March 23, 2000
Web posted at: 2:00 p.m. EDT

(CNN) – Sergei Vladilenovich Kiriyenko was prime minister of the Russian Federation from April 1998 to August 1998. He held several leadership posts in the finance and energy sectors during the early days of Russian reform. When former President Yeltsin dissolved the government of Prime Minister Viktor Chernomyrdin in March 1998, Kiriyenko -- hailed as a pragmatist and technocrat -- gained Yeltsin's support to become the next Russian prime minister. Kiriyenko served as a committed reformer, dedicated to the cause of revitalizing the Russian economy and efforts at Russian reform. He is currently the leader of the Union of Right Forces in Russia.

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The Russian people go to the polls on Sunday, March 26, to elect a new president. Vladimir Putin, who became acting president when Boris Yeltsin resigned on December 31, 1999, faces 11 other candidates in the election. As of March 22, two polls showed Putin getting more than 50 percent of the vote. Putin’s nearest rival, Communist leader Gennady Zyuganov, had the support of 20 to 25 percent of those polled.

Mr. Kiriyenko and a translator joined the Russia Chat via telephone from Washington, D.C. CNN.com provided a typist for Kiriyenko. The following is an edited transcript of the chat.

Chat Moderator: Thank you for joining us today, Sergei Kiriyenko, and welcome.

Kiriyenko: Thank you. It is a pleasure to be here.

Chat Moderator: It appears Vladimir Putin will win the upcoming presidential elections. Do you think Russia will undergo any major changes under an elected Putin government?

Kiriyenko: The answer is both yes and no. What we should expect is a change of era, not just a change in the name of the president. The era of revolutionary reforms led by Boris Yeltsin is over. Putin's job is not to conduct a new revolution, but rather systematize or institutionalize the results of Yeltsin's democratic changes.

Question from TiTaN: Why can't the CIS create their own "OPEC" and influence the crude oil prices? It seems that the Russian oil barons could generate some really needed hard currency, offset world oil prices and be the "hero," all at the same time.

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Kiriyenko: In fact, the prices of crude in the world are very favorable for Russia as they are now. I have a feeling that the way the businessmen's minds work is that they can strike a deal when they are not doing very well. When they are doing okay, there does not seem to be an incentive for them to negotiate.

Chat Moderator: Regarding Chechnya -- Putin has declared victory there, but the rebels continue to fight. What do you think will happen to Putin's popularity if there are any further setbacks there for the Russian military?

Kiriyenko: It seems to me that the military campaign in Chechnya is largely over. It does not mean that the problems have been solved. The Chechnya problems cannot be solved militarily. If the Russian government is to enjoy the trust of the population, and if it is to sustain its popularity, it will have to normalize the economy and to solve the Chechnyan problems economically.

One thing we know for sure is that it won't be easy and it won't be quick. We have to get used to the idea that the Chechnya settlement will take decades, not years -- just like the situation in Ulster and many other hotbeds in the worlds have taken years where there was blood spilled in ethnic conflicts.

Chat Moderator: Russia's economy is in a major state of crisis now. How can those economic troubles be reversed? Are there any "quick fixes"?

Kiriyenko: There are no miracles in the economy but there are ways of solving the economic problems. There is real economic growth in Russia which is being fueled by high prices of crude and the devalued national currency, the ruble.

For the economic growth to be sustainable, we need to have four factors. One is political stability, and we will have political stability after the presidential elections. Two, the government -- the state -- has to perform its core functions such as provide a judiciary, a police function and anti-monopoly function. This is going to take a reform of the public administration system and that is going to be Putin's biggest and most complex challenge.

Three, Russia needs ostensible guarantees of protection of private property. Because Russia does not have a cultural tradition of protecting private property, it will have to have abundant legislation giving such protection -- in fact, over-abundant legislation. And the rest is tax reform.

If the above four factors are present, they will create an environment which will attract investments in Russia that are necessary if the Russian economic growth is to be sustainable and long-term.

Question from alley: What will the war in Chechnya mean for other semi-autonomous regions in Russia?

Kiriyenko: It won't mean anything, in my opinion. We should remember that the war in Chechnya did not start after Chechnya declared its independence. It was a process that took a few years and a lot of negotiations. The war in Chechnya started after it invaded Dagestan, which is part of the Russian Federation proper.

Let us try to imagine for a moment how the United States would react if somebody like Bin Laden invaded Texas and declared it a sovereign republic.

Question from Bilbo: As the former prime minister of Russia, what improvements would you suggest to streamline the election process?

Kiriyenko: I would not change either the presidential elections or the Duma, the parliament, elections in Russia. But I would change the election procedure to Russia's equivalent of the U.S. Senate, the upper chamber. Today, elected governors of Russia's regions automatically qualify for Russia's senate. That, I think, is a dangerous combination of legislative and executive powers.

I think it would be the right thing to have the Russians directly vote and elect their senators. However, the problem of the Russian election system is not that of legislation but that of the still-missing tradition of democratic elections in Russian society, which has to be established so that each individual voter fully realizes his or her responsibility for his choices at the ballots.

Question from Candyce: How does Putin approach the problem of corruption and "gangsterism" that pervades Russia?

Kiriyenko: Corruption, of course, is not a Russian invention. Many nations of the world have had this ailment at some period in their history and the prescriptions for treatment are identical. Of course, the government has to step up its law enforcement activities. But, the main thing to do is to deprive the bureaucrats of their ability to negotiate with the public in exchange for performing their office duties. For this, the role of the bureaucrat and of the government in the economy has to be diminished. And the decision-making procedure -- the bureaucratic decision-making procedure -- has to be streamlined and simplified so that these rules will be transparent and understandable by everyone and so that bureaucrats will not be free to interpret them as they like. And so they will not have discretionary powers.

Question from alley: How will the union with Belarus affect both countries?

Kiriyenko: You may know that my party opposed the union in its current format. I think the union as it is now is some kind of a political superstructure. There is just one way, I believe, of uniting the two countries’ economies in a real way -- given the difference in scale of the two countries' economies, given the difference in development rates of the two countries. The only thing that can be done is for the Belarus economy to join the Russian economy.

As it is done, the regions comprising Belarus could then be granted a special autonomous status that would be different from that available to constituent entities of the Russian Federation, but still a special status with a degree of autonomy. Unless that happens, the union will remain a purely political entity, not an economic one.

On top of that, I do not believe that the Belarus system of government is a democratic system. It is an authoritarian regime but then, of course, it is up to the Belarus people to make that choice.

Question from Walter: Would the federal government best be able to bring prosperity by strengthening its own control over processes like taxation, or by encouraging more independence and innovation from the many regions and autonomous republics?

Kiriyenko: I think that both things have to be done. Definitely, there is the need to decrease the tax rates and the government expenditures share also has to go down. At the same time, economic subjects or economic entities need to have independence and that independence needs to be encouraged.

Rather than regions within the Russian Federation, I would encourage private enterprise and entrepreneurs to be treated as economic entities. The regions should have a sufficient degree of independence, but one that would stay within the current separation of powers of the Russian Federation. We cannot afford to have economic separatism. Compliance with Russian national laws has to be guaranteed across the Russian Federation.

Chat Moderator: What do you think Russia will be like five years from now, especially in terms of its economy and its relations with other nations?

Kiriyenko: Today is a turning point for the Russian economy. If the necessary changes are not delayed and if the new president were to get right on them, we can have four or five percent growth in the Russian economy on an annual basis. This, in turn, will enable us to implement the necessary structural reforms of the social protection system and to answer what seems to be the main question of the day in the context of globalization of the world economy. (That is), will Russia be able to claim a worthy place in the global division of labor or will it slide down to become a third-rate commodities country?

I believe in Russia as a great power but my measure of a great power is not that of military might, but that of the well-being available to the people and the standard of living in a country.

Chat Moderator: Do you have any final thoughts to share with us?

Kiriyenko: I appreciate the opportunity to have this dialogue and I thank everyone who has been part of it. It seems to me at this point that Russia is moving along from its post-Soviet history to becoming aware of itself as a normal, regular nation-state. Not a nation-state in the ethnic sense, but rather a nation that is aware of its own statehood. We understand universal human values and we believe it is important for us to adhere to them.

In Russia, we collectively refer to them as Western values. They are things such as freedom of speech, freedom of the individual, freedom of worship, the market economy and democracy. But, on the basis of these universal, global values, Russia has its own national interests that rest on these same values. Any development, any progress, any international cooperation is possible only if it rests on the principle of mutual beneficiality.

Respect and understanding must be shown regarding each participant's national interests. In the context of globalization, we have all become highly dependent on one another. The main challenge of the 21st century is no longer the military confrontation between East and West. The main challenge is the inequality of development -- inequality of access -- enjoyed by the younger generation in different parts of the world to resources such as health and education. And this is not a challenge that can be tackled within anyone's national boundaries; this is a challenge that will require collaborative effort. We simply have to deal with this challenge and other related issues jointly.

Thank you and I wish you every success.

Chat Moderator: Thank you for joining us today.

Kiriyenko: You are welcome.