Even in Astana, Vladimir Putin stands by the Russian banking system.
The Russian Prime Minister attended a meeting of the heads of government of the Shanghai Cooperation Organisation yesterday. Our special correspondent ANDREI KOLESNIKOV could see for himself that, throughout the day, Vladimir Putin was more concerned with what was happening in Russia in connection with the world financial crisis. A package of extra measures to assist the national industry was due to be published today, and our special correspondent tried to find out why it did not happen.
The meeting of the Shanghai Cooperation Organisation (SCO) Prime Ministers began on time. Vladimir Putin was the last to arrive. He proceeded to the second floor of the Kazakhstan Independence Palace with a double-headed eagle at the entrance that would, at first glance, hold its own against any of the Third Reich's iron eagles. The palace was opened parallel with the start of the meeting. A closer inspection and explanations revealed that the eagle was actually the bird Samruk, who laid an egg on the Baiterek Pyramid in Astana, which instantly became Kazakhstan's national shrine. Because the egg appeared in Baiterek much earlier than the bird Samruk, one can safely claim that Kazakhstan's President Nursultan Nazarbayev has managed to clinch the eternal argument as to which came first, the egg or the bird Samruk.
Vladimir Putin took a lift to the second floor, although he could have used the stairway like two or three of the more ambitious SCO Prime Ministers, excluding, of course, Chinese Premier Wen Jiabao. Vladimir Putin, like the Chinese Premier, has long chosen not to exert extra effort.
While the leaders conferred with each other, other participants in the negotiations were discussing their problems amongst themselves. Thus, the Kazakh Economic Minister Sauait Minbayev, a man of few words who hardly ever talks with journalists, putting a safe distance between himself and the roundtable where the participants were seated, told me that before Vladimir Putin's arrival in Astana, he and his Russian counterparts had agreed to raise the price on transit of Kazakhstan oil through Russian territory to $35 per metric ton, that is, by almost three times.
Russia had long been pressing for it, but other members of the Caspian Pipeline Consortium (CPC), which includes Oman and several transnational oil companies in addition to Russia and Kazakhstan, were against it. Now that it has been agreed to expand the CPC to 67 million metric tons a year, the price of oil pumping will at last be increased.
Kazakhstan's Economics Minister said, after some hesitation, that there is an agreement as to who will buy Oman's share in the CPC (the 7% stake will be divided equally between Russia and Kazakhstan). BP has also come up with a proposal to sell its share in the CPC, but the price is still too high, the Kazakh Economics Minister confessed.
During the course of the Prime Ministers' meeting, each of them sounded off on the issue of the financial crisis. The first to do so was the Chinese Premier, who could not resist the temptation of stressing that the crisis had flared up in the US and that China "has taken a series of measures aimed at promoting confidence between the market and investors." He also added solemnly that "China is a responsible country... the financial crisis, which has spread throughout the almost the entire world, is one more proof of the inevitability of the reform of the international monetary system: tighter control to prevent financial risks."
The Chinese Premier ended his speech by promising all the SCO countries and even observers easy-term loans to overcome the financial crisis, apparently suggesting that China had no traces of the crisis left.
Vladimir Putin also focused on the world financial crisis, and, as on every occasion, the Russian Prime Minister said that we will now live in a different world and will be "witnesses of and participants in a new financial and political architecture."
"Values and development models are becoming subjects of competition," Mr Putin said. "New centres of economic and political influence are emerging."
Mr Putin thus once again indicated that there are countries that would derive huge benefits from the crisis and are already doing so.
"To solve the existing problems, Russia proposes to change the global financial system," he continued.
At this point something unpredictable, almost irreparable, and probably inevitable happened. One of the participants, the head of the Iranian delegation seated at the table, heard this and pushed his chair abruptly away from the table, causing the chair on wheels to make a semicircle on the new marble floor and tip over, together with its proud occupant.
An inquiry held on the spot revealed that the man who had taken Mr Putin's words so closely to heart was none other than the First Vice President of the Islamic Republic of Iran, Mr Parviz Davoudi, who was attending the SCO meeting as an observer. Apparently he hadn't heard many of Putin's speeches before.
"In the name of Allah," exclaimed Mr Davoudi, after restoring his balance with the help of several security men, his own and others'. "I would like to speak about Iran's potential in implementing the lofty goals of the SCO: the use of Iranian energy (oil, gas) by SCO member countries and the use of the rich cultural and historical traditions, in spite of the intervention of transnational forces, which have caused the growth of extremism..."
Mr Davoudi called on his colleagues, before it is too late, "to create an independent common financial system for the economic development and social well-being of the peoples in the region," thereby effectively backing Mr Putin, who probably could have done without such support.
"Assalamu alaikum wa rahmatullahi," Parviz Davoudi concluded.
After the SCO meeting was over and Vladimir Putin had held several bilateral talks, he approached journalists and again spoke about the financial crisis. I asked him whether he believed that the measures taken were sufficient to minimise the consequences of the crisis for Russia and whether some other surprises were in store for us. I also asked a follow-up question: "President Dmitry Medvedev said recently that he kept his savings in roubles, mainly in Sberbank."
"You all seem to be keen on counting money in other people's pockets," Vladimir Putin interrupted.
"We have long counted the money in our own pockets. Anyway, in what currency do you keep your savings and are you going to convert them any time soon? Perhaps you know something that we don't know," I responded.
"To begin with the last question," the Prime Minister said, which I think was the right thing for him to do, "I have always had my savings at Sberbank and VTB, and they remain there. I see no need to do anything with that money."
The words that followed were pronounced as an incantation. It worked:
"Our banking system is functioning smoothly, thank God, as we have said many times. The Central Bank is issuing the largest amount of liquidity. The questions should be addressed to the banks, as they are mainly questions of trust in the interbank loans market. It has nothing to do with individuals, it has to do with interaction between banks."
He frowned as if trying to recall the whole question:
"The first part of your question was about what should be done for Russia to be able to overcome all this calmly... The first thing to do in the banking sector is to push through the financial clot so that the money can reach the national industry."
In response to my mute question, Vladimir Putin said, "Such measures have been planned, but this doesn't mean that the measures we are taking go the whole way. I just had a call from a Deputy Prime Minister who asked me to call him back. I know what they are doing at this moment."
It was clear to me that throughout the day, Vladimir Putin had no interest in the SCO. He was far more concerned about the Deputy Prime Minister's telephone call.
The Prime Minister continued, "We were to announce an additional package of measures concerning the national industry (apparently the SCO got in the way, since he had to attend - A.K.). We shall see... We worked on it yesterday. I arrived here (in Astana - A.K.) at 4 am because I left Moscow very late. We will continue this work tomorrow... I am sure we will come up with a package of measures, on the understanding that the measures will be implemented as the need arises."
In other words, the additional measures would not be published the following day, as Vladimir Putin had seemed to suggest earlier.
"So, there will be no holidays?" I asked, referring to the fact that a three-day holiday lay ahead, and as the country's population remembered only too well.
"The holiday has long ceased to exist," the Prime Minister replied.
"Still, do you keep your money in roubles or in hard currency?" an Izvestia correspondent repeated the question.
"I converted some money when I went on trips... Long before this... But it's in roubles mainly," the Prime Minister said.
"Have you counted your losses?" I asked.
"You know, I had no time to count."
"Do you have that much money?" I asked.
"No," the Prime Minister said. "No... What losses can there be? On the contrary... And anyway, I think that to withdraw money from some place and transfer it ... it's more trouble and more expense."
So, Prime Minister Vladimir Putin prefers to make money out of the financial crisis.
