country which i can say, it is very modern. in our custom@@@@@@@@@ @ @ @ @ and we have four issues left, which we cannot sort out with the americans and others. and we cannot -- we cannot figure out the concession procedure. this is not just the ability to find a compromise. we believe that this was the previous administration position. whether this was the judge or the war, whatever. something will happen, and this will change the american position, and for many years

now, i have received reports from people, that we have four or six months left, to finalize everything. and within it -- within the end of the year we will be in the world trade organization. i said that we have been discussing this for 16 years. for 13 years we have been discussing this. discussing with belarus and others and, the creating of a customs union. -- and kazastan, the creating of a customs union. people are observing and. we said, ok, if you do not want

us to be within the wto as soon as possible, then we will create a customs union which will be enforced in january the first, 2010, and then we will synchronize accession along with the two and other countries. even making that announcement, president and prime minister said that our strategic aim is to become a member of the the boat of. -- of the wto. and then how to achieve this? and when we met in st. petersburg with mr. kirk, we said we had four issues left. let's find compromises. but if you want us to always do something and the american administration does not change

the position, it is not a compromise. it is not the right way to work with russians. if you find something always, a special deal to make china a member of the wto, you have a different approaches to different countries like the ukraine, why don't you speak with us and find a real compromise which would be in the interests of americans and russians? instead, we always heard, first, do something toward the americans, or change your rules, or whatever. and if you think that there is something wrong in our regulations, we can change them, but at the same regulations exist in european countries -- but if the same regulations

existing european countries and you do not raise your voice is, why should we change them? if you want to use different chemicals, because our experts to not believe that is as healthy, or different other issues, and we in back -- and we in moscow had different meetings with my colleagues from the government and several experts, and we had prepared some compromises. it is not completely our position or yours. and we are ready to talk. and we want to accelerate our accession. the truth is that we can try to access as a customs union only

for those issues which are covered in a customs union. it is not a lot. but that finalize our accession, we need to continue bilateral negotiations, and in order to make it easier and maybe frank toward our partners, we decided to create one negotiating team which is led by russian experts who is well-known in the wto. he speaks on behalf of all three countries. whether it is in a customs union or bilateral talks, we want to make it as soon as possible, based on real compromise and understanding that the wto accession is a priority for each country within customs unions.

and it is very easy. when you talked with people who work in drafting the working group's report, they always say that 99% of pins on the -- depends on the american administration. america wants you to be in the wto, it is two or three months time. if not, then there is always an obstacle from the country, agricultural or something else. we believe, because i am responsible for this issue in this government, along with the customs union, that is in my hands, that we can finalize these issues very quickly, maybe in a few weeks. but i have to confess, and i believe in that, that it can be

done only with the help and assistance of the american administration. all of the issues, these four issues that we need to discuss with americans, they would be sorted out immediately and we do not see any possible obstacle to finalize all these talks, and then accession would be completely visible. >> i like to open up to the audience at this point on this topic. we have a lot of other topics that he address. but this issue is at the front of the agenda now. i want to see if anyone in the audience has any questions on this issue, on the wto and how to move it forward to a rapid conclusion, a positive conclusion that the prime minister -- that the deputy

prime minister obviously would like to see. would anyone raise a question on that? please identify yourself at the microphone and then ask a question. >> i am blake marshall and i was wondering if you could give us a summary of the four issues as you see them coming encapsulating the major points. how do you see those -- encryption, medicine for pharmaceuticals, etc.? >> the civil code of my country, this law was adopted just a few years ago. part four is responsible for that. the lawyers were in the american proposals. -- were against the american

proposals. we managed to persuade them, and i talked with members of the duma, and we agree that these changes are possible. so it is like a package, we can then persuade them that they need to vote for the amendments. everything is drafted. the american position is clear. we can accept it if we understand that it will help -- if it creates the wto resolvent -- resolvement. and sanctions and other roles, we agreed that the russian government can adopt a government on decision which will create a certain rule for

exporters, people who export meat to my country, to apply, and cancel the decisions which would be against american meat coming to my country. there is a special proceeding of appeal and how to cancel the legislation which is against the importing from other countries, including the states. and the other issues relating to special equipment, i need to speak more with my colleagues with special security equipment and so far. and then we have state-owned enterprises, which is the most difficult. many were invented during the soviet time. we need to understand how an

american administration would treat russian companies which are controlled by the russian government, or not controlled, somehow helps. we need to talk about this and any position from american experts that can be done on an annual basis, which is not acceptable for us. we need to understand that this system will work as a permanent one, not just on a biannual basis. we need to discuss this with secretary kirk. >> there was a question back in the press row. another one up here? [inaudible] >> i am from the u.s.-russia

business council. i want to thank you for your remarks about the business and the economy and bringing our countries closer together. we very much support that goal and it is something that we want to see accomplished with you. regarding the wto accession, could you clarify in terms of the customs union and russia's on accession, and i understand that there are four other issues. how do you swear that with the customs union and russia's goals along that line, are you saying then that the accession would move forward toward the end of this year with a customs union? dollars a customs union and the wto accession, they do not contribute to each other. customs union is a very simple

formula. we seem and -- we need the same level of customs with these two countries, and we have internal discussions to adopt these duties and protect them. it is an easy foreign -- is not that easy. and now we have agreed with them that most of the duties would be accepted on the same level as russia agreed before. all our talks with the wto members led us to a certain level of customs. the customs within the customs union will be at the same level. if we start working within the customs union from january the first, and the problem is that kazakhstan and byelorussia

negotiated the same level with other russian members. for russia, it is not the problem to access the boat of. it will be more problems for kazakhstan and no rust -- bel erus. for russia, there is no level to access the wto. >> you had discussed that with others at the wto, because you recall, there were statements after the original statement, throwing doubt on the possibility of your coming in with the customs union as a whole. you're now clarifying that by indicating the customs union

itself would have only limited impact. but have you checked that out with the wto people to know@@@@' will do everything we agreed on. we will adopt all legislation, and i brought to the states all

the legislation to create a customs union. it was not easy, a few thick volumes, and a year ago several presidents agreed that the customs union would be in force here earlier than planned, because the original plan was january 1, 2011. we wanted them to feel comfortable that we're not doing something behind their knowledge. and then when it was announced, we received an immediate signal from the secretary of the wto that it was not possible because it had never happened. there is no precedent how to accept a customs union as a member. we said, ok, if it is not, we

will speak with lawyers. we hired a law firm which gave us advice, saying that the scope of this subject which is ruled by the customs union, in this sphere, we can try to apply as one member. but with everything else, we need to apply as a nation. we said, ok, we're pretty flexible. we can do it in different formats. we only need to do it in no way that our presidents feel comfortable that we're doing in a way that we agree. we went to a negotiating team and they started talking and in behalf of a customs union, and from different -- three debris countries, russia, byelorussia,

and kazakhstan. we announce that we would do that on behalf of the customs union, but they said, no, and it is not, and we are flexible. just let us in. [laughter] >> we wish you the best success ain their effort and we hope tht the customs union does not further delay the entrance into the wto. i like the way but a first when you said you wanted to get accession achieved first and then move on to the customs union. >> we want to do that, but he did not happen. it was our plan, and we repeatedly said that first the wto accession and in the customs

union. but it is not easy to explain people who observe this, saying that you have another -- you have neither the wto or the customs union. whe>> do you think if your first attack -- strategy might still prevail? >> we need to start with a customs union from january 1 and talk to our american partners about the wto accession and understand the framework and time possible to do this. and when i talk here in washington, d.c., we will get a clearer picture. but at the moment, we understand that when i speak with my experts, they say that in order to find proper solution for all the issues, we need a few months more.

>> we appreciate your very candid and detailed response on that. let me shift to another topic. in your initial remarks, which i found fascinating, you talked about the need for the g-820 and the g to coordinate responses -- and the g-8 to coordinate responses in leading the world economy. could you talk a little more about how you see the g-20 and the g-8 involving to help lead the global economic development? how would they help russia in your efforts to reform your own economy in the way that you discussed? what would rush to be seeking from the g-20 and a g-8? what you expect might emerge from the pittsburgh meeting later this week? talk about the coordination

process and how you think the internet that process, and what can rush to bring to it? >> let me start from the g-8. russia became a member of the club a few years ago but when the ministers of finance and the heads of the central banks meet, there is the g-7 format. and when they said -- and they said that when russia -- the same level of economy, we would get the same attention. we will expand and we will be the g-8. along with that, in all the recent years, people are talking about the energy security, the responsibilities there, and energy charter, and all these issues, climate change and so on. i can tell you because i was

there before my colleague to cover. we talked in the g-8 format over critical issues, energy security and climate change. and there were the same questions. at the new talk about global energy security without russia? it is ridiculous. and there was always an explanation why we should wait, what we should do with the russian economy, and so on. we said, ok, maybe it is not the same level of an economy as the american economy or the same as the european economy, but it is bigger than many of the country's which are members of the g-8, like canada, italy -- the russian economy is bigger. if we talk about the figures, it

is bigger. and in terms of energy security, the russians can bring a lot to the global development. then we said, ok, it's something wrong with in this format. all they talk about that g-7, talking about the only financial global issues, and then at the same time we invite five more states every year, the outreach format -- china, india, brazil, and mexico, and this year even more. it means that the g-8 cannot cope with all these problems. our canadian colleagues, they repeated it -- 50-20 is the

future -- that he g-20 is the future. we need to shifted from the g-8 to the g-20. we believe the debt with them both -- we believe that within both, russia can bring a lot to the global economy, given its resources, well-educated population -- because we have a very well-educated people. if you travel a lot and compare the levels of education in my country in context, we still have all the problems but we have very educated people, which can along with national resources that we have in our country, with his intellectual

power, we can create something new and give this to the global economy. to the whole civilization. but we also feel that many technologies do not allow us to convert our -- the lack of technology to not allow us to convert our economy. i have said all of this. within the g-20 and the g-8 and any others, we can bring a lot to the table of a global civilization and also understand that our future, the future which will create a new russia, will the victim and and on mutual cooperation. >> let me open up for questions on this side. and he has won first and then we will come right here.

>> i will not follow on a question of energy security. -- i want to follow up on a question of energy security. the energy charter treaty, what is the response to that proposal and what are the specific ideas were goals that the russian government would like to achieve with this proposal? >> maybe you know, or maybe not, but one of the papers for the g-8 summit in st. petersburg, we accepted all the countries so that real energy security could be based on three major issues. .

>> they say that security of demand is not the appropriate way to discuss. we need to talk about security of supply. russian, which produce a lot of oil and at the same time, we consume a lot of oil, so we understand both, consumption and production. later, we were faced with real difficulties on how to transit oil and gas. we think that real security could be covered only by the

international treaty which includes special rules for all of these three spheres. without security of transit, there is no energy security. when the president said that we need to create new international legislation, we need to discuss this. many positions from european countries and others were not very positive. they spoke of security on supply and they did not want to change the charter. we strongly believe that the energy charter should be amended. or we need to create new international law. but we need to understand that all the major actors and

players are involved in producing for giving us a feeling of energy security. without the security of transit, there is no way to forget about these possibilities. . >> the key. my question is about some of the problems that have been listed. diversification and modification. many of these are old languages. some of these are from past campaigns. it seems that a major part of the solution is convincing people that you're serious. the level of corruption is concerned and. the level of bureaucrats has increased. what is new arrested corporations. the president has taken up this issue. can you explain what the goal is of this campaign against them?

who is the enemy? is it state ownership? is that the problem? the president instituted russian policies and said that these were legitimate discussion topics. many americans believe that the political system and with other functions is connected with that economic system. or both of these subjects for discussion between our two governments? @@@@@ @ @ @ @ @ @ @ @ @ @ @ @ @

the american people. there is no doubt about this. if your administration, along with that, here's our forces, what ever you create could be damaging and could be very dangerous for our relationship. in reality, it will not create a student -- protect united states and russia. it will create a subject of mistrust and maybe if those forces were heard, in this decision was taken, along with -- taking your security interest, i welcome that. we heard many positive voices from american administrations where president barack obama was elected and as i understand it, from my president and my prime minister, when we will pursue

this. we will respond and we are ready. we are ready to change these suggestions. we understand that that is the responsibility for both parties. i can tell you that in my country, when it was announced about missile defense problems, it was announced three different mass media. common people were glad to hear this. maybe people do not just mention this. in my country, it was mentioned. people may be became more secure. they feel that both presidents can talk. they can hear and they can achieve. i was present when president putin talk about the missile

defense problem. very interesting. president putin did very carefully. there were lots of details on how to protect both countries from possible danger and he just proved that all possible measures taken by americans would have nothing to do with international interests. president bush said that he could see the level of disappointment. maybe something happens. i did not get that strong signal from my assistance and from people who are around me my president said he is not just thinking about russia, he is

thinking about the whole world. that level of mistrust will be felt globally. we need to send stronger signals in order to provide this. i can say that we understand that this position is based in order to secure american people. we hope it is because our position was heard and now it is realistic that the global problem could be done while including russian possibilities. without russia, it is impossible. with our territory, it is impossible to provide global, secure systems.

you talk about our enemies. we do not have enemies. we all understand that corruption is bad. the judicial system is not perfect. we have any other difficulties. the problem is, from year to year, we do not observe changes. i believe that every year we observe positive changes in my country. the corruption is changing. it is huge. but it is trying to find a new model of existence the president says that we will do with this. corruption has been for ages and my country they've become known

for people. . state corporations were made to try to take that from control. tran this does not work. then we set up a few state-owned enterprises. one is to provide money. another one is state enterprise. . they're very different. not all of the enterprises do

this. we need to pursue further privatisation current this is still state owned. this level of economic development we can provide a completely new way. it would be thoroughly prepared without any critics. but we need to carry on. tran if you say that the government thinks that maybe it is modernized language, you need to repeat it 800 times in order to change this. with this task of modernization, this is true.

people need to hear every day that we need to behave differently. modernization is not just something that is prepared by the government and finance to the government. it does not work like this. this means that when you drive your own vehicle, you use a safety belt. then you do not smoke a lot because you think about people who are protected by the same insurance system and you do not drink a lot because you are responsible and you have kids. why? we think about real modernization when we think about changing habits and the economy. then it will be a real success. it will be modernize russia.

you know about these. it was announced by president of the deaf -- president of that if -- the president. you look at medicine. that is where is he can concentrate. that is not the modernization of the country. in this particular aspect, i think it is both language and it is different. we speak about modernization, but we mean that it is going to be different for the whole population. his recent article was completely above this. we asked all the people and provided their understanding of

public and modernize the country. that is new for russia. maybe you will see another way that we should pursue this. it is different. i cannot say and agreed that it is both. >> ok, one more. >> mr. deputy prime minister, rich herald with ge general electric. it is very exciting to hear your plans for moving towards then knowledge based economy actually, g e is involved in many high tech areas like boeing and the other companies. i want to ask you this. it will take quite some time to reach the knowledge based economy in the traditional economy will have to wait for a long time to come.

in order for the current economic base to provide a brighter future, russia needs a lot of investment to upgrade infrastructure throughout the country. it just so happens that when i'm working on as trying to help russia upgrade the railroads with new locomotives and modern systems. you mentioned that the budget for 2010 is already seeing support for the knowledge based economy. can you tell us what plans there are four budget financing and also other means of financing in the next year for things like the needed upgrades to russia's infrastructure? >> the level of finance for russian railroads would not be less than the level of 2009.

that is not easy because we have different needs three. we will keep the same amount of budgetary funds as it was for the year 2009. russian railroads would be able to place bonds with state-owned banks. they would also buy new locomotives and this is very important for the country. we understand that it is spending more money, now. the beginning of the year was very bad for the company. now level of business is up to 60%. they will collect money from that market for their services.

it is a direct budget. >> we are almost at our closing hour. i wanted to ask one more question. you helped clarify the role of the ruble in the international monetary system more broadly. does that play a role in what you have for a more stable

financial. >> they need to be changed. they could play more. it doesn't mean that we do not want previous major players. in the institution will deal with economic development. at the same time, we understand that the imf will bank organizations which will be shifted to another system. these institutions would ask if

we have precise plans. we have our proposals and discuss these. when the leaders met in london,, it is connected. countries are split. the communicated that. it is not the frustrating anymore. we need the dollar. but we cannot depend completely.

before we create this, we need to understand that the country that provides these currencies behaves more accurately we had huge reserves. and we talk about the appreciation of the dollar, it could be we think that there is no absolute rule.

we could try to find rules. for the moment, we do not observe this. the major economy is suffering. we need to complement each other. >> we thank you very much. [applause] once again, we think the ambassador for hosting us in this elegant facility. our colleagues as well. we think you for coming. this is a very important session we wish you success in your meetings in washington today. thank you very much. >> thank you and thank you for

the book. >>

we're going to examine the results of 20 years. certainly that is a reason for a particular fondness for the fall

of the berlin wall. my wife was watching on television and went into labor and by 20-year-old daughter decided that it was safe to come out. the cato institute has always had a very strong interest in promoting freedom. that meant that since we were founded in 1977, dealing with communism, we published a book in polish called solidarity with freedom we had people from poland, to less than we smuggled 5000 copies into the country.

it would not let anyone have more than 100 in fear that it would find some way to give them if they could. we smuggled back into the soviet union. we have been active in this for a long time to read we have the very first conference devoted to free markets in the history of communist china. that was held in 1988. it was a remarkable event. he and rose were there celebrating their 50th wedding anniversary. milton was treated like a hero. i could not believe it. here is this communist country and the people were so excited

and to meet them the met in august and my take on her was that she was none too happy to be on the service without him anyway. that was a horrible loss for all this. then, in 1990, we have the first conference devoted to freedom. we had charles murray, a nobel laureate, and all these true liberals there were arguing against status of and it was instructive because in that conference, we had good relations with the mayor of moscow.

he was friendly to us and so we were able to lunchmeats sent to the conference. this is in 1990. i promise you, if you have been there and seen and smelled the food, you would not have eaten it. yet in this communist country, because we laid the food out at 11:00, word got out into the conference that there was food outside of the conference into it. they devour the food. the next year, we had another conference in moscow.

again, it was devoted to freedom. the thing that was interesting was that we brought with us buttons that have the logo on it. above and below the logo were the words in russian, " capitalism and private property." they were the most popular thing in the hotel. all the waiters have them on a trip all the people behind the front desk at them on. this was an indication that communism was about to collapse. i went to the soviet union for

the first time in 1981. as a libertarian, as someone who i think understands economics, i assumed there would be a lack of material goods. as late as the mid '80s, the cia was suggesting that the soviets had 63% of our gdp. there was no gdp in the '80s in the soviet union. but the thing that really struck me was not the lack of material goods that i had anticipated, but what it does to the human spirit. the people were just destroyed. their eyes diverted do when you walk down the street. there were rude when you have to deal with them in any kind of transaction people do not realize that people simply did

not know how devastating communism was to humanity. we are glad that that is behind us now. one hopes, anyway. this conference will take stock of the political and economic reforms over the last 20 years in eastern europe. we will talk about what went right in what went wrong and why. we have some marvelous speakers. if this is something marilyn did. she put the conference together.

we tend to underestimate the success of the collapse of communism and what it has meant to people. has not been perfect. but this is ideologies that killed hundreds of millions of people and suddenly you have freedom of religion and freedom of expression and freedom to travel, things that did not exist before. it is very important that we acknowledge the success of this revolution. one of the people most responsible for this success is our speaker. he is president of the czech republic. he has been a longtime friend of the cato institute.

he is somebody who understands economics very well. he understands freedom. he is the kind of person you wish we had politicians who cared about political policy. the czech republic has been very fortunate to have this giant, in a national figure. prior to being president, he was prime minister. he established the policy is that led to the things we have today. he is somebody who has major

positions in the government. he is associated with my friend at the competitive enterprise institute. he is somebody who has had the courage to stand up to the scientific nonsense of the global warming alarmists. it has been 10 years since there has been any warming and what ever won in there is, we do not know what causes it. it takes courage to do that. this is a man who has courage on so many different issues. we published a book some years ago