moving only one way. You can stop paying pensions and then you can stop paying salaries, you can reduce the salaries and do whatever you want, but in such circumstances you cannot create an effective market economy, as a very important element of the market economy - the labour force - is not used in the proper way. It is not used like the labour force, like a factor. It is something else, something different. Consequently it is not working. So if the people have no rights and no ability to express themselves, you cannot have a market economy.

Consequently I would merely like to point to the main directions which are required to implement the programme which could in the medium-term improve the economic situation in Russia. First of all, taxes. They have to be transformed dramatically. But what is the main task of changing taxes? It is a deal. The tax reform in Russia is a deal between the government and the shadow economy, it is like an exchange: "we offer you low taxes in exchange for legalisation". That must be the main thing. This not simply a reduction in taxes. It is very simple and will not work. People do not pay taxes today and will not pay lower taxes. The system should be created in such a way to stimulate the shadow economy to surface. This tax reform involves a civil deal.

We have special proposals on this issue, and I dedicate a special chapter to this point, so this is not simply a slogan, it is a definite goal. By the way, I had a chance to speak to the President and we discussed this issue for about two hours. And I made this suggestion.

Certainly and secondly, we require very real, clear, political, administrative and whatever other protection of private property, especially of the shareholders. People must feel stability. The President of Russia must say that he is a man who would do everything in his power to protect the property of the people. This is extremely important.

Thirdly, the banking system needs change. We require a transparent workable banking system. Because what we call a "bank" here is not a bank. A bank in the West is an institution that takes money from the people and invests it in industry. A bank in Russia is an institution that takes money from the budget and sends this money to Cyprus. It is a different institution. (Noise in the audience).

That is what I was saying at the very outset: there is a big gap between words and reality. A bank in Russian conditions means something different, you know. We require transparency and accountability in banks.

Land reform comes next. I must confess that this is certainly a very complicated political issue. However, we will never make any progress without a land reform. Without private property and land - here I am not going to speak here about private property, as I would like to raise a different issue - without land as a civilian right we cannot move our economy forward. No one had any guarantees and no one had any confidence that this would work. This was the case for a long time. That is why it is so important. There is a special system for doing this. But this is a very important issue, as the whole privatisation issue is linked to the land issue.

Bankruptcy law and enforcement of the bankruptcy law - this is the only way to restructure industry. And this is the only way to improve privatisation results. We cannot use administrative methods to change the privatisation results, we cannot use force or bureaucracy, or nationalise them. This is all impossible. But we need to use an economic mechanism to alter the results, as they are extremely bad for Russia's economic transition. For privatisation was handled in a very special way, I would say very counter-productively. And bankruptcy is needed, as we have witnessed over a 10-year period a virtual 60% decline in industrial production and 50% decline in GDP and yet not one single bankruptcy, and no unemployment. This is strange, isn't it? (Noise in the audience).

That is why I did not start with these figures, because what could I do with these figures? I would like to explain you here the substance, and not the figures. Figures may differ here.

Investor protection, which requires stability, legal security, social responsibility, debt management. Obviously the outflow of capital from the country must be restricted - but it derives from my previous statements. It is not a special thing. It is the result of these changes. It is the end of the day, but not the morning: in the morning nobody will start to fill up what is now missing.

We definitely need an independent judiciary and functioning judiciary. These are eight or nine points: these are the major steps that Russia must take to alter the situation. Here I would like to add that it is crystal clear what should be done with the economy in Russia. Everybody knows what needs to be done. The game with different programmes is already over. Everybody knows that. The question lies in a different area: "Who can do that?" "who is prepared to do that?" "Who has the political will to do that?" For this implies violation of the interests of very influential groups. It is not an intellectual or professional question about what needs to be done. It is a serious question: how should it be done and who will take the relevant steps? And the real problem is whether the individual who must take these steps is capable of taking them or wants to take them.

Before I answer these questions, I would like to raise another issue - security, because I think that this is another part of Russia's life and future linked to the economy. I would like to say that Russia is, as you know, at the moment the country with the longest borders and most unstable regions in the world. We have the longest borders in the world populated by the largest part of the world poorest population. Maybe half of the poorest population of the world lives at our borders. And that certainly creates considerable emotions and tensions. Now we have only one secure border, that is the Western border. It is interesting to note, but this is a real change over the past ten years. Our most unstable borders are on the South and the South-East. There are different threats there, and one of them is terrorism.

Here I am approaching a very painful issue, which concerns the conflict in Chechnya. I would like to start with what is in my opinion an important perception: there is a real threat in this region. Not only for Russia. Developments in Chechnya over the past three years have led to the emergence of special troops, which I would call "militarised criminals", who are prepared to start war in different places, if there is corresponding demand. Simply, a new service is now in demand - war, you give some money and you get whatever you want. From that viewpoint, this is a real treat. I would also suggest that you look very carefully around Central Asia, Tadjikistan, Kirgizstan and Uzbekistan and not only in Chechnya. It has very deep roots.

These roots are poverty, no future and certainly widespread extremism which develops rapidly, and a lot of weapons, and there are forces that are fanning the flames. Consequently there is a real threat. And this threat has a future, I mean here a development potential. And Russia is the first to confront this threat.

Another side of this issue concerns Russia's handling of this threat. I strongly opposed the war in the Chechen Republic. I was very critical back then and I am still critical. I think that this war has a dead end, given the way in which the government is implementing its policy there. And I think that we should have adopted a completely different approach to resolve the conflict in Chechnya, including the fight with terrorism certainly. My views on this issue are well known. Indeed this was my principal position even during the elections and that affected my election results very strongly, as a kind of a military euphoria reigned in the country. Now many people see that this conflict has reached an impasse: lots of blood is being spilt, but no solution is being found, while the criminal situation there... This is a real problem which requires a very serious approach and serious thinking to find a solution.

One issue that has become very important concerns the anti-ballistic missile treaty between the Soviet Union and the United States. I think that you know the details, but I would like to tell you that there are different ways of resolving these issues. I am ready to agree that the Americans have a right to make an umbrella against the launch of anti-ballistic missiles by terrorists. However, so does Europe. So my solution is different - and I have discussed this issue several times with both Yeltsin and Putin. Let us make two umbrellas and leave this treaty untouched. Russia has at the moment six thousand warheads and the US has about 7,500 warheads. Today no system is capable of stopping the "rainfall" of nuclear warheads, if this were to happen. But it is possible to make a system that will protect the country from 20 warheads. 20 missiles or something similar. Europe needs it as much as Russia. Let us make two systems. The American system will protect them and we are going to protect Russian and Europe from anti-ballistic missiles. This will be based on Russian military technologies.

As you know, and as all experts know, the Russian missile complexes S300 and S400 are better than "Patriot". That is based on testing. The Americans know this as well. You can check the results of the tests in Greece, when Greece was buying S300 and S400 for their Cyprus needs and so on. So this is something that is very serious. This is a common issue: this involves moving Russia towards a new security system and really integrates Russia in the new environment. If we are going to make such things happen, it would be much easier to speak about Russia's future. Basically because shaking hands will simply be just like Mr. Clinton's visit to Moscow. As he was meeting Yeltsin, he was coming to Moscow simply to ask Yeltsin: "What are you doing here?" Yeltsin responded: "I am implementing reforms." "What kind of reforms?" - "Radical reforms." - "Oh, great, Mr Yeltsin..." Simply shaking hands and praising - that's it. (Laugher).

We want to move forward, we need to achieve something more real. This anti-ballistic missile system is one such thing. It is not simply a slogan. The people from Russia's General Staff (Headquarters???) and American... have been working on this, so this issue has already been discussed. And it is very hard to raise it onto a special plane, as it is necessary to move the public opinion in Europe, etc., and Americans may have doubts about that, but every time I talk about this issue, everybody says: "that is interesting".

I would like to touch upon the following issue myself in order to be provocative. First of all there is an easy answer on the question: "what should the West do?": the West must put its own policies in order, not only towards Russia, but in general. And that would represent the best possible form of help. Because we see that Western policies have at least two principal starting points - one is human rights and the other is the so-called "realpolitik". If this "realpolitik" goes together with human rights at the same time in two different directions, we feel a little confused. You can observe these problems in very practical areas - the voting at the European Parliamentary Assembly, the European ministers who say: "we apologise for the voting of this European Duma, we do not know what those people were thinking about." And this happens every time. It is very hard to put all this together. It is a special experience one feels about developments in Kosovo... I don't know what you think, but now you see that there have been no political changes there: instead of Albanian refugees, now you have Serbian refugees,... I don't want here simply to criticise, it is very easy to criticise.

In this conflict, individuals were killed, in order to protect the human rights of the other side. That is what happened in this conflict. I am not going to moralise, I merely want to explain that there was a different solution. And I want to provide you with this solution. Instead of making this television show in Rambouillet, it was simply necessary to come to Moscow and push the Russian government to stop supporting Milosevic. In this case there would be no need for the bombing. Because the key was in Moscow, and not in Rambouillet. That was a diplomatic failure, a complete diplomatic failure. This was the cause of that disaster. If they had not been afraid, they would not be in the complete mess, they would have come to Moscow and pressed Yeltsin and Chernomyrdin to move it in the right direction, simply because they were afraid. And it was possible to do this six months earlier. And nothing would have happened. And the Russian diplomacy was able to do this, but it was necessary at that time to be more sophisticated with the solution.

I can also tell you about different things... but let me report on the most recent events. Now Russia's citizens in Moscow are in most cases unable to obtain a visa to Europe. The embassies of European countries in Moscow ask people to provide them with different certificates, in actual fact three different papers. If you would like to go to the Schengen countries, you should give them one paper, proving that you have paid all your taxes: this is very important for Paris, for example, the second paper should indicate that your company has paid the taxes, and the third proves that you are on holiday. And you can hand in these three papers into the window, after spending two or three days in a queue.

First of all I would like to say that I can guarantee that not a single member of the Russian mafia is queuing at the embassies. I do not know how these people obtain their visas, but I can assure you that the people standing for five days in a queue are not from the mafia. And when a person wants to come for three days to Europe for sightseeing, to understand how people live in Europe, because one of the presidential candidates Grigory Yavlinsky said that Russia must become a part of Europe: they want to actually see what it looks like. When a person comes from Novosibirsk and spends five days in a train for a trip to Moscow to obtain a visa, he has to stand in a queue for another five or seven days. And then he spends another three days exchanging faxes that his company has paid the taxes and then his holiday is finished... In this case, it is hard to explain where Russia should move to and which direction it should take. The Russian people do not need miracles any more. They need something concrete, they need an understanding of where we are moving, what is the future, how people can live in a different way, how it is organised, how it can be. If we are invited to stay with a European family, the door should be open, so that people can take a look for themselves.

Unfortunately, everything has been moving in a different direction. I understand all the constraints, all the threats and worries, but it is very hard to convince people of anything, if you do not want to show them anything. Or let's take another example, television. We have European news in all languages except Russian, but we need Euronews in Russian - it is about 300 mln people, because the whole of the former Soviet Union is a Russian-speaking territory. This is important. It would be better if the European Commission spent money on things like this. This is really important, as people are extremely interested in developments in Madrid, about the Prime Minister of Spain, last week, especially if there are stories like the one about Mr Clinton or something similar. People need to see a different political culture. Russian television is terrible, in terms of political culture. We need to perceive that the news can be presented differently. Then people will compare things and end up saying: "we don't like what you do", but if they have never seen anything different - how can they move forward? You in Europe have been educating each other all the time, since the beginning of the century, especially after the Second World War. We have been in isolation, and in this sense we are still in isolation. The James Bond movies shown in Russia are a good thing, but that is not the solution. That's the only thing that is coming... News is absolutely necessary and something needs to be done here. This policy should be clear and understandable.

Now I am approaching the most important aspect of Western policies. The major political elite of the West - and you can read it in your newspapers - considers Russia, or, to be more precise, the Russian people as a nation which does not understand democracy, market economy, the rule of law or whatever. They simply need a strong leader, to have this leader as a friend to go to the sauna, to say that he has a strong handshake, sometimes to give him some money if he needs it: he will take care of these crazy people and we will be friends and that's it. The last articles in the Washington Post make exactly these assertions: we must not interfere, we don't care about that, the missiles targeted at us are the only thing that matters to us... This is the wrong approach. Perhaps this is the main issue, if the Western political elite thinks that the Russian people are simply "second class" citizens and they simply have a friendly Russian leader (sometimes they can kill people as in Chechnya, but this is not a problem) and it is important for them to be protected against Russia's military possibilities - this will never work. This will really isolate us and we feel it. Maybe it is not expressed and maybe I, if I were Foreign Minister of Russia would not speak about it, but this would be the driving force of my actions. And it is really visible. This has nothing to do with the feelings of the people: the people in Europe and the United States have a different approach towards Russia. They simply transferred this responsibility to the politicians. They want to help, they want to be friends, they feel that they are being deceived by the politicians. Why? Because they don't understand Russia. And they know that. They simply don't understand, they are afraid and they are using such an approach. It happened several months ago in their approach to Yeltsin: it was the wrong approach to focus solely on Mr Yeltsin personally. He was the only person that the West was speaking to and their policies were totally reliant on him. But we have a country and a society, it may not be developed and it may not be a civil society, but still...

Russia and Norway have different histories. Russia and Europe or the US have different histories. We have different histories, but we are a single civilisation. Just look at our culture and at our history - we are a single civilisation. And the next 21st century will the century of civilisations rather than histories. Look at the unification of Europe, for example. That is why we need a different approach to each other. I said that the Russian nomenclatura was involved, I would like to say that a lot of people who were very strong during the cold war are still in office, in Western countries as well. So, we have our own problems and that is also a problem, of a different type, but still a problem, because the policies are still being made in the same direction. We are one and the same civilisation and that means that our interests will coincide in the nearest future.

Now, coming to the end... What about Russia's future? A lot of people have been trying to guess it... If you read essays and studies about Russia's future where people are making guessing what Russia would be become - liberal , social-democratic or conservative... There is no answer, this is the wrong perception. In my view there is such a fairy tale in Russia that a horseman is riding along the road and approaches a stone, where it is written "if you go to the right you will lose your horse; if you go to the left, you will lose your head; if you go straight ahead you will be hungry and cold... So this is a choice that the Russian politicians and intellectuals face today - which direction Russia should take.

And my answer is different. My answer is that the person who is approaching this stone is not a horseman: this is a person who is not able to move, either left, or right, or straight ahead. After 80 years of living in very special conditions, we have lost this ability to choose a road. What is my road - my road is not to show the way to the country, not to make a prescription, but to give the country its voice. And the country will be able to speak loudly and express its will, ...freedom of speech. My task is to give the country an ability to move, to give the country hands like private property, like something the country can use to do something - a workable economy... My task is to give the country the legs which would straighten the body - like the rule of law, the feeling that the law must work... My task is to give the country a head to understand that the life of every Russian citizen is something extremely important... The main task of every Russian politician is the life of every Russian citizen, it must be in the head. And in the soul it will be Russian culture, Russian traditions, and Russian specifics, if you want. If my generation does this, Russia will find an answer to the question as to where Russia wants to go.

So, Russia's future is Russia. And I am absolutely convinced that my country will take the right direction. Thank you. (Storm of applause).

The Nowegian Nobel Institute was established in 1904. Its main duty is to assist the Nobel Committee in the task of selecting the winner of the Nobel Peace Prize. The Institute arranges meetings, seminars, lectures, and Nobel symposia. It also has its own research department and a library (ca 183.000 volumes) which covers peace, international law, modern political history, and international economics. The library is open to the public.

See also: http://www.nobel.no/indexen.html

Oslo, May 30, 2000