VZCZCXRO3657
RR RUEHDBU RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #5068/01 2920332
ZNR UUUUU ZZH
R 190332Z OCT 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 4723
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 2488
RUEHYG/AMCONSUL YEKATERINBURG 2789
RUEHLN/AMCONSUL ST PETERSBURG 4633

UNCLAS SECTION 01 OF 02 MOSCOW 005068 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PINR SOCI ECON RS
SUBJECT: Putin Telethon Showcases Economic Gains, Highlights 
Continuing Challenges 
 
MOSCOW 00005068  001.2 OF 002 
 
 
Summary 
------- 
¶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. 
 
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 
 
 
interventions. 
 
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 
administration. 
 
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. 
 
Comment 
------- 
¶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 
speech.