these have been sis systemat systematically destroyed. let's start with the elections. i refuse to use the words coming up from russia where the votes will be cast but the choice isn't there. we have a paradox that one of the great russian writers would have loved. an election that is totally predictable. we know who is going to win but it is mystifying because we don't know what it will mean. is the seat staying warm for putin to return? is he going to play hard to putin? or is the result of some script? is this like "gone with the wind" where people are on the

edge of their seat or is this like "casa blanco" we don't know but tit doesn't offer strength. it is easy to criticize russian courts and many people do it. the international bar does it and many others. who was it who said russia was in the state of unparalleled legal nickelism? it wasn't some way out creature of the right wing or washington think take team.

you may say why do we need to worry about this. 80% of russians like putins and we have other thing toes worry about like the war with china, africa, global warming, and who needs another problem. it is certainly true that russia isn't confronting us at every sta stage. we talk about with them about nukes, about north korea and it is true russia is engaged. but there are two reasons to be worried about what is happening. one is the trojectoajectory and don't want to talk about how

disgusting it is you can find on the russian media. if you speak russian, get on you tube and look at the propaganda. the music, images and the ideas. it is poisonous. it is poisoning russian public opinion. every poll is showing the same results. i would like to think they are just crooks. and all of this stuff, this is all just made up in order to fool the russian people and in fact all they want to do is steal billions of dollars. i am not that optimistic. i think some do believe it. and that is what it is scary.

it is changing the russian public opinion and people in part believe this stuff. it is leaking. it is not confined to russia. it leaks to central europe. it leaks to countries that we thought were firmly anchored in the europe atlantic camp. ron howard raised a word that i have not heard since ronald reagan, a rollback. this is us loosing countries we thought gained freedom and democracy and they are coming under the spell of russirussia. i was amazed in how successful they were at getting into b

bulgaria and latvia. i would like to say we are winning, but i can't. i think we are loosing when i travel around. and we are talking about countries inside the europe camp. it goes further west. if i sat here eight years ago and told an audience of europe watchers the severing german chancellor will sign off on an energy project that would threat threaten the entire region. and that same lead er within

weeks of leaving office would then take a lucrative position as chairman of that pipeline. and you would have called security. a you would say this is the west. they took on their audits saying they were okay and when the same companies came under pressure from the crimea, an auditor would say we said your account were in order but we were wrong.

we are seeing an extrodinanormo with russian money. if i showed up in germany with stolen eggs and said i need a bank, a lawyer and a pr firm and i can make money. people pay the police. if you turn up with a stolen oil company, $17 billion stole in daylight, and these pin stripe gen geniuses are able to spin it and make it look okay. so it is happening here on k-street. it is happening in the city of london.

if this was easy to deal with, because communist had a hard sell. but now the first time in history that the police are running thing and they are attacking us with our own money. if we run the society with the belief that only money matters. on that note, i have more to say but will say it during the question. >> i kept thinking about that, you know, pretty common view that there is n a culture aversion to political plurism and an affinity for a strong hand at the top that has run

through russian history and transcends the governmental style of the moment and that is from bizarres and to communism. to what extent do you think that is a factor in what happened under putin? >> i am cautious about taking from the history thoopreseo the. i think one of the stories of the last 10-15 years is we have gone to countries that don't have a history of good government. and we have been able to help build institutions that make government work. so i am not sure of it being doomed and never being able to be democrat.

that is why i think we should offer ukraine to a pathway to europe european citizenship. we need to let them live with more money, prosperity and freedom than the russians it will undermine them. you can not bring democracy to e ex-communist countries but we did. you can't bring democracy to ex-soviet countries we did. you can't to orthodox, or slavic countries, but we did. if we can make ukraine work they will say you can't make it work in countries named with r and that will make a big dent in

that argument. i do think history -- digesting history is difficult. i have a chapter in my book that talks about russia in the 1990's. >> you say we brought democracy and that begs the question what did we do wrong with russia? or did we? couldn't we as the best behaved differently in the timeframe that might have changed the outcome? >> when i say we, i mean people that believe in the world we do. that includes we the westerns

and the brits and we all of the people that helped win the cold war. what did we do wrong? let's do a little experiment. and youpologize -- and i apologize to those who have heard this. let's imagine hitler didn't commit suicide and the second world war never started and the third right survived the decade. let's imagine hitler died like stalin. there was admitting the holocaust happened and then it was too much and he was pushed out and then economic plight

until the mid-1980s we got a reform nazis. and he comes in and they are changing quick. and the national socialist partly loses their monopoly. the ssr is coming under control and the captive nations get their independence. so the czechs and everybody return to a world they were erased from. and then the third right collapses and we get a country called the german federation. it is mess. the economy is really taken back. we want to help the new countries, the czechs and the

danes and we want to treat the german federation when sensitivity and we feel it is difficult because knack they can not get over the nazis in one jump. so we are standoffish in the beginning. then it turns out the ss hasn't been dissolved just renamed. and a lot of senior ex-nancy politicians who came to be democrats still talk about this is germany's backyard and we have to take that into account. so the czechs and danes and dutch want to join nat o. and we say do you really? and then german politicians say imp

imp impermi imperm impermisable. and then we let them in and there is sound and furry in berlin and they say we will never recover but life goes on. then imagine that the 1990s ends in the crisis. and a new politician comes long. he is a former colonel in the ss. he is poplar and takes over as prime minister and finally that rise counscil and the dutch and

such feels bad because they they have bad memories of the ss. and they said we had no excuse for that back in the 1940s, yeah, yeah but he said the ss attract the brightest and best. he has brains and speaks foreign languages. so we swallow hard and try to calm down the former captive nations of the third right. and we say we have to get on with nukes and stuff like that. and everything is okay. and that is my analogy. i don't think we did much wrong. but if you found they were saying the munich people were legal and you bet the german

government newspaper say there were no gas chambers at the camps alarm bells would be ringing. that is what we have in russia. four occasions of the last six months we have had main stream russian media saying that stuff. >> i wanted to ask one more question and then open it up to everyone else and that is what role do you think the historical truth telling has had in provoking russians or inducing ordinary folks to yearn for a way of recapturing greatness.

you had truth telling it describing the revolution as a good thing. and you attacked stalin and lenin and reached back. you had a sense, did you not, of real drift among russians who saw themselves suddenly as without an honorable and noble history. how does that figure into all of this. >> okay. i need prep myself. who has heard of billy bran? germany can look back on figures who fought the nazis and they can look back on them with pride. and it is possible for

germany -- there is a german history out there which is st studied with impressive people that germans can be proud of. let me try a little experiment. i have to get to the right page. i will read out more and i want to see people that can come to my talks before are not allowed to -- let me just look here. ...

april the 25th. you can hardly imagine, demonstrate against the invasion. there were. and these are real heroes. of find the. there was celebrate. it was really difficult. i did not want to cheat.

he's going to find out what happened these people invented. it was the beginning. difficult conditions that something to be really proud of. celebrated the incredible human rights. and so it doesn't want that history. the military music of the stalin era, the speakers here imagine the same as german. 20th-century.

now, it was unhappy. and so it was a criminal regime that killed people. how can that be? every reason, i've encouraged much as trying it the really big historical archive. look to see what's going. freedom in russia. it on to the controversial bill read the top page. all this horrible and kinnear,

here's the sores to engage in the debate. that is the point for which the gap is being forged, history. when not using it. >> open it up for questions. there's a traveling microphone. please use it. if you would identify yourself as you begin we would appreciate that. anyone like to start? >> of some really provocative questions. your broadly right, but much too naive. >> formally associated closely with this organization. there is brilliant as ever. appreciate your comments. you mentioned the ukraine. and the new issue of freedom

house, the evaluation of democracy, the former non baltics of the republic of ukraine as a little bit ahead of georgia. after that it's all downhill. you have to countries potentially on the right road to democratic practices. can puente and tolerate that? and the next 12, 18 months we will be seeing a near broad exercise of power that will do everything possible to eliminate those growths of democracy. >> well, it's -- i would like to think there will be bothering to much. i sometimes feel quite sorry. the economy has done some very difficult issues, inflation,

overeating, the investment in difficulty. the collapse, and for structure to all these things. that alone one that wants to get involved a broad. it's encouraging that the russians have locked up. they started the addition of considerable strength. they do it time and time again. the epitome. it's this company which exists by steel.

the money goes into bank accounts and disappears. why they think it's okay to be associated with this. i do not understand. and why. i don't seem. baryon. so yes. and the georgian leader ship is capable. i think we can agree on that. one of the things and more about

, and successfully robeson to do something stupid. that would be potentially very dangerous. i don't know what's going to happen. then the economy. my feeling is that it's not going to go away the eternal optimistic less so-called russian experts who always fall in love. they represent another sharp turn toward economic and political liberalism. so was interested to see today.

one could call the united states and financial aggressor. right. heading for a job at the cato institute. i can see. russian ngos are not allowed to operate. hadn't noticed that one. a front for british intelligence you know, this is to from a remember, there were hauled from their bed in the middle of the night to me that was an echo pretty unpleasant past. all aboard russian president. the want to say something, establish my credentials as someone. in the want to say something. i might say it's a pity the some of our center of overreacted

someone. i would not go down this road. >> next question, provocative or otherwise. >> what is your perception of the eu. do you think that there ever going to adopt a common approach ? >> good question. it's that. it's not hopeless. i have said in the economists think the long slow room, starting from very low point. the long slow rally is begun. it's been really bad. using germany, austria, the netherlands and italy, france all doing in defiance of the

european collectors. it contains. i think the mob tried to overturn the swedish ambassador, on its way to the embassy. that really struck a chord. this really hit home. the cyber attack on people who were totally uninterested. and i strongly recommend preferences in the book, website . on the cyber tac it shows some very serious than ever in the car really worried.

one little thing which exemplifies, reported here. visa free travel may submitted people and should not be able to . it included all the leaders. and suddenly this would go to the russian political they'd. there were furious. in britain and. the man been one of the reasons why it deteriorated so sharply. them the ability.

we should do more of it. starting from a very low base. but i do think the public opinion is now starkly. i think people of tools, russians particular missile much cultural interchange and so. if you look it the pew research poll which showed even in germany and the poor right of 70% in 2001 and now, it's really touchy about russian. the lead to some extent, agreed on an empty. >> is there any evidence that that actually has an impact on policy?

>> we live in conditions of political freedom. that the representatives to it notice. they closed down two weeks later it was meant to be an authentic expression of the popular sentiment. suddenly they just pulled the plug out and it doesn't exist anymore. some great authenticity. so i think the thing -- and the some of them are been worried about access. one of the problems when you get very rich as you can keep the gold bars and underdog bills under your bed anymore. and keep a couple of million dollars bid it's a huge amount of money. it popped up was just the best ways to keep it. and you've got billions and billions and billions of dollars

in the western financial markets . one of the arguments and make is that we need to have the same rules on asset building as we have on money laundering. the canoe turn up at a banquet the suitcase full of hundred dollar bills. no questions asked. and then when we first target to worry about money laundering and people said you can't stop banks taking money. that's what they do. the mice will stand between hundred schoolboy in his lunch. we said no. regard have some rules on this. you cannot pay in large quantities of cash that you can't explain we've got that from. slowly but rather haphazardly that has begun to have an effect in my argument, effectively the policeman, but on do asset laundering.

just as you can't pay the western financial system of money, you also can't sell cub is on the western financial market. if you have tough rules on beneficial ownership, related party transactions and a few other things you can make a really difficult for the pseudo companies, to get into western financial markets. that think that what cost their industry problems. >> yes. hello. voice of america. thank you for the inside presentation. >> big apple little bit. >> in light of because of a recognition on wondering how likely it is for russia to recognize and whether there's anything at this point we can do of them wait-and-see how russia will react regarding charges

separatist region. >> well, the russians would be nice to recognize that. it's like a swiss cheese. they having a great difficulty hanging on. if they start saying this ethnic self-determination, there's going to be plenty of people inside russia is say, yes, i'd like some of that. the russian interest is actually know. it's lucrative. barry's money laundering things the you can do. it's a good place to go on holiday, things like that. these are pawns on a chessboard. there things you can do to make the georges nervous. but the really don't think -- is too dangerous. it's too dangerous for the kremlin to set this sort of precedent. in many ways that we have, but

actually when it became independent did you notice the kremlin jumping a pin down and saying this is a breach of international law, became independent. so you know wants to stop looking into the russians in its pretty high. i do think that what they guy was what they want. that is a perfect situation for them. you have european foreign policy exposing large chunks of european public opinion as if somehow. >> my name is molly and kneele. now with the johns hopkins university.

a one to talk about investment and so on. the western europeans. i dislike task, you don't think there's any reputable russian company in other words none should be? a wet to at least have that clarified. you think there would be awaited do a better vet in? i agree with that. i personally think that to the extent that western companies for example recently the consumer goods area for detergents and things like that, big acquisitions by western companies and to russia. i tend to believe like most people, this kind of thing is desirable and will hopefully bring about better governance. okay. does not so provocative. the other thing i would say is i would also may be tend to believe that at the margin it may be desirable to have western shareholders in something like.

would you say no? >> first of all, let me be absolutely clear. i'm not saying and all that we should have any kind of financial blockade. it's one of the great beacons of hope. and the economic independence is still better. worry about the cost and competition, maybe even the share price politicians and high taxes, that's great. that's natural. the reflexes. in the hope very much that it turns in the middle class, economic freedom. the political freedom and legality. think that's great. do everything to encourage it. if you're real russian company you're welcome. this money. come see our venture capitalists it's terrific. we should make acquisitions.

that scared. i'm worried about a disproportionate dependents. i get worried when people's livelihood is so tied up in russia that they lose sight of the moral and political dimension. and when i was -- the four years i was in moscow, people who were so determined. there were making so much money. it would go to extraordinary lengths to try to squash stories in the economist that might be bad for the market. people listening in just -- heavy lobbying attempts to try and shift the news to a more positive direction. to some extent it worked. i noticed the newspapers before by russian entities to glorify the achievements of the putin

regime. i would hate to think that that had any effect at all on their news coverage. in many cases it probably doesn't. in some cases of suspected does. we need a sense of proportion. the business with russia, that was deeply suspicious. now that becomes a small test. obviously it's preposterous to say you're doing something morally reprehensible by doing business in russia. we need to keep some kind of context. al exposed to this country? how much pressure can the kremlin put on them as a result? what sort of messages are coming out to make the best example, the german gas industry where the eu is trying to do the right thing, liberalize the european energy markets, get rid of these monopolies and to encourage interconnection between the eu. it's not a strictly free-market

approach and that's why. national security. we should not let energy policies be determined just by the interest of consumers and shareholders anymore than we did i love being interest during the cold war. so trying to do the right thing command is being blocked. is being blocked by germany because the german indigene industry does not want. but that is an example. that's what i don't want. >> with our radio free europe allotted to take you back to one of your original theories that you proposed which was that you did not know exactly the answer but you -- but now i'm going to ask you think a little bit more about it. you hypothesize that may be putin and his group are just

crux. if there are correct then we really do need to not deal with them. what is the timeline? are they just looking to make enough money until they can retire? do they want to retire at 60 or 65 or did they want to put their children in place to have a permanent delete study of the second generation of cracks. we have to wait for the grandchildren to revolt against their grandparents who are the crux? with the timeline? >> i honestly don't know. at think you need to know -- is very difficult. during the 1990's you can get to know the people. it was not that closed off. if you're lucky you might end up -- lucky, if you were from a journalistic point of view might end up. you could talk. you could get a sense of what they wanted. you can get a sense, for example

, some of the oligarchs clearly had extremely dodgy backgrounds but were desperate for respectability. that bothered by the pound and a kilo. and you can see, ask yourself, this liberal is trying to change his spots. what benchmarks and by setting to see how that goes. it is so sealed now. there was never given an interview. and it's really difficult. don't even know what they look like little of what they think. so it's difficult. i say we go back to the machine, go back to trying to -- and can't remember. criminology was will be used to use and people were very good at it to try the analyze what was going on in the kremlin. you read between the lines, who came first.

in lines and so what. his picture is on his wall. you really try and workable was pulling on. that seems to be a completely obsolete skill. went out with the telex machine. you know. now we are back. we're making -- that's all we've got. we just don't know. wish i knew the answer. >> you have no doubt heard about the attempts to get registered on the new york stock exchange. what do you think of those chances? secondly, the london market's. >> the different levels of listing. you can have adrs, over the counter market level one, two, three. i think what's interesting about transparencies, it enables you

find things out. i loved it. seemed to have the right. and nobody else. they came to the new york stock exchange and they had to do an sec filing. grade reading. the extensive time in jail for organized crime. the proceedings. it's open to legal challenge. i think the mention that there were frequently referred to as being responsible. it's what i just said, the sec funding. if you want to get on yet to do this. and so they did it. it was all there. i thought it was fair enough. at least your admitting to the

murders bandits. and you are now trying to have, you know, you get to the trouble of trying to come to the stock exchange. you have other shareholders. to some extent you may be trying to benefit them. i won't say hands off, but it was better than if they hadn't done it. so that's what i feel. these markets have rules. let's just make sure the rules are tough and well enforced and we don't get some kind of exemptions being made that enable them. presumably they have to explain their related party transactions i would love to know. >> u.s. commission on international religious freedom. yesterday ask you about what i think is the way in which russia or i should say the kremlin is building a wall of a round of self in many respects.

and one of them you mentioned has been closed at least for now there are other similar groups. factor has been a group formed for the under 12 said. >> right. >> i could never quite get the name. there's another group that is even more noxious. it actually engages the tax. so i've been seeing -- in fact, just the day, pretty specific report which upon obviously is a good sun. apparently the moscow police finally set up a unit to protect foreign citizens in moscow. of course that didn't help. but in any case that's one aspect of this of this growing

phenomenon. but another aspect is the cult of the state. and i think it's connected to these groups. that is internal politics. on the international scene i think russian exceptional as an is also a very important part of this way in which russia wants to be perceived. is an international organization . >> got it. quite a bit in my book.

the unleash something that it can't control. much to teach people politics to organize the demonstration, the people to death and that kind of thing. so i -- the state, it's interesting. a section in the book. these words don't really translates. it doesn't sound right. the whole russian political vocabulary. quite a lot of collaboration. i think seven democracy, this mixture of autocracy in nationalism was invented.

it's pretty much fits the we have. the narrative, academic, the dominant story, but there is another story, these demonstrators with this is not the only slice of russian history. can play this game of what would happen if putin was rising and british history books are american history books. you would find it rather unpleasant and authoritarian figures. j. edgar hoover would be portrayed as a hero, really strong man. fdr and mccarthy would be elevated as a great fighter for freedom you can play all sorts of games by taking countries histories and pulling strands out and trying to make a story of the. we can do, we have to fight the

historical fight and show that these other ways of looking ahead, this isn't the only way. >> either of these extreme groups. >> well, i think what i notice is that my friends don't want to talk on the phone in more. we do skype chat. that is still regarded to fun and often from other people's computers he could pick up the phone and have an interesting conversation. i don't think they have succeeded in creating all widespread kind of fear about beating foreigners in general, but it is true -- people now get all then by the fsb for having had meetings with foreigners. on multiple occasions this happens. and i think the fears commence a big country, there's still a lot

of freedom about, in particular the freedom which is very important. if you don't like him must go abroad. a kind of safety valve. doesn't have that kind of pressure cooker feeling. they're out to did you and there's no way you can get away. but it's actually the trajectory is that. you know, what seems to five things that seem impossible for years ago tomentum like a two years ago. the incarceration. >> your next. >> thank you very much. the part of defense. you ruled out the military portion of the previous cold war can you comment a little bit about the military now? the provocative actions going on at the same time that we are having a major russian u.s.

exercise in germany. the continuity between one. >> i feel slightly awestruck that i should be telling the department of defense a thing about it. thank you for giving me opporunity to a display my ignorance. the russian military is us to the soviet military. and you can just -- them and all down. you can just see, i think the exercises, it's about -- i think they have roughly 20 ships, 20 big ships that are actually capable of going to see. some of those, it's not great. so the navy in the submarines of super silent. there's some problems there.

the aviation is antique. some of these planes with they're sending, this is a tribute. they should be in a museum for military aviation. the idea that they're part of some kind of offensive capability is fairly distant. perhaps the most glaring thing is the continued failure to reform the russian land forces. if you have not read pachinko spoke, the institutional is still going on. it's still a loyal mess. what happens is that generals by bmw's but it does not penetrate down to better living conditions for the troops. so from that point of view it looks pretty bad. there are tracking a lot of money into it. depending on how you counted its

120 of the 140 author somewhere in between. but still that's quite a lot of money if your adversaries georgia, moldova or even possibly estonia and latvia or lithuania. there is enough there to do damage. and it is going up remarkably quickly, very, very rapid increase. now i suspect it's likely that the military industrial base is so rundown of the don't have the skills to make the most of the money they're putting in. certainly they don't have the shipyard capable even of repairing the one they're trying to sell to india. from the point of view it's still not. what i do worry about coming inside information is a worry about the sales of advanced weapons. for example this underwater

brocket, super cavitation, it sounds like something from mike's super cal a fragile mystic xbla dutchess. sexually very scary. coke's water vapor which means it can go very fast, 200 kilometers an hour under water. and that's quite scary if you're relying on aircraft carriers. if they start sending us to the iranians or the chinese which i read is happening or the belfast ship to ship nestle, they change the calculation whether we send a carrier group -- week, america, the carrier group to defend taiwan are what happens in western farmers. there's a kind of asymmetric which is different from what we can actually do in terms of the old fashioned confrontation.

we have so many thousand tanks cut you have some money thousand tanks. the population of 140 million in the demographics. i can see is coming back. what's really troubling is that they feel the need to do this. that is the really -- why on earth i you having staff exercises, and they are only staff exercises on how to recapture the baltic states. what possible reason is there for doing that? >> well, do you think they might want to recapture the baltic states? >> i would like to think that article five would make me think that was a bad idea. you know, one of the things with article five his aides great. and i heard from friends in brussels that they have been doing some paper exercises on how reenforce the baltic states if it came on the -- they can. you know nato has.

we have a very small squadron. they seem to miss everything that goes on. it's not as of defense of the baltic state, it's a bit like west berlin. there symbolically vital, pretty much indefensible. we use them as a trip wire. if you attack and that things will happen elsewhere. but that's not a huge comfort. you know, i have no idea, your perspective, talk afterward and i'm delighted. >> george washington university, i am intrigued by the mention of trying to list on the nyse. could you comment on the pluses and minuses from the russian point of view as far as the degree to which that could limit them or make them behave. from the western point of view about basically, you know, if it turns out that a lot of u.s.

pension funds and upholding a lot of russian companies they're is a stronger interest in maintaining good relationships. >> the thinking among the oligarchs in the 1990's is to be -- steal as much as you can as fast as you can. that worked pretty well. and what he did was to say there may be another way of doing this. that see if we can get the share price up. and he did that. and didn't believe he would do it. when i arrived in moscow in 981 of the first articles i wrote was about the fact that he had just hired. and an investment bank, the pinstripe brigade. and i had been covering all lines. that thought this was laughable. you have these guys with the

council backed out, everything they have done, the aids, the refuse to speak. you know, headquarters guarded by men with submachine guns. this is not to be taken seriously i watched and turn the wrong. the time i wrote an article saying he couldn't do it, but a thousand dollars in the shares by the town of on the apologized one well built system. and i said i will apologize. i didn't think you could do it and you did. you become a very rich man. that is an achievement. and i think that lesson has not been lost on people. if you are -- if your world

consists of shares in russian companies and uc the being traded on exchanges pushing the share price up that will make you a lot richer, perhaps more richer. it would be different, but that is why they want to get. it want to raise money which they badly need because they need to invest. also they become richer. you can use that. >> go ahead. >> mr. lucas you mentioned earlier about the role of truth telling and challenging. i was wondering, you knew and what you see as the role for journalists in the current russian political climate, if there's a wall or fed is already been muzzled to a point of infections. >> ghali it would have to be really, really bright. i mean about sport.

consumer trends. 95 percent of russian journalism is not about policies. i was in the deaths of the other day. ninety-nine channels, none of it was about policy. all this kind of stuff. he can make it very political. in that direction a lot of people don't. what is left is of philosophy. the majority shareholder. it's good to have a good journalist. but that is pretty much it.

you times which is good. if any of you have any control over anybody's advertising budget. i suggested that the tourist board took out large investments they at least could be intimidated. and you know tickets advertised. sometimes it's obviously very good. sometime this nonsense. much better. there's still a lot of interesting stuff to read, a lot of journalists to find ways of writing it. the trajectory is in the wrong direction. the space is getting more and more narrow. one of the things you can do.

we shall see. >> western journalism. how difficult is it to get of the senate? >> i think there were eight british journalists who could not get visas. the russians they said five of them can try again, three shouldn't bother. in no you get on the blacklist. you can't get off. it's not quite like in the soviet union were once you been deported you never get back in again. you are risking other people's perhaps livelier than perhaps security. he of a confidential source in the russian government organization it tells you things you know he might get a visit from the fsb if the find is been

talking. so i wouldn't say the kind of plan this time days of trying to reach people. but it's always pretty tricky. i think there's a degree of caution. we were aware that what we do can get people and trouble. so we have to be a bit careful. the circle of reporting a bit narrow. people in the kremlin and be told. are you just structure do you really believe this nonsense. >> thanks. it's good to see you again. i want to ask one of the good questions which is transition to what? what's next? a lot of people in washington still think about democracy and free markets acting perhaps

correctly would talk as though he has rollback what had been a more less and point. this is something we spend a lot of time on worrying about arguing. i want to know what your thoughts are. >> well as an economist and know it's much better to predict the past in the future. one can see this experiment running at a steam. it is a brilliant paper called reassessing russia, british military think tank which is about 1 millionth of the size of its counterparts in america or counterparts. he says to sit back and let the contradictions work themselves out. these people and not just cricket and scary but they're also incompetent. you know, a new gas field from scratch. partial exceptions. that was actually done earlier.

russia is facing a gas shortage. ahead long winters. the very dependent on gas and turkmenistan. so being optimistic, the key thing we can do is to regain on wall course. at the end of the cold war two things in conjunction. the west did an admirable and enviable just at the time the soviet system really collapsed. my worry is that my best russian friends and not particularly political. so actually what is really the difference? you know, you have organized crime, a top politician. you have -- politics, most people get on with their lives.

why should remind some much? so much of what he does is replicated in the west. and so that's why i feel it's not just a struggle between the last and the kremlin but a struggle within russia for the future of russia because these people about for russia and the struggle within the west as well >> in wrong. >> the lady at the back. >> my question is a lot of the rhetoric using, the cold war rhetoric, i have read your book yet, but a ban on the block. mention in your suggesting in limiting russia from a al qaeda. his like a lot of the rhetoric to ostracize russia about you feel that is helping to mitigate

or really minimize the threat? , assuming that is your goal. >> well, i did not quite incident the book. not give you a quick one. we have to separate pragmatism. i think we should be engaging russia much more than we have done. from example on strategic groups did it ministration as the wrong in saying we have lots. we don't have to talk to anybody i'm not an expert on this, but i don't think it makes america safer if russia is the strategic balance is so skewed in favor of america that russia goes to launch a war. worried about its first strike. we should be talking about space i really feel strongly that we need to talk, particularly in russia. we can talk in afghanistan. is not as if this movement there.

global warming, all these big issues. russia is perhaps not a giant company but china and india, it's a big country. there's been a failure to some extent to engage on these big issues. this team of russian joined the council of europe. the trajectory was very different. it looked as though there was a lot of bumps and imperfections, but were show was going toward the same sort of model of political freedom that characterized. it is no longer the case. we have midnight interrogations' , psychiatric incarceration of dissidents happening again and again. twice a pretty scary. three times, four times, five times, six times been hit his family still doesn't know where yes. it took 40 days to get them out

of the psychiatric hospital. this is something the kremlin feels no shame about coupled with this extraordinary jen a phobic rhetoric. if you're comparing americans with the third reich you can't then expects to sit down on a family vacation. we have to make it clear that words and deeds have consequences. if they want to continue despite the xenophobic rhetoric and continue, cyber attacks on all the stuff, you cannot take faraway countries to which we know nothing. it is our allies. then there have to be consequences. the regulation, russia cannot be a member of your.

in the al qaeda to my always felt that al qaeda was a botched compromise. even on islamic terms russia is not -- it makes much more sense to talk to rush of a semi we talk to china and india and brazil. and that's absolutely fine. we have lost talk about it on global imbalances, reforming the imf. let's seven c-span orgy 14 and talk about these economic issues if there's going to be a democracy that has to be. dennis. we have to send a signal that this is not anti russian are anti russia. as the kremlin and the things that they say and do the we object to. when that stops with will be delighted. russia -- of rhode about this in the book. one of the release striking things that the kremlin has gone into, for a policy.

in the alliance between russia and china is an alliance between to fund the kremlin may claim a nato's coming to our borders. there a thousand times more frightened. so -- it just doesn't make sense . china doesn't even like it. much more long-term. since through this exhausting anti-semitic speeches. russia's a great friend of the muslim world. you want to be a great friend of the muslim world? this is a genocidal attack on the muslims. and actually if your kind of an

nativist chauvinist slavic russia you might be quite scared . one could make the characterization. so dense -- was left? friends with the west. fine. a european country. great. but russia can't be friends with the west. you cannot just be friends with germany. the west is not about bilateral old-fashioned kind of concept of the inner relations. russia and france can be friends it's about values. the stalinist coast that hangs over, once that's gone, ones that historical hangup is gone and russia can be a russian country. nobody will be more pleased to announce. >> what extent is their cooperation between russia and the west on counter-terrorism?

intelligence sharing? >> last time i was looking at the secret file which will get copied in on. i don't know. i just don't know. there is some overlap. incorporation was quite good after september 11th. in know, the kgb often know quite a lot about the islamic terrorism given some of the links that existed a few years back. asher was useful. but i think this is all stuff -- and you can never really know what's going on. i do know that the fsb involvement. we are not talking the fsb because of this act of terrorism perpetrated on the streets of london which endangered the lives. that was a big deal and britain.

>> you mentioned the paper. he mimics a very important point that energy dependence is not a one-way streets. russia does not have the infrastructure descend a lot of their energy in the other direction. has to send it to the west. in that connection what do you think might happen at some point time when because of economic circumstances they're is a real serious problem the road, what does that mean for the leaders in moscow, those who want to go another direction and said this is impossible to continue stealing and manipulation. others say we have to get real and become a modern democratic society or something equivalent. >> well i do really recommend

reading -- it's in english and russian. is a former energy member, analyzed and really quite scary detail the weakness of the russians and in particular gas. there are references to it in the book. how russia codes with a gas shortage is very interesting. the country that knows russia best and the companies that know russia bust of the germans based on the 30-year gas contracts. my suspicion is as the internal price rises it becomes relatively less lucrative to export to faraway countries. western people paid real money in nobody else but anybody. the ukrainians are russians, they're charging the russians themselves more so the benefits of export diminished.

less export gas to go around. the germans will be at the front of it. i would now want to be at the back. this is a weapon the using right now. there in talks with the romanians. the romanians have a spot price. you do a long time gas contract with us to be ..

>> do they believe the united states would help them if the russian military got out of control or this yiewn phobia got out of control and would impact troops? >> two excellent questions. two probably rather uninformative answers. we got a choice. it's a tricky one. i don't know what the answer is. do we continue to support the pro-democracy people who, to put it mildly, have not been successful so far, but -- or, do we try to engage with the people who have murdered some of them and locked many of the other ones up in order to save independence?

in five years time, there may not be a bell ruse. the people are trying discreet. it was interesting, no softy when it comes to russia, and no softer with democracy. he's received the russian ambassador at the foreign ministry many a very formal way to say poe land land is ready to talk. now, those talks become substantial, but something has to happen. we're not demanding immediate dispatch on the coast or even a full independence inquiry, but perhaps let a couple people out of jail. give us something. the response has been quite positive. there's a lot of people that do not wish to end up as provenn issue civil servants and are

scared. the nationalism of the red-green kind strengthened, although the red-white nationalism failed to ignite from efforts of the opposition. he does not respond. he'll do something bad one of these days, get a cold, and if i was him, i would be, you know, watching what i eat. >> i think we have time for one more question. is there someone who would like to ask it? >> i understand that a lot of what you described, very few things to be enthusiastic about it, but you've suggested that there is few alternatives, so

what coyou say to those this is far from being the world's alternative? >> >> yeah. it could be worse. you know, i remember in 1993 when i was living the board of states, winning 23% in the elections, and people said, he could be russia's next leader. that was scary, proposing to blast and incorporate fin land back into the russian federation. you know, there's, you know, there was very interesting a coo, and the election is too risky. it can always get worse. as i said in the beginning, i'm not saying it's good, far from it. i criticize a lot. i'm not saying everything that happened is bad. i see why russians are glad about the stability.

trouble is i think it's fake. i think it is not a stable system when you have absolutely no idea what's going on, when the success or two successes produce like rabbits out of the hat, and then they disappear, and this is not yet -- fuelings is highly -- it's highly unstable. we don't know, and iceland -- a lot of thing, got this right, a piece in the times the other day saying there's a coo. it would be the way his clan has been sidelined. i think the -- what did putin do right? fiscal consolidation was right, and it was destabilizing, and the finance ministry functions really pretty well. i think in the first, the land legislation, all that, that was

good. most of the reforms started, and some were completed under putin, other things brand new, a flat tax, that was great. worked everywhere. worked in russia. it tailed off quickly. after the revolt, the reform, we didn't see -- we didn't see anything. like, the -- the administrative reform, something every first communist country grapples with, the next communism bureaucracy, efficient, accountable, transparent, really difficult. this is been done so much of every russian i know they claim, vast, predatory buick roar sigh, all levels, so caught on the efforts, and now i hope that is going to be fiscal change because people don't like paying off incompetent bureaucrats and seeing that wasted and all the rest of it, but yeah, who do i

vote for if i was a russian? it's difficult. putin? great choice. >> well thank you very much. [applause]

[applause] >> well, thank you, guys, and i love that john is making his way off the stage so when you throw things at me, you have an unimpeded view. thank you, as always, for your interest, and thank you to the heritage foundation for hosting me. it's nice to come 90 and talk about issues that i work a lot on in the privacy of my office, and i get to sort of share it with the bredder audience. let me start sort of where john ended, which is to talk about

the external first and focus on the internal. the question of russia and where russia is headed, not just ideologically, but geopolitically and geographically is something i spent a lot of time looking at, both professionally and personally. my personal history is that i'm the child of soviet, and i sort of have the culture in my blood. i have the language in my head, most of the time, and so it's -- i spent quite a bit of time in russia, and that allows you to sort of get a different bit of a sense, and what i'm struck by is that historically, and, you know, by "historically" i don't mean decades, but in recent years, we, americans, republican or democrat, we tend to look at russia as one that is striding very large on the world stage, and, by the way, you know, crack a newspaper in the last couple weeks, and you understand exactly why we do that.

we've seen russian president putin really cut quite a striking geopolitical image strong arming us into the steel sering deal, but "strong arming" is the wrong word. that suggests we were more than willing to accept a deal walking us off the ledge of military action against syria. by the way, it's a deal that is very useful for the obama administration. i would argue, much more useful for the russian federation because it enthrien shrines the stability of the regime; right? it it was an open question assad would not be in power before, it's not a question now. we need him in power to provide us with access to the nuclear weapons we have to dismantle. not only that, but, you know, the russians, all sorts of ancillary benefits accrue because syria has been since 1971 the weigh station and home port for russia's mediterranean

flotilla, so this power preserving stability is a huge coo for the russian federation. it's the tangible benefits, for us, i think, remain to be seen. from damascus, from the discussion about da damascus, yu saw president putin jet off to tehran in which he talked about russia's cooperation with the iran's nuclear program and the potential reactivation of a sale of controversial s3 # 00 missiles to the iranian regime, something tabled during the era in moscow. again, not great progress, but all is symptomatic, i think, of something that we're all sensing when we look at u.s. foreign policy. u.s. foreign policy in the middle east is not very strategic as of late, and not assertive, and as a result, we've been in effort by russia to sweep in, take the strategic

advantage, and the russian government has done a successful job, and as a result, it protocols an image of a country on the march. if you look at what's happening within russia itself, it's, i think, very clear that that perception is wrong. russia may appear strong now, internationally, but internally, it's approaching a transformation. i would argue the transformation that's going to be when it sets in, every bit as earth shattering as the collapse of the soviet union was from two decades ago, and this upheaval is really the project of three trends emerging now, but are on trajectory to intersect in a very dramatic way. to the first is very simply that russia is dying. demographically speaking. for those of you not demographers, first of all, good for you because it's not the most exciting of professions, but those who are demographers,

you know 2.1 is the magic number. during the life span of a woman, the fertility life span of o woman, she should create one child to replace herself, one child to replace her husband and a fraction thereof to account for natural disasters, hurricanes, what have you, and a population at replenishment rate. 2.1 remains stable. the united states is pretty much there. we can talk about the drivers of what drives u.s. population, but what's clear is that a whole bunch of countries, certainly in europe, are well below replenishment rate, and russia ranks near the bottom. russia, according to u.n. statistics is at 1.6 meaning russia, every generation is constricted. what this looks like in practice if you read russian statistics, and, you know, read the russian

census is that russia, as a result of both natural deaths and of immigration from the russian federation, is constricting by close to half a million people every year. putin in december of 2012, when he was giving one of his presidential campaign speeches, talked about the fact that according to the trend line that his government was seeing, by if this is not amealuated by 2050, the entire population, 142.9 million now, shrinks down by a quarter, to 107 million people. right? that is a massive constriction of the human capital that russia has currently and can access as it moves into the future. the reasons for this, i think, are many-fold, but worth drawing them out. the first is that russia, unlike the united states, never

experiences a peace dividend after the end of the cold war. in terms of investiture in social, cultural, and educational infrastructure. the way -- what this looks like in practice is that life expect tap sigh, median life expectd tan sigh for males today is the same as it is in madagascar, age 60. the age for females is 73, same as in saudi arabia, but both numbers are a decade to a decade and a half lower than the analog governments in europe and in the united states; right? so part of the reason for this is that as a function of russian gdp, health care expenditures in russia are constant since the mid-1990s. the russian government is not spending more money on the welfare of the people, and it shows, it shows in the numbers. the second reason why russia's demographics are tanking is that you're seeing a wholesale collapse of the russian family.

during the cold war, soviet families, by and large, stuck together not because they liked each other, because we know that we have members in our family that we coiled just as soon export to other cities, but because they had no choice. because populations were locked in place, and there was an an extended family network cohesive and kept together by political and economic circumstances. today, it's exactly the opposite. according to the u.n., russia has the highest divorce rate in the world. half of all russian marriages, according to the u.n., end in divorce. 6 o% of them do so in the first decade. what this means is that long term families, and as a result, the logical product of long term families, which is multiple children, is an endangered species. cow could have a family with one child, but very rarely families with four, five, or six children, necessary for

demographic replenishment. you also have a rampant culture of abortion in russia, which i think it's useful to stress on a number of levels. during the cold war, and for those of you what that are students of the cold war, you know that abortion was functionally the only available means of contraception. it was used widespread with terrible effects on female health and female fertility. this has not changed all that much. you've seen trend lines which suggest that there has been more awareness on the part of russian authorities, in terms of the negative effects, and also even some investment. in reality, the numbers are not all that much better. today, in russia, official statistics suggest that the rate of abortion is 1.2 million annually. that's equivalent to 300 an hour for a population of 142 million people. this is where it gets more grisly.

if you listen to russian doctors, private sector experts, they tell you that that network of publicly reported abortions is actually just the tip of the iceberg. in fact, the number could be twice that. it could be twice that because of private clinics, abortions off the books, not reported. that means that russians are aborting the equivalent of 2% of their live pop powlation every year, and then in a very real sense, killing off prospects for demographic growth in the process. layered on top of that is something that russian experts themselves call an epidemic in hiv/aids. this is a complex phenomena, so to unpack it for you, aids came to the russian federation because of the way the soviet union was a closed society, functionally later in historic terms, than it did to europe and the united states. when it hit the russian federation, it hit with ajen

janes, and today, something like 1% of the russian federation is estimated to be hiv positive, and this is being perpetuated and expanded by russia's own culture of drug use. russia has, curling -- according to u.n. statistics, important to stress these are u.n. statistics, not the most forward-looking on demographics, but the most impartial because of the statistical ag gageses for every country around the world. according to u.n. statistics, russian consumption alone accounts for more than a fifth of heroin used worldwide. since injust ainjeblght -- injectables are the transportation, this is linked to the problem they have with hiv/aids. now, if russia accounts for a fifth or more of all heroin consumed globally, notice the

trend line. more than one-third, according to the u.n., of injectable drug users are hiv positive in u russia. you pit it out from there, and you understand why russian experts themselves talk about hiv and aids in the context of the epidemic, one nay are a very, very hard time getting their hands around and treating. the third trend, or fourth trend, that come pounds ails is that russia's population is fleeing in a real sense. the practices of the state and conditions on economic and social terms are forcing them to eye the exits, and as a result, the pace of exodus from russia of imgrigs from russia, right now, rivals out migration seen a snch ri ago. more than 2 million russians are

estimated to have left since putin took power in the last days of 1999. one in five russians today desires to live abackward, and 40% of russians between ages of 18 and 35 on template departure, all right? this is catastrophic because it gives you a window into the thinking of the russian population at large. they are devastating all the more so because they are symptoms of a population that's lost hope in its future and one that no longer trusts that its government is a steward of its needs. now, this does not mean there's not hopeful signs. there have been as of late. you know that over the last eight months, russia a had an uptick in fertility. the demographics for the last eight months for 2013 has been positive. modestly so, but enough that the russian government decided to

declare victory, the crisis over, nothing to worry about. nonsenses. if you talk to demographers who watch over the long term, they will tell you these sort of lips or these spikes, peaks and valleys are normal, but the long term trend line, all the things i talked about, crash the russian family, abortion rate, they adjust the spiral continues downward. there's no serious russian official effort to counteract all the symptoms of the problem. rather, what you see on the part of the russian government is an effort to expand things that make russians feel good about themselveses; right? you have a 600 to 800 billion dollar effort put forth by the russian government to expand infrastructure, and i put "infrastructure" in air quotes because infrastructure means anything you want it to mean, and so the russian government has parlayed this investment infrastructure into, for

example, military modernization, and the modernization of the strategic arsenal. they put the term "infrastructure" to use when they talk about, for example, expansion of industries in certain remote towns. that's great. this is not long term investment in the types of things, health care system, education, social networks, medical recourse that will allow russians to rebound sustainably from this trend line. so this is a first trend, and i apologize for spending so much time on it, but useful to unpack what russia's demographic decline means, why it's happening, and why it's important. the second trend line is to focus on one aspect of that because russian's demographic trend line is not uniform. russia is transforming. the country's muslim population, when compared to the trend lines laid out is fairing well. they don't abort as a matter of

convenience. they don't drink generally. they don't divorce. they divorce less. they have a larger number of children per family unite, and as a result, what you see is while the russian population at large is declining, the percentage of the muslims within the russian population is expanding. today, the back of the envelope estimates that russian officials give you that muslims make up 16% of the overall population, about 21 million, but according to russian government's own estimates, by the end of the decade, one in five russians is going to be muslim. by the middle of the century, depending, again, not all projections say this, but some projections do, you rapidly approach parody. every other russian will be muslim, and that's another set of geopolitical implications to talk about later. nevertheless, the point to talk about is russia is transforming.

by the way, we're transforming. the united states is transforming. it's not a bad trend per se other than the fact that the russian muslim minority hit a glass ceiling. what you have is a population that is not well integrated, either economic or social terms, into the russian state. instead, you've seen the russian government over the last decade aid and abet the rise of a corrosive far right nationalism, groups that are supported by the kremlin to promote objectives among the population towards perfectionism, and in economic terms turned a blind eye to on the part of the russian authorities, and the as a result is that having been deprived of economic opportunities and seen as internal abroad, a term from a russian policymaker that says, you know, russia's muslims are, well, they are muslim, but not so much russian, part of an internal abred that we have to manage, not that we have to

integrate, and that's the key. theyceps the the trend line well, and as a result, you're seeing an increasing examination and increasing radicalization. the example of what i mean by this, we know our general view of the rise of radical islam in russia tends to begin and end with discussions of the north caucuses and discussions of chechnya. they are waging a grinding, bloody war of attrition against separatists in the caucuses for going on two decades. the russian government say they succeeded. trend lines say the war is far from being over, but increasingly, that problem is migrating from russia's prief rei into the russian heart. in the warrant, i was in the russian republic, and in the capital city, and there's a

street, and you literally can stand there in the middle of the street, as i did -- try not to get hit by cars, but look ahead, and you see the islamic university, the state approved, state funded, state lionized institution of religious learning. million dollar z what you see if you turn around is the mosque, the larger radical mosque in the region paid for by saudi dollars, paid for by pakistani officials who tell you, if you ask them, that we really have no

idea how to deal with this because it is a challenge, and insurgent challenge to the established religious status quo, and it's not just peaceful. last summer, two of highest religious authorities in the republic were targeted in assassination attempts, and one was successful of the the replacement -- the deputy of the entire region was killed in a car bomb. you see the growing signs of an insurgent strain of islam beginning to make its way from the per riff free, where russia had to deploy security services to quell domestic unrest for the first time since the fall of the soviet union because the military was dealing with chechnya. this is an interim matter.

this is something to watch in particular, and we'll talk about it in a minute because russia's north caucuses is increasingly on the radar; right? we're not that far away from the olympics in russia. we are concerned over the security of the regional environment there. yesterday, every sign suggests that in addition to the olympics being a boondoggle for the russian government, which they are, there's a serious security concern because what russia has promised the world that it's contained and widdled down and localized in chechnya and dag stan suggests it's not contained or localized, and, in fact, resilient and spreading, spreading elsewhere. that's the second trend line. the third trend line is that in a very real sense, and this is -- this is going to sound alarmist, but it's not, and i'll explain why. the chinese are coming. they are coming for the russians. the reason i say this is because

russia, a third of russia, geographically, sits in asia. russia had an asian pivot long before the obama administration had an asian private. concerned about accessing asian markets, doing commerce with asian states like china, but also if it can fix its territorial disputes with countries like japan, south korea, but increasingly, that area, the russian far east and western siberia, which cumulatively is 4 million square miles, it's enormous, is barren. russians are leaving. the population of western siberia in the far east declined by 20% over the last two decades. the reason why is very simple. when my parents lived in the soviet union, they were told where they could or could not live. they were given permits to work in a city, but not in others, and as a result, populations were static, stuck in place, and if you wanted to move, there was

a process, a political process that you had to go through, and as a result, throughout the soviet union, there were people working in industries in far flown locales where they would not necessarily stay if they were given a choice. with the collapse of the visa restraints and migration restraints, people are leaving, leaving for warmer climates, leaving were greener economic pastures, but they are leaving, and as a result, the territory of western siberia in the far east now, accumulatively, has a little over 25 million people. that translates out to six russians per square mile. so what this tells you is that tom clancy was wrong. you guys remember back in the 1990s, tom clancy wrote a book called "the bear and the dragon," a book about the future conflict of russia and china in which the militaries go to war. well, if you ask anyone in the russian government whether this is a reality, you know, you get an answer like what i got when i

was there in march. never going to happen. you know why it's never going to happen? when people's liberation army comes, there's not going to be in the russians to fight. there's no people. the problem with this is that if there's no people, there's no work force. that area is -- has been likened to an energy superpower. it is the economic bread bafnght of the russian federation, and the investment both in human capital and in economic terms the government makes in the region dwarfs what the russian government has done; right? places are far closer geographically to to beijing than moscow. the regions on distant east in a real sense treated by people in moscow as an economic and a political back water are increasingly transforming and beginning to view themselves as asian, generally, and chinese

specifically. that tees up a massive problem for russia because not only is russia not able to pivot to asia economically, if it simply does not have control or increasingly over that territory, it is one in which real territorial conflict can arise and arise soon. for those of you that don't know, this is a territory that accumulatively the russian government and government of china tussled over for centuries. the border was demarcated a couple years ago. demarcated in 2001, by a treaty called, you know, in typical sort of grandiosity, typical friendliness and good neighborly necessary. they tried to make it infinite with no sunset date, and the chinese negotiated, their counterpart said, no, we're good. we'll make it last for 20 years. the 2001 treaty told, what, eight years from now, and why does it?

because looking at -- into 2001, looking forward, the chinese understood that two decades since the demographic picture may look very different. we may want to revisit the issue. we may want to reclaim lost land, and as a result, you're seeing a shift in the human capital, also, already in the far east, and also in the economic capital, and that has real dire implications for russia as an energy superpower globally and as an economic power house in asia. those are the three macrotrend lines i talk about in the book. the point that i make is that by themselves each of the trend lines is deeply damming to the russian states, not fatal, but deeply damaging. if you have a russian state with the power and political capital and lill to turn around, they can, the intersection of all three is catastrophic because you -- what you see out of the russian government is increasingly a state that is

hard pressed to deal with even one of these dynamics, let alone three of them. putin's state, the state that putin and the followers built over a dozen years or so is built for the here and now, not as a long term national enterprise. what putin does abroad, and, by the way, i think all of you remember that old political saw that when you have problems at home, you go abroad; right? with that in mind, think about putin's grand standing on syria and iran. it may be not just a reflection of russian strength, maybe, but it may be a reflection of russian internal weakness; right? the state he's built simply has not dealt with these treens in a serious fashion. it's not wired that way. russian's government is more than anything else, a few years ago, talked about a form of managed democracy. they don't talk about managed democracy anymore. it is more than anything a cult

of personality built around putin and close circle of followers, kept in place by massive corruption and graft and sweet heart contracts, ten, and means attracting the real, serious, sustained international investment, fdi and other things, that are required to turn these demographic trends lines around would require dismantlement of at least part of putin's state, and that's simply not going to happen. the russian government is in a cul-de-sac of the own political making, and it's not going to go quietly into a good night, not dissolve or collapse. it could mean, and i want you to understand they are not trend lines to set in earnest in the next couple years.

what you see today is what you get. a decade or two from now, trends exert a pull on how they behave. you expect them to enhance russia's impulse; right? russia, still, in a real sense, covets territories used to be part of the soviet union. stripped away as a result of history, as a result of political accident; right? putin, himself, talked in 2008 about the collapse of the soviet union being the largest geopolitical catastrophe of the 20th century, all right? this ideological leaning to reclaim loss lands is likely to be given a shot in the arm by the loss of lands elsewhere as russia begins to lose its eastern control, the impulse to expand westward, not in political terms, mind you, but in territorial terms is reenforced, if not become simply

unquenchable. the second trend line is, and you're going to see this sooner, is it's very likely as you see rise of insurgent strain of extreme islam in places elsewhere in what's the eurasian heartland, there's a widening of a conflict between the russian state and the forces that they can't control; right? we're not talking about one chechnya, but many chechnyas, and this is only sounds like an overstatement if you did not watch the emergence of th chechnya conflict in its maturity. maturation over time has taken on a conflict of larger proportions than originally envisioned by moscow, and what the trend lines you see in the russian heartland at least have the potential to do the same. they may not, but they have the potential to do so if they are t with.

third trend line, and i'll stop there, you can imagine as russia contorts internally from ideological and religious tensions and presses west ward for demographic and economic reasons, there's heightened tensions with europe and the nato block. all right? all of this is a long way of saying what i said at the outset which is that we americans tend to see russia at face value. when putin strives for large on the world stage, when he creates a hazard geopolitical coo with the arms deal in syria, with sort of his relationship with the iran, we tend to assume that what you see is what you get. russia is arriving and has to be dealt with or accommodated to make progress on world affairs. what i'm telling you is that that might not be so simple. in fact, the real challenge for the united states in