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Cablegate: Putin Telethon Showcases Economic Gains, Highlights

DE RUEHMO #5068/01 2920332
R 190332Z OCT 07




E.O. 12958: N/A
SUBJECT: Putin Telethon Showcases Economic Gains, Highlights
Continuing Challenges

MOSCOW 00005068 001.2 OF 002

1. (SBU) In what should be his last marathon television call-in
spectacular as President, Putin showed his phenomenal depth of
detail on a host of issues, ranging from the need for a bridge in
Vladivostok to advice on how best to manage U.S. disengagement from
Iraq. Part political theater, part campaign event, the "Telebridge"
national conversation with the President followed the same formula
as in past years, allowing the everyday "Ivan Ivanovich" to voice
concerns directly to Putin in what appeared a carefully managed and
choreographed event. Three themes emerged as the central message of
this year's event:
* Pride in the economic accomplishments and a commitment to see
policies continued for economic development;
* An acknowledgement of ongoing challenges and a tendency to finger
point at regional elites for blocking policy implementation; and
* More chest-thumping on international issues, with particular
invective for the U.S. END SUMMARY.

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The Stage
2. (SBU) This year's production lasted three hours and five minutes
-- a new record for Putin. In all, he answered 68 questions, the
majority of which were modern day equivalents to the centuries-old
tradition of Russian "appeals to the good Tsar" about quality of
life issues. Correspondents moderated questions from small groups
gathered in towns across Russia, including Vladivostok, Kazan, and
the newly selected "Olympic City" Sochi. Moreover, the organizers
of the event fielded questions from a telephone bank, the internet,
and text messaging. In this regard, the event had undertones of a
"Jerry Lewis Telethon," with graphs showing how many thousands of
questions had been passed to a squad of cheerful operators in
Moscow. This year's event also included a short segment with
Russian speakers from Aktau, Kazakhstan, the first "foreign"
connection for this type of political theater.

3. (SBU) In each of the televised "stops" on the virtual tour, those
before the camera tended to represent the interest groups most
closely associated with United Russia (as reported in the weekly
news journal, Itogi) -- educated women in their late 40s and young,
ambitious "20-somethings" -- but also included pensioners, soldiers,
and peasants. During a segment from the Plesetsk cosmodrome, Putin
was able to watch a film clip of the launch earlier today of a Topol
ballistic missile. All of this was stage-managed beautifully; within
five hours a full transcript was ready on the Kremlin website.

Pride in Economic Growth
4. (SBU) President Putin began the call-in session by praising
Russia's economic growth. GDP has grown 7.7 percent in the first
half of 2007, which is above the forecasted 6.2 percent for the
year. Compared to recent years when growth was based on high energy
prices, two-thirds of GDP growth this year has come from
construction, telecommunications, transportation and retail. Putin
noted that Russia's gold and currency reserves have increased to a
record high of USD 424 billion. Fixed capital investment rose 25
percent and Russia holds USD 16 billion in foreign direct
investment. The GOR's Stabilization Fund holds USD 140 billion.
Putin declared that there would be no banking crisis, but did not
provide details.

5. (SBU) The impressive growth has lowered unemployment, increased
contributions to the federal budget and enabled the government to
raise wages and pensions. Putin touted real growth for wages at
14.4 percent and pensions by 21 percent this year, compared to 13.4
percent and 5.1 percent in 2006, respectively. He noted the birth
rate has reached its highest point in fifteen years and mortality is
the lowest it has been since 1999. Unemployment has fallen from
over 6 percent last year to 5.7 percent and more than 600,000 jobs
have been created. He urged support for small and medium business
development, which would enable middle class growth and secure
income equality across Russia. Corruption was much less discussed
than in previous call-ins.

6. (SBU) Putin admitted that Russia has been unsuccessful in
controlling rising inflation: the 12-month rolling inflation rate
now stands at 8.5 percent -- higher than the planned 8 percent He
stressed that inflation was inevitable, as Russia "is becoming part
of the world economy, and what happens on world markets affects us."
He blamed rising prices on food subsidy cuts in the European Union
and the growing demand for biofuels. He also stressed that the
difference between wholesale and resale prices can be explained by
the fact that a few middle men hold monopoly positions in their
regions and abuse personal ties with local authorities. Putin was
optimistic that prices would stabilize by the end of the year and
stressed that solving the problem was the responsibility of the GOR,
which has already made the decision to carry out grain and dairy

MOSCOW 00005068 002.2 OF 002


Haranguing Regional Elites
7. (SBU) The "telebridge" began in Vladivostok, providing a stage
for Putin to draw attention to the problems of regional development
in the Far East and Eastern Siberia -- an area that he again
heralded as of strategic importance for Russia. In discussing a
young student's quandary about where to go after college -- Moscow,
St. Petersburg, or overseas -- Putin expressed his concern about the
depopulation of the region. He highlighted the government's plan
for regional economic development, as well as the program of "Ethnic
Russian Resettlement" in 12 pilot regions, which was in great part
designed to address this problem. He singled out the National
Priority Projects as designed to improve socio-economic conditions
in smaller towns and create stable environments for residents to
live and work. Unfortunately, the President complained, those plans
and programs have not met their objectives, as "leaders in the east
of the country have no enthusiasm for these programs."

8. (SBU) Throughout the rest of the program, Putin returned to the
theme of regional responsibility and implied that local elites and
government bureaucrats often impeded sensible plans to improve the
quality of life. When asked why he agreed to head the United Russia
list for the December Duma election, he stated that his decision had
been shaped by concerns that the legislature remain "effective"
after the elections. He harkened back to the 1990s and what he saw
as the fecklessness of the Duma in implementing necessary policies.
What Russia needs to do in a time of transition, according to Putin,
is to follow a stable course and implement policies set by his

Criticism of U.S. in Foreign Policy Answers
9. (SBU) In response to a question from an hypothetically "ordinary
Joe" mechanic in Novosibirsk about a comment, attributed to Madeline
Albright, that "Siberia's wealth was unfairly bestowed on Russia
alone," Putin said such "political erotica" were common in the heads
of "certain" politicians. He then made the implicit linkage to the
U.S. war in Iraq as a campaign against a "small country, hardly able
to defend itself, with enormous oil reserves." Russia is not Iraq,
underscored Putin, and is able to defend itself -- and to that end
continues to strengthen the army and navy. (Comment: On other
occasions, including in the aftermath of Beslan, Putin has intimated
that the U.S. has interests in dismantling the Russian Federation.
End Comment) Putin later in the program criticized U.S. policy on
Iraq, positing that Washington's unwillingness to set a date for
withdrawal of forces is a disincentive for Iraqis to establish their
own government.

10. (SBU) The president's answer to a question about missile
defense, asked by a citizen of Kaliningrad, followed familiar
patterns. He aired his doubts about the danger of Iranian missiles
and called for the U.S., the Europeans, and Russia to determine the
true nature of threat. He again threatened reciprocal steps if the
U.S. and its European allies made a unilateral decision to deploy.

11. (SBU) Putin also promised to protect Russia's interests on the
economic stage. Responding to a question about Russia's accession
to the WTO, Putin said that Russia would join the organization only
on terms acceptable to the country and its producers, agriculture
included. The GOR has agreed with WTO members that there will be a
transitional period during which Russia's agriculture sector will
continue to be subsidized.

12. (SBU) Putin's general tone remained one of a man who plans to
see his work and vision continue into the future. Ignoring his
"lame duck" status, he made promises that programs would be seen
through to completion and personally guaranteed that certain
projects would be implemented -- even after his term in office ends
in May 2008. Moscow's political elite will spend much time and
effort searching for hidden meanings in the President's answers,
seeing this television marathon as a three-hour campaign stump

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