Moderator: Good day, colleagues, I am happy to welcome you at the Press Development Institute. Our guest today is Alexander Pikayev, member of the Learned Council of the Carnegie Moscow Center. He will speak on the subject of the George Bush administration, the ABM Treaty and NATO expansion.

Pikayev: Good day, colleagues. First of all, as always, I would want to express my gratitude to the Press Development Institute for the possibility to address you here. True, Monday morning is not the best of times. I would like to dwell on three moments that now give rise to the biggest number of questions by journalists -- the Bush administration, the ABM Treaty and NATO expansion.

The development of relations between Russia and the United States in the next four or even eight years will largely depend on the solution of these questions or their development.

Let us begin with the Bush administration. We know that although Bush did win the presidential elections he got fewer votes than Albert Gore. But because of the specificity of the American election system and after a lengthy debate Bush was eventually declared victor. The Republicans have also reduced their representation in the House of Representatives. In the Senate there are 50 Republicans and 50 Democrats. In the event of a tie the Chairman of the Senate, the Republican Vice President Cheney will cast the decisive vote.

For this reason the Bush administration has rather weak positions at home. The victory is a challengeable one. Many Democrats say that Bush stole victory from Gore. This will create very big difficulties for the Bush administration in domestic politics. Just as the Republicans did during the past six years the Democrats in the next two years, till the next elections to Congress late in 2002, will definitely make life difficult for Bush, will obstruct many of his endeavors. They command rather good positions because the Senate committees are shared between Republicans and Democrats and it will be very difficult for Bush to get his decisions supported by Senate.

The Bush administration has come to power at a time when the huge growth on the American stock exchange, the huge growth of the Doe Jones index, the index of high-tech companies has come to an end. These indices had a clear trend to decline already last year. Although Doe Jones index managed on the whole to remain high, the index of high-tech companies had dropped. This is already exerting the most negative impact on the welfare of Americans, many of whom have invested in this stock, many of whom have grown accustomed to huge returns on investments in stock. Now an end is coming to this. There are many forecasts in America of a market collapse.

If this is going to happen Bush will find it very hard to get re-elected in 2004. If this happens the Republicans may lose power in 2004 for many years to come. We have the example of President Hoover. He was defeated by Roosevelt and for twenty years the Republicans could not come back to power.

Huge changes are taking place in the United States. The traditional coalition that votes for the Democrats is growing. This is happening for reason of long-term demographic changes. Immigration is high. The birth rates among immigrants are higher. These minorities will turn into a majority in the future. In California this is going to happen already after 2010. This coalition votes for Democrats and the long-term demographic changes are against the Republicans. For this reason they must change their stand, they must do everything to expand their popularity among the minorities. Only five percent of the Afro-Americans voted for Bush. This is very little, of course.

For this reason the Bush administration will be under strong domestic pressure. Both short-term and long-term. This will exercise a substantial influence on its policy. I expect the new administration to be even less interested in foreign policy than the Clinton administration.

And Russia is one of the main examples of this. America is really tired of Russia. In the course of ten years, they believe, a lot of money was invested in Russia, Russia got about 50 billion dollars in loans from international financial organizations and despite all these injections but reforms in Russia have made very little headway, are not irreversible. More than that, Russian-American relations were deteriorating during these ten years and are now in a very delicate state. Luckily, they have not yet crossed the line beyond which lies confrontation.

As I said, America is weary of Russia. For this reason the Bush administration will show less interest in Russia. It will try to distance itself from Russia. On the other hand, strong positions are held in the Bush administration by people who held important posts in the administrations of Reagan and Ford. For many of them Russia is a traditional adversary of the times of the Cold War. They also regard Russia as a lame duck, as a failure, as a country that has failed to remain in the mainstream of history at the end of the century. For this reason they believe that Russia is a country that should not be reckoned with, a country whose interests can be ignored. More than that, many of them by force of inertia believe that what is bad for Russia is good for the United States and vice versa.

On the one hand, as I said, there will be an attempt to distance themselves from Russia and other newly independent states. But this may have its merits. On the other hand, there will be a bulldozer policy. The Bush administration will be capable of putting very strong and outright pressure on Russia on a number of issues. The Clinton administration usually tried to avoid using such methods.

We may see a shift of accents in the Bush administration's policy in the post-Soviet space. Ukraine is unlikely for Bush to play the role of a litmus paper of the presence or absence of imperialism in Russia's policy. Everything I said about Russia applies even more to Ukraine. There is a lot of weariness and, unlike Russia, it has fewer trump cards to influence the policy of the United States.

So, Washington is likely to take even less interest in Ukraine, and it has already been taking less interest over the past two or three years, and the Bush administration, mindful of the powerful oil interests on this administration, will shift its interest to the Caucasus, so that Georgia, Azerbaijan and the Caspian basin may come to perform a more important role for Bush than Ukraine played for Clinton. But there too policy may become less ideological and it will make it possible to develop common approaches to untying the knot of problems around the Caspian.

So, Bush will hardly be able to come up with a coherent policy with regard to Russia. Most probably the Bush administration will look with more indifference on what is happening here but it may from time to time and totally unexpected for the Kremlin provoke crises which may greatly cloud the Russian-American relations.

Bush will probably have serious problems making foreign policy decisions. Four persons are responsible for foreign policy: they are vice president Cheney, Condoleezza Rice, the President's national security adviser, Secretary of State Colin Powell and Defense Minister Donald Rumsfeld. They are four experienced and strong leaders, but their positions on key issues often differ and are even opposite. For instance, Rumsfeld opposes the ratification of the nuclear test ban treaty, whereas Colin Powell some time ago spoke in favor of ratification. Of course, these people will have different attitudes to Russia and to Russian-American relations and they will react differently to Russia's actions in various fields which will not make it easier to work out a single US policy with regard to Russia.

This will impact on two key issues in Russian-American relations at present, the expansion of NATO and the ABM Treaty and the entire range of bilateral relations in the field of limitation and non-proliferation of weapons of mass destruction.

As for NATO, in 2002 a decision is to be made on the second wave of enlargement of that organization at the summit of 19 NATO countries which will be held in Prague. At present there are three candidates that may be invited to join NATO. Provided Russia pursues a reasonable policy towards the West and the United States and the European Union that wave will not be so large. There may be at most three states and perhaps even two or one.

The first candidate is Slovakia, a country which was not admitted for technical reasons as part of the first wave. It provides the land link between the Czech Republic and Hungary. At present Hungary is an island that does not have a ground link with the rest of NATO. This created some problems during the Kosovo campaign when Hungary played an important role in the delivery of air strikes against Yugoslavia.

The second candidate is Slovenia, also a country for which there was a powerful lobby during the first wave, but which for various reasons could not join that organization. But Slovenia no longer shows the same eagerness as the Baltic countries. Slovenia is among the front runners to join the European Union and interest in joining NATO is waning there because membership of NATO imposes certain obligations in the military field which is why not all the leaders in Slovenia are ready for joining NATO.

And finally, the third and most important candidate, as far as the relations between Russia and NATO are concerned, and that is Lithuania. Most probably all the three Baltic states will not be invited, there is talk about inviting one or two, but most realistically one can speak only about Lithuania because Estonia and Latvia are much closer to vital Russian centers and their relations with Russia are the most problematical.

Of all the three Baltic countries Russia has the best relations with Lithuania. But there is a serious problem with Kaliningrad which is separated from Russia by Lithuanian territory. Lithuania's accession to NATO will create great problems for the safety of that Russian exclave. There are deep differences regarding Lithuanian membership both inside the United States and among its main allies in Europe. The Germans and the French, and to some extent the British, wouldn't like the Baltic states to be included in the second wave because that would create problems for the expansion of the European Union and the they also fear the emergence of a seat of tension around Kaliningrad in the immediate proximity of the border of the European Union and Germany.

There is no unity in America either, but much of the Democratic Party and some Republicans would like to see Lithuania as a member of NATO either from a sense of historical guilt or proceeding from their vision of the relations with Russia. Russia protests against the entry of the Baltic states to NATO, so they should be admitted by all means to demonstrate that we are strong, that we are not soft and to show that Russia has no right of veto on the decisions of the North Atlantic Alliance.

If the Bush administration, however, follows a pragmatic policy and there are many pragmatic politicians there, it would do well to ask itself how will the security of the United States be strengthened as a result of admission of Lithuania? What is in it for the United States? At the same time, if the relations between Russia and the West worsen, Russia will have to draw still closer to China and this will hardly be a positive factor for the United States.

Besides, the Americans say that Russia should not have the right of veto. But one can counter this with another argument, namely, whether the interests of the United States will be well-served if decisions on key issues of American foreign policy are taken not in Washington, but in Vilnius or Warsaw and these decisions may have a negative impact on vital US interests in various regions of Eurasia.

The third issue is the problem of limitation and non-proliferation of mass destruction weapons. And this brings us into a very controversial phase. The American administration takes a rather critical view of the process that has been going on, grueling and prolonged negotiations to sign START-1 and START-2 and there were consultations on START-3. They believe that this is a very lengthy process, that it is extremely difficult to reach an accord. And the accords that are reached have little chance to be quickly ratified by the US Senate or the Russian Federal Assembly. I can give you a long list of crucial documents that encountered serious problems in the course of ratification both in Moscow and Washington.

That is why the Americans are suggesting to go to a very low level. They say they are prepared to go much lower than the START-1 and START-2 levels unilaterally, giving the examples of the initiatives of Bush Sr and Gorbachev on the withdrawal of tactical nuclear weapons, their partial withdrawal. The maximum they are prepared to do, they say, is to conduct some talks with Russia to make these mutual obligations transparent and verifiable so that each side could have a chance to check whether obligations are being fulfilled.

But even here it is difficult to expect quick solutions. The Americans are revising their nuclear policy. The new Nuclear Posture Review is to be ready by summer. Only then will it become clear how low the Americans are prepared to go, are they prepared to go down to the level of 2,000 deployed strategic warheads as suggested by Clinton or lower than that. Only then will it be possible to resume consultations on START-3 or any other further deep cuts in the strategic nuclear arsenals of the two countries.

As to the ABM Treaty, there is still no clarity about the intentions of President Bush. On the one hand, Bush definitely depends on his election rhetorics. For many Republicans a national ABM system is something almost religious, something that is outside of rational political reasoning. And they definitely are putting strong pressure on Bush to deploy the system. The Republicans said a lot about this even long before the election campaign. The idea of deploying a national ABM system is extremely popular among American voters. This idea is generally supported by the majority in both houses of Congress. And this definitely is going to influence America's policy in respect of the ABM Treaty.

On the other hand, I do not think that the deployment of a national ABM system is something that definitely must happen during the presidency of George Bush Jr. In fact he is already the fourth American president to promise to deploy such a system. The three previous presidents failed to do this because the necessary technology is simply absent. The tests that were conducted under Clinton, critics of the program say two out of three or even three out of the three tests had ended in failure. The necessary technology is absent and it may appear this year, next year or even only five years from now.

That is why the Republican administration is also facing a certain dilemma in this respect. On the one hand, it is under very strong pressure to advance rapidly in this direction, wreck the ABM Treaty and further twist Russia's arms to make it accept some demands of the American side in this field. On the other hand, there is the absence of technology, the absence even of an understanding of what exactly ABM system the United States wants to deploy. In fact, the Republicans had criticized the architecture of this system suggested by the Clinton administration. But they did not suggest anything of their own. Therefore, they will need time to invent something that would accord with their perception of ABM.

I believe an analysis should be made of the extent to which this future system is going to contradict the ABM Treaty. For instance, is it possible to conduct anti-ballistic tests within the framework of the ABM Treaty or not? So if a rational policy is decided on, it will be in the interests of the United States in the first turn not to take any hasty action, it will be in their interests to think several times before jumping, to synchronize the process of drawing up the architecture of NMD with the completion of the Nuclear Posture Review. Only then would it be best for them to offer some concrete proposals to Russia in this field in summer or autumn.

But as to the ABM, I believe the Americans will make their choice very soon already. It is rumored in Washington that Bush will take the decision within the next month or two on the construction of an ABM radar in Shimi (sp.) in Alaska in violation of the ABM Treaty. Clinton did not take this decision last year. If Bush takes this decision in February or March... you see, because of the cold climate construction work in Alaska can be conducted only within a period of two months. Well, the foundation of this radar station can be built in the course of these two months. American lawyers say that this does not contradict the ABM Treaty. But in the year 2002, when the short summer begins in Alaska in May, if the walls of the radar station are built, that already will be a violation. So, if the decision is taken in February or March of this year, then in November of this year at the most the United States will have to notify Russia of its withdrawal from the ABM Treaty. Unless a compromise is reached by then.

So I think that America's policy as regards the ABM Treaty will become more clear by February or March.

I believe I will end here. Are there any questions?

Q: Voice of Russia. We broadcast in 32 languages. I would like you to assess the deployment of a national ABM system and NATO's expansion to the East. A delegation of the Unity Party visited the United States. They say that the Republicans are hoping to reach some positive solution. What can Russia do in this situation? At a press conference recently Putin said that we have set forth ideas of how to conduct talks on the ABM without affecting the interests of the United States and serving common interests. Could you say anything about this?

Pikayev: Thank you for your question. As I see it, the coming to power of a new administration in the United States was received positively in Russia and very big hopes are being pinned on the Bush administration that Russian-American relations, which are in an impasse now in many areas, will gain second wind and substantially improve. Throughout last year Moscow set forth a number of initiatives indicating Russia's readiness to go very far in its relations with the United States.

I would single out a number of moments here. First of all, the defreezing of relations between Russia and NATO about a year ago. Relations have developed since though not as successfully as many would have wished. A NATO information office will be opened in Moscow in February. I believe Lord Robertson, the Secretary General of that organization, will probably come to Moscow again. I think Russia should work out a series of initiatives to render its relations with NATO more tangible. First of all, I think the role of the Permanent Joint Russia-NATO Council should increase. It was set up under the 1997 Founding Act, but it has not really come into effect, it is just a forum for discussion, and these discussions either recap on what is happening at the bilateral level, at the Russian-American level and between Russia and the EU; or it discusses the latest decisions of the North Atlantic Council, something the Russian delegation can read about in the Belgian media before the meeting of the Permanent Joint Council.

I think the role of that organization should be enhanced, it should be institutionalized, at permanent office should be opened at the NATO Headquarters in Brussels with a small staff that could discuss the issues that are truly important for Russia and NATO. Perhaps, to discuss the details of the initiative put forward by President Putin in June 2000 on creating a joint ABM system, also perhaps aspects of military-technical cooperation between Russia and NATO; or some coordination of positions between Russia and Western countries on such key agreements as the Nuclear Test Ban Treaty, the convention to ban fissile materials production; and the protocol on verification of the Biological Weapons Convention. There is a certain list of issues that might be discussed within the PJC and this may ultimately greatly upgrade the relations between Russia and NATO.

Russia should follow more closely the development of a joint foreign policy of the European Union where interesting shifts are taking place. The new European defense structure is prepared to cooperate more closely with the UN Security Council, it is prepared to contribute European troops to peacekeeping missions under the UN auspices and I think that Russia might also be interested in it because it would help revive the United Nations, something Moscow talks about so persistently. Russia is already engaged in a peacekeeping mission, for example, in Sierra Leone, jointly with Ukraine and Great Britain. And I think it would make sense to conduct future peacekeeping missions in Africa, of which there are likely to be very many, under the flag of the UN, with UN money and, of course, jointly with the new European defense structure.

I think Russia should change its rhetoric in relations with the United States... All too often our high-ranking representatives, although as you rightly said, this is rooted in the past, are picking a fight with Americans over trifles and say that the Americans are to blame for everything and let us create groups and coalitions opposed to the United States... These may be reasonable things from the political point of view, but to engage in mere rhetoric -- naturally this antagonizes Washington, often provoking a morbid reaction and this is sometimes totally unjustified. But anti-American rhetoric that is heard from official and semi-official rostrums is totally unnecessary, it does not improve the climate in Russian-American relations and provokes the United States and considering the asymmetric relations between our countries, to put it mildly, all this seriously damages Russian interests.

In upholding its position, Russia should develop the ideas that it first proposed last year. The plan of cooperation in missile defense should be made more concrete. The initiative was put forward by Russia. Republicans before the elections signalled that they would be prepared to make some moves. We should also promote those areas of cooperation that existed in the past decade, namely, missile attack warning; nuclear and missile non-proliferation regimes in which Russia is at least as interested, and perhaps even more interested than the United States. Export control should at long last be put in order so as to close loopholes for illegal export of some sensitive and dual-purpose technologies to the countries which cause concern in terms of non-proliferation. I think this laundry list, if Russian diplomacy worked on it persistently, could give a positive impetus to the relations between Russia and the West, although, of course, the relations between Russia and the West is a tango that involves not two, but 19 states. So, not everything depends on Russia alone.

Q: If there are no more questions, I would like half a question. It has been suggested that to counter the expansion of NATO it is necessary to conduct negotiations on security safeguards, for example, to the three states or other states if an agreement is reached that they do not join NATO. Did you consider this scheme?

Pikayev: Russia has gone very far during the past years to persuade the Baltic states that it is not threatening them. The Russian forces were drastically cut in the regions adjacent to the Baltic states. With the exception of Kaliningrad, there is just one division in Pskov, at least according to Western data. In short, Russia has done a lot in the purely military field to demonstrate that it is not threatening the Baltic states. As for security guarantees on Russia's part, such suggestions have been made, but they have been invariably rejected. In general, the Baltic states reject everything that may prevent their membership of NATO.

I don't think it is in the interests of the Baltic states, so Russia has to engage in a dialogue on the issue not only with them, but with their partners as well, with the United States and the European states. And I think Russia will have to take certain steps to convince Berlin -- and Berlin probably plays the key role here -- and Washington and to a lesser degree also Paris and London that there is no need for NATO's expansion to that region, that this would be very counter-productive for Russia's interests and first of all for the interests of the Western countries themselves, the NATO countries.

I must say that the strategy of resisting NATO's expansion which was pursued from the middle of the 1990s, although vulnerable to criticism from many sides, has produced certain results. I mean the fact that now NATO is discussing the possibility of admitting a maximum of just one Baltic state, and even this one state is not guaranteed admission, well, this is largely a result of the objections raised by Russia. In the coming months or even weeks it will be necessary to work out a precise Russian strategy on this matter and avoid making the mistakes of the campaign that was conducted in the mid-1990s.

Q: Interfax. Alexander Alexeyevich, how serious are the reports about Germany's intent to get back Koenigsberg, the present Kaliningrad? How is the situation with Borodin going to affect Russia's relations with the Bush administration?

Pikayev: I think that the problem of Pavel Pavlovich Borodin is first of all a problem of his personal lack of experience and a problem of Russian-Swiss relations. As to the United States, many are asking the question: Wasn't Pavel Pavlovich lured to Washington? If he was, who is behind this? I think we are going to discuss this for a long time yet and it is not soon that we are going to get a clear picture of what happened. I think this is one of those secrets we are going to learn about at best only several years from now.

But from the purely formal point of view there is an agreement on mutual extradition between Switzerland and the United States. I understand there is a warrant to arrest Pavel Pavlovich or to forcibly deliver him to the Swiss prosecutor's office for questioning. I do not know the legal details of this case. In other words, there is this Swiss initiative. The United States is fulfilling its international obligations. I think Pavel Pavlovich personally made quite a big mistake by accepting that very strange invitation, judging by its Xerox copy in Moskovsky Komsomolets. I think that such a Xerox copy would not be treated by the American Embassy as serious grounds to grant a visa.

As to Koenigsberg, it is you who named it thus. This city is called Kaliningrad. Germany has given no pretext on the official level to be accused of desire to regain that territory. True, immediately after the disintegration of the Soviet Union there were some improper statements from the German side on this matter. But since 1995 official Bonn or Berlin are pursuing a very balanced and reasonable policy. And there are no grounds for charges that Germany wants to grab Koenigsberg or Kaliningrad. Of course, there are people in Germany whose parents were born in that territory and they think differently about this. They are an influential part of the German political spectrum. True, they are rather among the supporters of the CDU-CSU than the present government. I think that in America and the more so Poland these ideas of regaining Kaliningrad would cause a very painful reaction.

As to Germany, what choice does Germany have? If NATO is to expand, if Lithuania is going to be admitted... if Lithuania is invited in 2002 then the European Union, including Germany as a leading country of the European Union, are going to encounter a very serious problem of the fortress of Kaliningrad, that is when Russia may find itself compelled to strengthen its armed forces in that isolated enclave. This will be very difficult to do considering the might of NATO's military machine. And this definitely is going to create very big problems for the development of Kaliningrad region and its integration in regional economic relations.

But if at first it is the European Union which is going to enlarge, if at first Lithuania is admitted into the European Union, then there will be a fruitful dialogue on the economic development of the Kaliningrad region. It will be a sort of island inside the European Union. Then there will be more chances of Kaliningrad's peaceful incorporation in the system of the European Union's economic relations, in the system of economic relations in the European Union's Baltic region. Considering Germany's role in this European process I think that Germany's real aim... I do not think that it wants to get Koenigsberg back, I think Russia has very good chances of preserving its sovereignty over that region given that we pursue a correct policy... But I think that the best way for Germany to draw Kaliningrad region back into the system of Central European economic ties is through the expansion of the European Union and not NATO.

Q: ITAR-TASS. When the first reports appear that the Americans are going to build the radar station in Alaska our political and military leaders said that we have an asymmetric response to fall back on. As you remember, the Defense Minister spoke about the Bulava missile at a meeting of the State Duma. Then the commander of our nuclear forces Yakovlev repeatedly emphasized the tremendous capabilities of the Topol-M missile. What is the real meaning of all this? If the Americans deploy 150 interceptors in Alaska what will be the