 We are now ready to address one of the three geographically oriented panel topics today. The title of this panel, Why is Partnership with Russia so elusive, gets to the core of a number of issues raised this morning. To moderate this distinguished panel, we are very fortunate to have a man of impeccable character and great intellect, former Assistant Secretary of Defense for International Security Policy as a member of the Board of Directors of the Institute of Peace. He's personally helped to chair our future of Europe and Russia working groups and he soon to be the nation's deputy national security advisor. Please join me in welcoming Steve Hadley. I have a very easy task this morning which is to introduce our distinguished panelists. It's easy because it's going to be very short and it's going to be short because time is very brief and we don't want to use it up with introductions and secondly these people are all very well known to you. We're privileged to have with us today to talk about this subject, Strobe Talbot who is the Deputy Secretary of State, Sergey Rogoff who is Director of the Institute of the USA and Canada, and Paula Dobryonsky who is Vice President Director of the Washington Office of the Council on Foreign Relations. Without further ado, the speakers will speak for about 10 to 12 minutes and then we will have some time at the end for questions and Strobe, I'd like you to lead off for us. Thanks Steve and first of all congratulations to you on your new assignment. Good luck to you. Somebody who's known and admired you and occasionally had a chance to work with you over the years. Your appointment gives me great confidence in many respects including with respect to the Bush administration's conduct of policy towards the Russian Federation and the other former Soviet republics. I think both to economize on time and also because this group insofar as I can see who is here, I'm semi-blinded by the light in front of us but I've already seen enough of the cast of characters to know that this is an extraordinarily sophisticated knowledgeable group and I can be almost telegraphic and making a few points at the outset. And then when Paula and Sergey have finished we can elaborate on whatever is of interest to all of you here. I think that perhaps the best way for me to frame a few observations would be to comment on the presidential transition by which I mean the one from Boris Yeltsin to Vladimir Putin. If in due course there's some interest in any other presidential transitions we can certainly talk about that but in all seriousness I think in a very real sense there is less certainty and indeed less surety about continuity on the Russian side than on the American side. I would summarize the Yeltsin presidency by pointing out several positives which were genuine accomplishments that remains to be seen whether they will be legacies. The difference between an accomplishment and a legacy is that an accomplishment is a good thing a legacy lasts. So query whether the things that I'm about to mention are in fact irreversible and going to be permanently part of the Russian Federation that the Bush administration and indeed its successors deal with in the years to come. The positives are basically five. First of all the dismantlement of the command economy, parenthesis at a huge cost in terms of systemic deformations in the economy, corruption, loans for shares, a lot of other things that we will no doubt want to talk about if time permits but I think nonetheless the fact that the old Soviet economic system was dismantled was extremely important including with regard to the second point that I would attribute largely to the Yeltsin presidency and that is Boris Yeltsin detested and therefore went a long way to demolishing or defanging the Communist Party of the Russian Federation which was a direct and unapologetic successor to the Communist Party of the Soviet Union. The third positive is that under his presidency what I will call electoralism. I use that term even though it's a little jargonedly, advisably as opposed to democracy which is a somewhat more complicated subject but the habit of the Russian people going to the polls regularly and voting for their leaders at a local, municipal level, at a regional level and at a national level set down fairly deep roots. Elections became very much the test of political legitimacy and particularly given where Russia was coming from that is a big deal. Fourth point is the relative flourishing of free media in Russia during that period and also other institutions of civil society including non-governmental organizations. And I'd like at least in the discussion to come back to that as an accomplishment which may or may not be a legacy depending on whether the Putin administration is willing to sustain and develop the trend in that direction about which I think we all have some questions. That point has to do with what the Russians call the CIS but what we, the Clinton administration have called the NIS putting the emphasis on the fact that there are new independent states rather than on the necessary permanence of the institutional umbrella, the Commonwealth of Independent States that was set up over the last ten years. I think President Yeltsin's essential posture towards the CIS was one of what I would call benign or constructive passivity and even principle. Now this really goes back to 1991 when all of these now new independent states were part of the Soviet Union and President Yeltsin wanted to use the issue of respect for the right of each Republic of the Soviet Union to be an independent state as a part of the predicate for the secession and independence and sovereignty of the Russian Federation. But nonetheless it tended to be a hallmark of his own presidency and it was apparent in the way he stood up to irredentists in the Duma over such issues as the Crimea. It was I think crucial when it came to the denuclearization of Ukraine as well as Belarus and Kazakhstan because as you all recall the denuclearization agreement involved Russian acknowledgment and guarantees of Ukrainian sovereignty. There was of course an exception during that period, a very relevant one because it continues to be problematic to the stay and that is Georgia but I would say that Georgia was more of the exception that proves the rule. Now the Yeltsin presidency also created some problems, exacerbated some problems and left some problems unanswered and among those are the fundamental dynamic or the relationship between economics and politics. A problem that I once was stupid enough to put into a tagline or a wisecrack which is the necessity of accompanying shock with therapy but the point is I think a valid one particularly in a democratic state there must be a critical mass of popular support for economic policies otherwise you get the wrong kind of explosion. You get a critical mass of opposition to the economic policies imposed from on high and that brings you blowbacks and backlashes of the kind that we saw in the December 93 election in the Zhirinovsky victory and in the 95 December election in the Zyuganov communist victory and that is basically the sort of shock therapy interaction has not been worked out in Russia. And I might add we the United States we the West have not come up with a perfect set of remedies or advice on how the Russians should get that right. Second is the question of the oligarchs which I think goes to another issue and that is the failure of the inability particularly after the 96 presidential election in Russia to institutionalize reform and we have seen that bill come due in the kind of let a hundred oligarchs bloom approach of the previous presidency in Russia which is the President Putin's administration is trying to deal with different and in some ways I think quite problematic ways. Third is the role of the security institutions I think that was left unaddressed and undefined under Yeltsin and that is created I think part of the basis for the quite remarkable assertion of institutional control that those organizations now have including in the area of Russian foreign policy. And then fourth and last I would mention Chechnya. Chechnya is of course a running challenge not only to the most basic international norms and values of human rights and the way government should behave towards their citizens but it is also a running challenge to the very viability not to mention acceptability of Russia as a democratic multi-ethnic state that deserves integration into the international community. President Putin in a very real sense rode that issue into the presidency but there were two wars in Chechnya during the Yeltsin presidency and he bears a lot of responsibility for both of them. Steve I would conclude there are obviously lots of other things that we can and we will talk about. I would conclude by identifying two issues that I would hope that you and Kandy and General Powell and the rest of the team would on behalf of President Bush give a lot of prominence to early on in both defining the issues and engaging with the Russian government. The nickname for these two issues around our office is Norms and Neighbors. Let me explain what I mean. This basically means the issue of whether Russia internally will continue to evolve towards a genuinely pluralistic society or whether in some fundamental way there will be a trend back in the other direction. Russia is a objectively is a diversified country in every conceivable respect. Language, religion, political predisposition and so forth. I think the cardinal question about the future of Russia is whether Russia will make a virtue out of that diversity and translate that diversity into governmental and institutional and civil society respect for pluralism or whether it will move back in the direction of imposing a more homogenized concept of the state and the society from above. They've been there. They've done that. I would have hoped they would have learned the lesson not entirely clear. Second, the neighbor's half of the Norms and Neighbors pairing has to do with Russian policy towards the other NIS and here I think we have seen some ominous trends particularly with regard to Georgia but also with regard to Central Asia. The trans caucus is more generally and it matters. It should be, I would hope would be a continuing cardinal principle or pillar of American foreign policy that we support Russia and reform there for two reasons. First because of the way it's evolving internally which I've already touched on and second because of the way it behaves towards its neighbors and the right way is live and let live and respect for their sovereignty and independence. I want to stop right there. Thank you, Steve. Paula? First, I'd like to thank the U.S. Institute of Peace for holding this timely conference and Dick Solomon, its president and in particular for holding this panel on Russia. In my presentation, I'd like to address primarily four issues and looking at the question of the institutionalization of our bilateral relationship with Russia. I'd like to consider first of all why the relationship with Russia is important. What are the most important priorities for dealing with Russia in the next few years? What are the promising areas of cooperation and then what are the areas which will be essentially a source of friction? And then finally the question of how to go about institutionalizing the relationship. I start with the first premise of why our relationship with Russia is so important. Even though we have a very knowledgeable audience before us today, I don't take it for granted that it's worth stating and restating particularly with many of the debates that have been ongoing about where Russia fits in and the overall scheme of U.S. policy and U.S. policy architecture. There are three primary reasons as to why the relationship is important. First Russia is a major eurasian power and even despite its current economic and political weaknesses, Russia in certain respects continues to remain not only a great power but wheels influence. Secondly, Russia is in possession of weapons of mass destruction and clearly one of our key interests is to avoid, to deter any kind of anarchy or conflict in a nation with thousands of nuclear warheads. And then thirdly and fundamentally we have a vital stake in seeing Russia become democratic, prosperous or at least reasonably stable. What happens in Russia can have an important spillover effect on neighboring countries. Clearly that of Ukraine, that of the Caucasus, that of Central Asia and others. Now as to the question as what are the most important priorities for dealing with Russia in the next few years, I would set for three fundamental priorities that I see as being before us. First, the need to secure Russia's cooperation on a range of key defense policy issues including nuclear non-proliferation and to transition towards more stable defense dominant strategic environment. Secondly, we need to gain Russia's cooperation on a range of foreign policy issues on which we have a commonality of interest while preserving our ability to vigorously protect our own interests on those foreign policy matters where we differ. For example, areas where I think engagement should be sustained clearly where we have a commonality of interest include such areas as that of combating terrorism, that of also dealing with regional hotspots, in this regard the conflict between Armenia and Azerbaijan as well as Afghanistan and there are some others. And then thirdly, to the extent we can, we should help promote political, democratic and economic trends, positive political, democratic and economic trends in Russia. But toward this end I would underscore the need to be realistic in our approach that change is not going to occur overnight, that the process is an evolutionary one, that we shouldn't be heavy-handed or preachy in this process and it's also important I think to pursue what I believe is more the course of the future and that is moving away from a large-scale assistance and pursuing targeted small-scale assistance to medium-sized, small-sized entrepreneurs' businesses. As to the third area, promising areas of cooperation and those issues which can cause friction as to this third question, let me just address this. In the area of defense security issues, I think that potential progress can in fact be secured with Russia with the pursuit of appropriate and effective statecraft. You might ask what is appropriate and effective statecraft? Just basically and fundamentally, I think it's having a very clear and precise understanding of what our interests are, our goals and objectives and also a clear understanding of what Moscow's fundamental interests are. Trying to, based on this understanding of each respective interest, to come toward a common base. In this area, particularly with the issue of nuclear non-proliferation, we do have common interests. But then you get into the question, for example, of enforcement and what makes most sense to both sides. Let me pick another area. This, of course, the question of offensive nuclear arms control start. And then there's the very issue which some deem to be most controversial. And that's the issue of ballistic missile defense. On ballistic missile defense, I have maybe what constitutes somewhat of a different view. I think this issue does not necessarily have to be the utmost cause of friction. I think it depends upon how the issue is actually handled. This can be either an area of potential cooperation or a major area of confrontation. In particular, I think it's necessary that we're unequivocal in demonstrating our commitment to ballistic missile defense. I think that we need to convey that we're serious. If Moscow thinks that we are wavering, then this end of itself, I think, can result in a cause of friction. In other words, we need to continue our discourse with them and also include them and engage them in this process. The other point I'd like to mention here is that we also have other areas in which we can develop common approaches for dealing with threats posed by, for example, Islamic fundamentalists. We're concerned about this issue. They're concerned about this issue. It's an area that I think can be explored and developed. Thirdly, there are a number of areas where we can't expect, I think, Russian support. But I think we can work towards decreasing maybe the level of hostility or confrontation and certainly temper opposition. The areas that come readily to my mind include the issue of NATO enlargement and also the issue of how to deal with the Balkans. A footnote on the issue of NATO enlargement, I think if we look to the first round, I think it could certainly be said that we proceeded with our interests in the first round, but at the same time established a mechanism for engaging Russian involvement in the NATO process without a veto. And it, I think, resulted in certainly decreasing what could have constituted maybe hostility ongoing and it was curved because of the structure in this mechanism which was established. Another area of cooperation is certainly that of promoting, I've already suggested, political economic, positive political economic trends. And the rendering of advice in that area. Finally, one area of friction that I think will continue to be a source of friction between Moscow and Washington, even despite the kind of statecraft that may be employed. And that's the question of, and the issue of Chechnya. I think that as long as the random violence ensues that this issue is going to continue to be a source of tension between us and them. Let me come to the last, and that is the question of how to institutionalize the relationship. First, the question is, should we do it? Absolutely, yes. It should be continued because the relationship is so important. It's necessary, I believe, to engage the Russians at all levels and to ensure ongoing dialogue and employ a variety of venues. My own personal preference is not to rely solely on a single official pop structure where all issues are filtered through. My own preference would be actually to deploy a multitude of contacts at various levels and per issues. For example, I would actually like to see us in many ways get more out of Washington and out of Moscow and look at engagement on the state level to the regional levels in the Russian Federation. I think that that kind of engagement is important. I've in the past have dealt with farmers, knowing that farmers in Iowa enjoy their direct contact with individual regions throughout Russia. I see this as the wave of the future. The continuance of parliamentary exchanges, Congressman Kurt Weldon had launched a series of exchanges with the Russian Duma. That kind of dialogue, I think, is quite valuable. And then other areas, law enforcement, defense defense, non-governmental organizations to non-governmental organizations. In some, the title of this panel is Why Is Partnership with Russia So Elusive? I think, really, the challenge for the new administration is recognizing that there are going to be differences that we have to contend with, being realistic about what the differences, in fact, are, and that even though you have these differences, that that certainly will not poison the overall relationship if you seek to work hard in trying to find, in the midst of differences, common ground. And I think in the areas I've suggested, I think it's very doable. Thank you so much, Steve. It's a great pleasure and honor for me to participate in this very important conference. I understand I'm the only Russian and maybe even the only non-American who is in the list of the speakers. And let me make it very clear I'm not speaking for the Russian government. I'm speaking as the director of the Institute, which is the largest think tank in the world dedicated to the study of the United States and the promotion of Russian-American relations. So these are my personal views. And I'm very glad I have this opportunity to share them, because, well, it's a new century, new millennium. And who knows? Maybe a new beginning in Russian-American relations. So we should analyze the lessons of the 90s why we failed and what we can learn from them. So I was suggested to respond to a very provocative question. Who lost Russia? Apparently, while the presumption was that I'm going to blame Strobe, I will not. Strobe never possessed Russia. But then when I think again about it, I think I know the answer. It was Yeltsin who lost Russia. And when we look at the period of the 90s, Strobe described it as a kind of a golden age of Russian democracy and market reform. Yes, there were some very important achievements, but there were very important failures. After the collapse of communism and the dissolution of the Soviet Union, the Russian Federation faced simultaneously five major challenges. The most important was to establish a new identity, because we always existed as an empire, czarist communism. We never existed as a nation state. And the multi-ethnic, multi-religious society has to have an identity which makes Russia home for all Russian citizens. And the wars in Chechnya is just one reflection of the failure to establish this new identity. The second task was transition to market economy. Yes, the command economy was destroyed, but what we created, is it really market economy? The third task was political democracy creation, building checks and balances. I think it's premature to claim that Russia today is a mature democracy. The fourth task was to integrate Russia into the international system. And as events in Kosovo and NATO environment demonstrated, Russia is not treated as an equal partner. We're assigned to some kind of a second-rate status when we are informed about the decisions which are taken by the big boys who belong. So Russia does not have a veto power Luxembourg has when the forces use the Europe. Finally, the military reform. We had to reduce our defense posture, but not simply in terms of reductions. The Russian defense posture should correspond not to the global ideology of the Soviet Union, but to the real security interests of the Russian Federation. And the Yeltsin government failed to find a resolution for this problem. So it's now the Putin government which faces the same task. And Putin is somebody who is not responsible for the failures of the 90s. And that gives me hope. Yes, there are problems and there are many problems. Rob mentioned some of them. But it is an opportunity for a new beginning. And then let's think what should be the most important step we should concentrate on before. I think the greatest problem is that neither Russia nor the United States have a strategy.