Valentina Matvienko

Chairperson of the Council of the Federation

Russia has strategic interests
both in the West and in the East

Valentina Matvienko, Chairperson of the Council of the Federation, ponders on allies and partners, «manual control», secrets of diplomacy, as well as on what advice to give to entrepreneurs that risked coming to Asian, African and Pacific Rim markets.

Valentina Ivanovna, let’s start the interview from Ukraine. On the one hand, Kiev seems to offer a peace plan, but on the other hand the war goes on and on.

There are no alternatives to the crisis except for peaceful settlement, and the plan offered by Ukraine’s president Poroshenko was welcomed by Russia. But in my opinion, it’s too early to draw far-reaching conclusions.

Refugees are still fleeing the combat operation area to the territory of Russia. According to the Federal Migration Service the total number of residents of Ukraine who came to our country reached 500 thousand persons. The overwhelming majority is women, children, and seniors. What can it be but a humanitarian disaster!

Thus, there is no place for illusions, but it’ll be hard to build a real movement for peace and civil accord. Realization of peace declarations of the Ukrainian politicians will difficult go to concrete affairs. That’s why, as the President of the Russian Federation Vladimir Putin always underlines, positive signals from Kiev should be fixed in binding documents, the legal interests and rights of residents from the South-East of Ukraine should be guaranteed by the Constitution and legislation. And of course, the negotiation process should be gradual, without any flip-flops and claims of unilateral requirements from Kiev authorities. Otherwise a new cycle of this conflict cannot be avoided.

What can Russia undertake?

Our country made and will make proposals to terminate hostilities in Ukraine, to re-establish peace and civil accord. To achieve this goal we’re ready for any contacts, negotiations, specific initiatives. Practical steps we’ve taken include the Federation Council resolution satisfying the request made by the President of Russia to withdraw permission for use of Russian armed forces in the territory of Ukraine. There are other initiatives by the President, our measures within the United Nations, the European Union, the Organization for Security and Cooperation in Europe, inter-parliamentary ties.

As I’ve already said, the atmosphere is still complicated. But I think that in Ukraine, in our bilateral relationships and in the international community there are flashes of hope to reduce the power of tension and distrust, to turn to a cooperative, active search for mutually acceptable solutions.  It’s just flashes but they are there. It means that we’ll actively pursue settlement of this situation.

Valentina Ivanovna, it’s a naive question but what will Ukraine do when it has no gas by October? Will it make peace with Moscow? And what actions will European gas consumers take?

This question should be addressed to Kiev and Brussels. I can say that on the insistence of the International Monetary Fund, natural gas prices for the public and industry increased in Ukraine from the 1st of July. Then there’s a heating season. And what then?

It’s obvious that Kiev authorities and politicians will spew charges to Russia. But any real problem can’t be resolved by propaganda. They’ll need to get natural gas from somewhere. What does it mean? Does it mean so-called unauthorized siphoning or, very simply, stealing natural gas in transit from Russia to Europe? This time round, in such a situation, we’ll be firm. After all, European consumers are interested in gas deliveries to the fullest extent as well as Russia. 

There are some signs indicating that European countries and the European Union are worried about such a situation developing. One recent confirmation of this is Austria’s constructive stance on South Stream project. Governments from other countries understand its necessity — to reliably provide Europe with natural gas. I hope that the solution to this problem will be found through joint efforts. As for Ukraine... We patiently made concessions concerning natural gas for a long time. But there’s a limit to everything. Russia isn’t bound to provide Ukraine with natural gas at the cost of Russian citizens. And Kiev actually seeks that. They know our terms. These terms are reasonable and fair. The issue depends on the Ukrainian authorities.

Nonetheless Western Governments count on sanctions. They put pressure on Russia. Even Australia stepped in and slapped them!

Where is Australia, where’s Russia and where’s Ukraine? When one looks more closely, the West puts on an act from the repertoire of the Theatre of the Absurd. Those who sparked a political crisis in their own country, plunged it into civil war and humanitarian disaster, reduced it to economic slump — they’re not under sanctions. But Russia is sanctioned; the country that for more than twenty years  lent an economic shoulder to Ukraine, dealt with problems created by continuous political distractions, changes of forms of government and political priorities. And now they try to blame us for all troubles of Ukraine, they want Russia to be «properly punished». If there is any logic in this politics, it’s a logic of political cynicism, political blackmail.

Alexander III used to say that Russia had only two allies: army and fleet... Valentina Ivanovna, let’s speak on allies. Will the Eurasian Economic Union be able to become a competitive global player?

The Eurasian Economic Union connecting Russia, Belarus and Kazakhstan wasn’t established from scratch. We gained a wealth of experience, including on the functioning of the Customs Union, that convinced us that integration opens real perspectives for the stable and dynamic development of our countries in a keenly competitive world. The Eurasian Economic Union represents a brand new degree of integration in the post-Soviet region. At the same time when establishing the Eurasian Economic Union we analysed the experience of other regional integration organizations, including the European Union. We took WTO norms and rules into account. All this means the Eurasian Economic Union is open for all interested states, up to their joining the Union. Membership advantages are easy to see. First of all, the Eurasian Economic Union is a large regional market numbering 170 million potential consumers that provides freedom of movements of capital, goods, services and labor. Secondly, members can coordinate their efforts, to execute concerted policy in key economic sectors, i.e. energy development, industry, agriculture, transport. This is not a mechanical composition but an association, a multiplication of huge potential we have. And it’s not just theory. Integration advantages are tested by practice. Over the last three years the turnover within the Customs union increased 50%, i.e. by 23 bln dollars. (2013 alone totalled 66.2 bln dollars).

Task number one is to create mechanisms allowing new possibilities with dispatch. The experience of the European Union, formed over decades demonstrates its tough to achieve. But we’ve got everything to get there faster.

Here one of the key matters is a legal framework that will settle the organization and functioning of the Eurasian Economic Union.  At this stage we withdrew from politicising the agreement. It didn’t include such matters as a single citizenship, a single currency, a common parliament, a common guarding of borders, a single export control etc. These are very important directions for cooperation. They’ll be realized and developed step by step but not at once. The principle of equal rights for all members binds the Union, i.e. decisions are consensus-based providing interests of every country to the fullest extent.

Its necessary to underline this. The agreement fixed such a degree of integration without prejudice and for which all its members were ready. Thus, the establishment of the Eurasian Economic Union creates an integration dynamic in the CIS, a gradual cooperative motion including elements of political integration. But it shouldn’t artificially accelerate the process. It’s important not to fear problems and difficulties, not to fall back but to find solutions together, bearing a whole new level of integration in mind. That’s what we do. 

A growing interest in the Eurasian Economic Union testifies that this strategy is right. Armenia and Kyrgyzstan are taking specific steps to join. We’re looking at  different types of cooperation with Vietnam, India and Israel.

In brief, the Union has good perspectives. There is a new centre for regional integration that has everything needed to become a global «pole» in foreseeable future.

By signing the 30 years natural gas contract Russia and China also contributed to multipolarity.

Indeed, it’s an event on a global scale. Some politicians and experts read it as an attempt by Russia to «break the blockade» created by the complication of relationships with the European Union and economic sanctions. But they’re wrong. Developing co-operation with China, our strategic partner, or APEC countries, isn’t realized compared to ties with Europe. Russia has strategic interests both in the West and in the East. President Vladimir Putin announced as much at the APEC summit in Vladivostok in 2012. We’re ready to develop equal and mutually beneficial relationships in all geopolitical junctures. And we act in a proper way. Among others by using such an important tool as inter-parliamentary ties.

By the way, while being in an official mission in Algeria the delegation of the Council of the Federation under your guidance strengthened not only inter-parliamentary but economic ties with this country. Is Algeria interested in it?

We place great store in developing such co-operation with Algeria. Rosneft, Gazprom, and Stroytransgaz experience has been very positively assessed. There was a discussion to expand representation of Russian business in energy management. The Russia-Algeria nuclear power co-operation agreement is almost prepared. There is reconciliation on a new inter-parliamentary agreement in regard to the GLONASS system. We develop a project to create joint-venture companies to manufacture some types of military technical products in Algeria. It’s a new format, and not only in regard to delivery but to industrial cooperation.

I was happy that during negotiations our partners highlighted the precision with which Russian partners carried out their obligations. Not too long ago it wasn’t like that. But satisfying obligations on time and in full is the key to reputation-building for the country and its companies. It was nice to see that Russian companies and our country increased their business reputation.

But why is our business so inactive in the African continent in this case and why does it concede, for example, to the French and the Chinese? Whose mistake is it? Ours or host party?

It must be acknowledged that the Russian Federation and our business are late to Africa for objective reasons. The political, economic and professional capacity created in Africa by the Soviet Union, a good capacity, was largely lost. And now we have to catch up.

I think that we succeed in it. Large companies such as Rusal, Lukoil, Gazprom, Renova, Nornikel, Alrosa, Rosatom, Rosoboroneksport, telecommunication and finance companies function now in Africa. But only 1.5% of Russian foreign investment is in Africa. It’s too little. Without doubt, our networking activities in African countries should be increased. All the more so many of these countries desire it so to allay the «western» leaning dynamic.

А Russian Union of Industrialists and Entrepreneurs/KPMG survey among foreign entrepreneurs working in Russia contains curious oversights. The first and main thing is that the success is granted if a high local authority takes private responsibility for the project realization and if the investor has good relationships with this authority. Foreigners like the «manual control»!

I’d draw another conclusion. Foreigners note one of the most important particularities of doing business in Russia. Of course, there’s no denying that it’s better when well established institutions function promptly. But institutions are built over decades. Besides, institutions represent people, i.e. public servants, managers and specialists working there. So, the human factor is everywhere, there’s no escaping it. That’s why elements of «manual control» are in all countries. Although they are various form country to country.  

For that reason there’s no issue in avoiding «manual control» because it’s impossible, but the problem is to minimize it by adopting more proficient, i.e. necessary, smart, right-to-work laws, on the one hand, and on the other hand by increasing qualification, competence and responsibility of those people who adopt such a law. It’s necessary to evaluate public works on the basis of results, to bring them under real control both on the part of the State and society. We haven’t solved this problem to the full extent and we have to resort to «manual control». What is the most important is that those people with such control execute it skilfully, effectually and honestly.

Valentina Ivanovna, you are the third ranking chief in a big country, i.e. in Russia. But according to your employment record you worked as an ambassador in Malta and Greece. With which countries it is easier to work? With small or big ones?

If there are simple professions, then they don’t include a diplomatic profession and an ambassadorship. It’s a complicated job, regardless of the country size. As for me, the activities in ambassadorship were complicated because in Malta I was the last ambassador of the Soviet Union and the first ambassador of Russia. To put it mildly, it was a complicated period. I had to present the changes that took place in our country and what they’d bring to Russia and the world.

When I came to Malta, the first thing I did was а permission for Maltese pupils, leaders, entrepreneurs and public figures to freely visit the embassy. As there was a good tennis court there, Foreign Ministry employees, ambassadors, the President’s children came with great pleasure.

Why am I saying this? For any ambassador, his/her work and for the reputation of his/her country sincerity, hospitality and kindliness are important. Because many problems are not always resolved at the official level. Diplomatic contacts are made during informal contacts, when you have trust-based relations both with a country’s leadership and with decision making influencers. If you do everything right but on paper only, results will be much more modest.

And how did you resolve operational issues?

I remember that when after signing the Belavezha accords the Soviet Union came to an end — and technically it was at night — in the morning journalists started to call and ask: «Mrs ambassador, which country do you represent? Has the Soviet Union ceased to exist?» It was very hard and bitter. At 8 a.m. I called the Minister of Foreign Affairs and proposed that I visit. He said, «I’d love you to!» I tell you what personal contacts mean. At any time I could get an appointment at the Ministry of Foreign Affairs, the Prime-Minister, the President...

I got into a car and went to the Ministry of Foreign Affairs. But you should note that by that time we didn’t receive any recommendations on matters how we should act and what we should do from Moscow. I came on my own initiative and proposed recognition of Russia as a legal successor of the Soviet Union. Whereupon the Minister told me the following, «First of all, I need a resolution of the Government because I can’t do it myself». I said, «But you are going to the meeting. Raise this subject!» I won’t repeat the arguments I came up with but the Minister said, «O.K., I’ll try».

Provided that Malta as a member of the European Union doesn’t accept decisions incompatible with the European Union. At 1pm there was a call. The Minister said, «I can greet you, the Cabinet Council accepted the decision to recognize Russia as a legal successor of the Soviet Union. At 2pm I’m holding a press conference and at 3pm journalists are coming to you. Do you have the flag of Russia?» I said, «You’re offending me, Mister Minister. I sewed it myself all night long». «Good, he said. By the way, inform your Ministry of Foreign Affairs that we’ve already recognized you as an ambassador of Russia in Malta...»

Efficiency that boggles the imagination. The «manual control» in pure form.

You can call it what you like. But Malta was the second country that recognized Russia as legal successor of the Soviet Union. I tell it to illustrate what informal contacts and relationships mean in diplomacy.

After three years of work in Malta it was hard to restrict oneself to diplomatic operations. I was known to everyone, I received several invitations every day, one day for christening, another day for marriage... A man called me: «Mrs Ambassador, I have a daughter. I want to give her a Russian name. Which name can you advise me?» Cordial and warm relationships!

Twenty years passed but I still have friends that write me and we’re still in touch. It’s a daughter of the President, the ex-Minister of Economic Affairs who was then a European Union Commissioner, just acquaintances... The diplomatic service is a complicated but very delicate sphere, and it’s very interesting.

After Malta you came to Greece, a large country with strategic importance in the Balkans...

... And an orthodox country with which Russia is connected through a long history. However there were many problems.

How did negotiations on economic issues take place?

You know, there are no easy negotiations. Negotiations always represent an intellectual brainstorming because every party has its own interests. They’re held to find a mutually acceptable, compromise and win-win solution. That’s why I had negotiations of two types, i.e. complicated and very complicated. All the more so, the 1990s were very complicated.

By the way what language was used?

In countries, especially small ones, people really appreciate when a foreigner speaks their language. I understood it and before going to Greece I started to learn Greek. The language came easily to me; I learnt it with such pleasure! When presenting my credentials I spoke Greek. The leaders’ faces changed. At first, they were surprised, and then smiled. They seem like little things but they create the atmosphere of trust.

I put a lot of effort into trying to sell our weapons to Greece. As everybody knows, Grece is a NATO member, and no NATO members may buy Russian weaponry. These were very complicated negotiations at the gantlet of resistance on the part of the Alliance member countries (I won’t enumerate them) which offered more favourable terms. We were stretched to the limit! But due to trust-based relationships with leaders of the country and the Minister of Defence we managed to do it.

Or as regards to the matter of property of the former Soviet Union that should be reregistered for Russia. This problem existed not only in Greece but in all European countries. There was an unstated EU decision not to do it because of the position of Ukraine with whom, as with other Soviet republics, we signed the «zero» agreement, i.e. we paid its foreign debts in exchange for foreign diplomatic property. But Kiev sent blocking notes to all Ministries of Foreign Affairs indicating the requirement not to register diplomatic property of the former Soviet Union for Russia. But due to very good contacts with the Greek Ministry of Justice we found a technology that allowed us to do it. And Greece was the first EU country that reregistered all property of the former Soviet Union for Russia. When I sent a telegram to the Ministry of Foreign Affairs, they didn’t believe me and said, «It can’t be true. How did you manage to do it?»

You know, I have the fondest memories both about Malta and Greece, about these great people. I’m grateful to the Governments of these countries that gave me prestigious awards. I’m grateful to fate to do such a quirk. The international diplomatic school really helped me further when I worked in the Government of Russia and when I was a governor of Saint Petersburg, and now in the Council of the Federation. This school gives a wide area of thought, negotiation skills, specialized knowledge, understanding economic and financial factors, legislation of foreign countries and many more.

How would you advise enterpreneurs who took risks to come to new marketsto Asia, Africa, the Pacific Rim? Will you advise establishing informal trust-based relationships or to wait for supply from their own Government?

There is a proverb: God helps those who help themselves. Certainly, the State must supply domestic business when it comes to foreign markets. And our State acts in this way. But for the present a serious success isn’t enough. In this domain reputation is of importance, reputation of a company and an entrepreneur. Last but not least it’s formed and consolidated through informal contacts and direct interaction. Informal relationships are of importance because they enrich a businessman in an intellectual, informative and civilized manner. 

Our foreign colleagues and partners are not only ministers, politicians, presidents of companies, members of the media, but all they’re people, personalities. When finding their trust, sympathies and goodwill we get not only additional features in our activities but we use them in a positive manner concerning our country, and we make new friends. You can never have too many friends.

Natalia Kalashnikova