Like in the Wild West, US tells Europe to buy American natural gas at gunpoint – Kremlin spokesman
World leaders and the global business elite are coming together for the St. Petersburg International Economic Forum in a few days, amid calls for boycott. Should worry be on the cards? We ask the official spokesman of the Russian president, Dmitry Peskov.
Sophie Shevardnadze: Dmitry Peskov, it’s always a pleasure to have you on our programme.
Dmitry Peskov: My pleasure.
SS: So, we’ve got a big event coming up – St. Petersburg International Economic Forum – but this year it’s getting a lot of bad press in the West. And there are calls to boycott the forum. What does that really mean? What is the aim of the boycott? Does the forum feel any effect?
DP: I don’t share your view, actually. I think you are overly exaggerating this situation. Yes, we’ve heard the statement of the American ambassador in Moscow, he said that he was going to boycott the forum but it doesn’t mean that it will be boycotted by the representatives of companies, including those from the US.
SS: Are they coming?
DP: Yes, lots of them. Traditionally, they take part in the forum and they are going to continue with this practice. It’s 75 countries, 270 companies from all over the world, they all will be taking part in this forum. All in all, about 15,000 people are going to take part – it’s both international, foreign participants and local ones. You have to be very creative these days judging upon news coming from newspapers. Most frequently, it cannot be considered genuine news. You have to be very careful when reading these pieces of news. This kind of forums cannot be boycotted, you cannot create a vacuum, because if you create a vacuum instead of certain companies, this vacuum will be filled immediately by companies from some other countries. And all countries are pretty aware of that fact and they are very careful not to let this vacuum happen at the forum. So they’re all very active and even proactive in participating in the forum. It’s very interesting, it’s very representative – despite certain problems with the international economic environment. Still, Russian market is very attractive.
SS: We are going to talk about the investment climate a little bit later, but first I would like to talk about the political climate. Last year’s forum had pretty intense political climate. The US-Russia relations were deteriorating, new sanctions were coming in because of the Skripal Case. What about this year? Would you say it’s more welcoming or it has gotten worse?
DP: Well, it’s welcoming every year.
SS: I mean the general atmosphere.
DP: Our business, of those who stand behind the organisers of the forum, is to ensure our counterparts that climate for investments, for economic cooperation, is favorable – and we are doing our business. Some other countries, they, unfortunately, chose the way of trying to show the opposite picture. I’d say there are some signs of unfair competition on their end, but it doesn’t mean that this forum is tense. Just ask the participants, they would say that that’s quite a golden opportunity for them to establish contacts, to continue dialogue with their vis-à-vis in Russia. So, every year we see some parties who are doing their best to blackmail this forum but in the end we see it [the forum] happening successfully.
SS: The big story that I was talking about that sort of coincided with this forum is the arrest of the American investor Michael Calvey. It happened a month or two ago during another investment forum, so that’s why the American ambassador said “we are not coming”. So, he [Michael Calvey] was put in prison. Now, he is under home arrest. It’s much better, but does that mean that the American pressure is working? They are boycotting the forum and he is under house arrest.
DP: That doesn’t mean that American businessmen are not going to participate, not going to come. They are accredited and majority of them have confirmed and re-confirmed their participation. As for the Michael Calvey’ case, that’s a very unfortunate case, we are very sorry about that. Of course, we would like to see Michael among the participants of the forum because he’s been quite an active player in the Russian market since…
SS: For 15 years.
DP: For more than 15 years. We all know him as a very trustful businessman who is devoted to the Russian market, probably you know the news, he actually asked to…
SS: To participate?
DP: Yes, asked for permission to participate in this forum.
SS: Does he have a chance, is there such an option?
DP: I don’t know, I am not the one who issues such permits. Of course, we would prefer to see him among the participants. But I don’t think that we’re somehow entitled to give any definition to the case of Michael Calvey. We don’t know the nature of the case.
SS: But I am not really talking about Michael Calvey’s case. You are right, it’s not up to me or you to decide whether it’s fair or not, there are other prominent structures who will decide whether he is guilty or not. I am talking about the reaction to the case from foreign investors. For instance, Patrick Pouyanné of Total is also throwing his weight behind Calvey’s French partner Philippe Delpal who is in prison, not under home arrest.
DP: There was a meeting between French businessmen and President Putin a couple of months ago, and the issue of this French citizen and Michael Calvey was raised during the meeting by the participants. Mr. Pouyanné was among them. So, they received all the necessary explanation from President Putin. Not the explanation about the nature of the case, but the explanation that this case goes in strict accordance with the Russian laws and we do hope that at the end this gentleman will be freed, but nothing is being done voluntarily. So, that’s the Russian law, and you have to agree with and follow the law.
SS: Please, talk to me about the reaction, because the case – it is what it is. Once again, it not up to me or you say whether it’s right or wrong. But the President always says and you always say that we are very open and we will do everything in our power for foreign investors to come and have comfortable conditions to work in our country. But what are these promises worth when what they see on TV is how foreign investors are arrested?
DP: Listen, the situation actually should not be treated this way. Lots of businessmen are protesting against this case, because they think it’s a purely trade dispute that should be solved in arbitrage, not in criminal court, not through a criminal investigation. So, we have to wait until the investigation is over. And if it is proven that this is not a trade dispute, then everything that is being done is correct. We have to be patient and we have to understand that those prosecutors and investigators should have very serious reasons to put those gentlemen in jail for the period of the investigation.
SS: Is President Putin personally overlooking this, somehow following this case? Because it’s a huge case.
DP: Yes, of course. He is receiving information on that, receiving reports because it’s quite a loud case and he understands that it provokes lots of questions among some foreign investors. But law is law – you have to obey.
SS: All right, except American businessmen and investors, there is more to the forum. China’s president is coming and there is a lot of talk about this agreement to synergise One Belt One Road with Russia’s Eurasian Economic Union. It’s going to be a huge infrastructure project and even the Western press… The Hill writes that the sanctions made it possible for China to invest more into Russia, and they are now talking about an Eastern Entente. It has a ring to it. What do you think of it? Are we really in for an Eastern Entente?
DP: Well, of course it’s a very attractive project, and actually it’s kind of philosophy, not just a project. It’s a compilation of huge projects that our Chinese partners have in mind. Russia is not participating directly. Russia is a country that is looking for integration with this project to this or that extent that is compatible with this project. Of course, China is not investing a lot, we cannot say that China is investing a lot in Russian economy, there is still a lot of room for enlarging these volumes of investments from Chinese businesses. So, we do hope that after some time the investments will rise. China is a very close partner with Russia. And we cooperate successfully, that means that the volume of our trade is constantly rising not depending on the international economic environment. We had been planning to achieve the goal of $100 billion and it was even higher at the end – $107 billion. If you compare it with the balance between the States and China, it’s quite a humble amount but, nonetheless, for our economy, for the size of our economy, it’s a very significant amount. China is not our partner number one yet. Still, the EU countries are number one for us and I cannot agree with those who say that Russia is turning eastward. No, I hope Russia will never turn eastward. The Russian eagle looks to both sides – to the West and to the East, that’s the nature of every policy of Russia, be it political and diplomatic or economic activities.
SS: Mr. Peskov, I have heard you on many instances say that even though the Chinese are very close partners with Russia, they are often very cautious in relations with Russians and in dealing with Russian businesses. I got to know that Chinese banks are sometimes refusing to serve Russian customers because they are afraid of American sanctions. So when you think about it, does it mean that de facto Russia-China economic relations are dependent on Washington?
DP: Everything is interdependent in this world. None of the countries are free in their moves and their decisions. Every country has to balance and rebalance their activities in the field of economy because we are all interdependent. So that’s why yes, of course, we can feel an influence of American sanctions in our bilateral relationship, but at the same time we are sovereign enough to take those steps which are being considered of extreme importance to us and, of course, the dimension of bilateral economic relations between Russia and China is a very significant dimension for the global economy.
SS: But would you say that Western sanctions against Russia are also taking a toll on how Chinese can invest in Russia, Chinese make business in Russia?
DP: Businessmen are very careful in all the countries, not only in China. Every businessman has to keep in mind all the factors, all the elements that can influence their future. So some Chinese businessmen prefer to be more careful, some of them are more proactive in their activities, some of them are waiting, some of them are building factories, automotive factories, in Russia; and one of those will be inaugurated during the visit of President Xi to Moscow.
SS: Would you say that – not talking just Chinese businessmen or investors – would you say in general that people have found ways to go around sanctions, have found loopholes in sanctions to actually do their business as usual with Russia, or not really?
DP: Well, there is a certain influence of sanctions for various international potential investors in Russia, businessmen or those who can potentially launch their business here. Yes, some of them would prefer to be more cautious about that and, in their case, we can speak about negative influence of sanctions, but not necessarily all of them prefer to keep in mind the existing sanctions. Some of them, to the contrary, would try to take advantage of reluctant behavior of the others, to take advantage of the opening markets here.
SS: And also, regardless of sanctions, Russia is still building huge projects, energy projects like the Nord Stream 2 gas pipeline in Germany. And we all know how Americans are reacting to it. They are saying the companies that are involved in this project from the German side will actually be sanctioned and the sanctions will be so hard that it will be difficult to swallow. Right now Germany is very firm. They are saying “we don’t really care, like, we need this project and we are going through with it”...
DP: Not only Germany, by the way. You’ve seen the president of Austria in Sochi and others…
SS: But, you know, I just remember how outraged all the EU was when America enlarged its sanctions against Iran. But, at the end of the day, most of the companies, largely, are obliged to withdraw from Iran even if they don’t want to. So when it comes to Nord Stream 2, what are your thoughts? Are you confident that it’s going to go through?
DP: That’s a huge international project.
SS: But we have seen other projects being ended before they started.
DP: Well, that is being performed for the benefit of those countries supplying natural gas and receiving natural gas. The project will be a very significant contribution for energy security of Europe. And the project is a huge and very serious competitor for American gas producers and suppliers.
SS: Is that the main reason?
DP: Of course. Instead of fair competition they prefer to act like in Wild West times. They just show the gun and say that no, you guys here in Europe, you are going to buy our natural gas and we don’t care that it is at least 30% more expensive than the gas coming from the Russians. This is the case.
SS: I want to talk a little bit about Putin and Trump because after the last meeting between the two presidents was cancelled in less than 24-hour notice in Argentina, you said that now it’s up to Washington to arrange the next sit-down. The question is: is Moscow right now in sort of a wait-and-see position?
DP: Yes, it is.
SS: How does it make you feel? I mean, I understand that this is a wise decision because it’s better to talk than not to talk, but when Trump cancels this meeting and eventually that it happens, does it get under your skin that Washington reserves their right for this sort of mood swings?
DP: You know that from the very beginning of the presidency of President Trump – our president was expressing readiness to establish a good relationship with Washington, to try to repair this damage that was done by President Obama during last month of his presidency. And from the very beginning President Putin insisted that we were ready to go ahead as long and as advanced as our American counterparts are ready to. Unfortunately, now we see that they are not ready to advance at all. But President Putin is quite an experienced and quite a patient president of quite a patient country.
SS: So he doesn’t take it personally? He doesn’t feel it’s disrespectful that Americans [say that they] don’t want to meet, and [then suddenly], okay now we want to meet?
DP: We want to meet. We see lots of strategic questions on the agenda that should be tackled on the level of two presidents. There is no way for these problems to be solved on a lower level. We understand that lots of questions are coming from the American side that also should be discussed by the presidents. And we understand that those problems are idling in absence of the dialogue on the highest level. So not meeting each other is illogical. And it contradicts the national interests of our two countries. But we cannot be – I don’t know the proper English proverb for that – more holy than the Pope, as we say it in Russia. So that’s why President Putin has said that he was going to wait.
SS: The way Trump talks about Putin is very sympathetic and very respectful and it’s just obvious that he likes the man. But then, people who surround him are completely the opposite. Their views are completely the opposite of sympathetic towards the Russian president. A lot of people are saying that while the Mueller investigation was going on, of course, Trump’s hands were tied. He couldn’t make a move towards Russia. And now that there is no evidence of Russia’s interference on the government level in the American elections, it is going to be easier to be nice to Putin and to sit down and talk and not really care about what people around him say. Do you feel like this meeting at the G20 summit is going to be any different from others?
DP: Well, first of all, we still don’t know if the meeting is going to take place or not, because it wasn’t initiated officially by the American side.
SS: There wasn’t Mike Pompeo in Sochi…?
DP: No, he was in Sochi and he was speaking about a potential willingness to have the meeting. But this is not a reason for a meeting to take place. You have to initiate it officially, somehow. So it is still ahead, it never happened yet. First, being the press secretary of the president of the Russian Federation, I can speak on his behalf and I can tell you one thing. When President Putin says something, he means it. And when he means something, he does it. This is what I know for sure, for one hundred percent.
SS: So the conclusion is that if Trump is willing and confirms the meeting…
DP: You make your own analysis.
SS: Alright. I have one last question that has nothing to do with anything we have just spoken about, but it’s very relevant for most of the Russians. The so-called Sovereign Internet bill that is coming into force in November. This is a legislation that is aimed to allow the Russian internet to continue working in case Russia is completely cut off from the global infrastructure.
SS: But people I have spoken to, people who are in the business, are saying it’s physically impossible to do that. I mean I don’t know, that’s what they are saying. Do you, as representative of the Russian government, have a reason to think that someone is trying to cut us off from the global internet?
DP: We have every reason to think [that]. We faced American sanctions, we faced some threats coming from international trade organisations, from American trade organisations, not international, because what they did was illegal from the point of view of international law. You would probably remember the potential threats coming from international payment systems, I am not naming one right now.
DP: I’m not naming them. You remember that? So there were some talks about a possibility of cutting Russia off those systems. Now we see a situation when, for example, one operational system is saying that they would cut off a Chinese company from their products. I’m speaking about that trade war between America and Chinese producers of communication devices. I am speaking about the trade war between America and Chinese producers of communication devices. So we witness these trade wars, we witness those threats. We witness results of those illegal actions when we see what is going on vis-a-vis Iran, what’s going on vis-a-vis China, what happened vis-a-vis Russia in the near past. And we understand that we have to be self-sufficient, we have to be sovereign in all our capacities. All this is also applicable to the internet. The internet is an international environment but, unfortunately, we are living in a world where international law can be jeopardised by certain countries. We have to take measures of precaution.
SS: Dmitry Peskov, great talking to you!
DP: It was my pleasure. Thank you very much!
SS: Thank you!