Debate: Alexei Navalny and Anatoly Chubais

[music]

Direct Conversation

Good evening, my name is Ksenia Sobchak.

And this is Direct Conversation, here and now. I’d like to ask

to invite into the studio Alexei

Navalny and Anatoly Chubais.

[music]

Anatoly Chubais, we’re waiting for you by the registration desk.

Registration.

I’m glad everything began with a handshake.

Thank you for agreeing today

to this conversation. Let me remind our

viewers that today’s meeting, our conversation,

our discussion,

is the logical continuation of the discussion

that began after the post by Alexei

Navalny,

in which he accused Rosnano and Anatoly

Chubais personally of improperly spending

huge amounts of state funds, vast financing.

That is what we will be talking about today.

So, let’s begin.

[music]

Direct Conversation. To begin, I’ll outline

the rules of today’s broadcast. We will have,

let’s call it conditionally,

four rounds of our discussion. In the first,

I will ask a general question, and each of you will have

four minutes for a kind of opening statement and

remarks. In the second round, you will have

the opportunity to ask each other questions,

three questions each, in turn. In the third round,

you will face questions from viewers, which they

sent in to TV Rain (an independent Russian TV channel).

These questions are already posted on the website, and I

will choose several interesting ones for each

of you. And in the final round, we will sum up

the discussion and announce the voting.

Those are the rules. I would also like

to say that by mutual agreement we

decided that today’s discussion would be

narrowly focused and tied to the topic of

Rosnano. We will not, I hope, move

into personal attacks or discuss any

other topics related to

the biographies of our participants, simply

in order to create a certain new standard

of public debate. If everyone agrees with that,

then I suggest we begin with a question

and then with Alexei Navalny’s opening statement

as the attacking side; we also

agreed on that before the broadcast. So, my question to both of you:

you are both supporters of liberal

reforms, and on behalf of all viewers of TV Rain

I want to ask you: why did you decide

to choose each other specifically as opponents

when there are so many people around

in opposing camps? Thank you.

Thank you very much, Ksenia. Many thanks to TV Rain

for organizing these debates,

which are, of course, extraordinary

by today’s standards. And of course I cannot help but

begin with a compliment to Anatoly Borisovich:

thank you very much for

turning out to be the only head

of a state corporation willing to engage in an open

discussion,

willing to answer uncomfortable questions and

in general to interact with society in

such an open way.

Nevertheless, despite this compliment,

answering your question, Ksenia, I want

to stress in particular that in this sense I

am certainly not in the same camp as Anatoly Borisovich.

I came here to argue with him

precisely as with a representative, perhaps the foremost representative,

a pillar of state

capitalism and one of the leading figures

in the system of state capitalism

that Vladimir Putin has built, and in which

Vladimir Putin, among other things, created

the company Rosnano,

which we will be discussing today. I

truly believe that the company

Rosnano, in its current form, is ineffective,

unnecessary, and should be dismantled

or radically reformed. I

have three very clear messages

on this subject, three points on which I

stand.

First, and most importantly, let me begin with

a quote from a remarkable, very

smart man, who said this in 2006:

“Building state

capitalism is inefficient, almost always

corrupt, and strategically

unsustainable.” In 2006,

that man was Anatoly Borisovich

Chubais. And now I want

to appeal to Chubais of 2015 with the position of

Chubais of 2006,

saying that if there is one thing we

have learned over the last fifteen years, it is

that state corporations do not work.

None of them work; they bring us nothing.

The company Rostec (Russian state technology conglomerate) will not

give us any technologies; the company

Gazprom is not even capable of increasing

production; and the company Rosneft cannot

do anything at all except increase

salaries and bonuses. That is partly why from

Rosnano,

no matter who runs it, Chubais or

Ivanov, we will not get any nano-

technologies, because it is impossible.

State capitalism, as

Chubais said in 2006, is unsustainable

and ineffective. Number two: the inefficiency

of Rosnano is directly

evident from the key indicator. You

wanted Russia to become a leading

country in the field of nanotechnology. Thank

goodness there are two indicators that no one

can fake: the number of

publications and the number of patents. If

Russia is a leader anywhere, then

it is a leader exclusively in the area of

financing—we are second only to the United States, and

Japan, but in terms of the number of publications we are

in 12th place, and by the number of patents in the world, in

Western Europe, if we look at it, we are in

27th place, and in that sense we have not achieved these

results over seven years.

And in terms of the number of publications, we have actually fallen.

And third, finally, if we look at

specific Rosnano projects, the largest

projects,

Liotech, Optogan, the so-called Siberian

Silicon — you cannot deny that

these projects have failed. They simply do not

work. So this state

capitalism, this kind of venture

state venture model, simply does not

work, and there is no arguing with that.

So to sum up, Anatoly Borisovich (a respectful way of addressing Anatoly Chubais by first name and patronymic),

2015.

Please remember Anatoly Borisovich

of 2006, and finally admit that for Russia to

develop nanotechnology and any other

technologies,

it needs to attract investors, it needs

to develop the judicial system, and it also needs

to develop competitive elections,

free media, and for now investors

— foreign and even Russian ones — are

running away in horror when they see all these

state corporations of yours, including Rusnano.

They run because they are afraid of you. Please do not scare them.

Please, given that you are

a well-known person, a leader of public

opinion, and unlike

me and many others, you have the opportunity to speak with the State Duma (the lower house of Russia’s parliament), with

the government, with Putin — then don’t stay silent, and

state this simple idea honestly:

it is not state money — and so far you have already

received 240 billion rubles (about several billion U.S. dollars)

effectively from the state — that will give

rise to nanotechnology, but rather normal

institutional development. Thank you very much.

Thank you. We are a little short on time. Thank you, thank you.

Thank you. Well, and to TV Rain (Dozhd, an independent Russian TV channel) as well.

It seems to me that in any case, first of all, when

people directly express their

position, that in itself is always

grounds for respect for me. And secondly, I

think the best way to find things out is not only

by collecting some kind of black box

or some compromising material (kompromat), but simply to

ask questions directly and get answers to them,

which is exactly what you are doing now.

Therefore,

let us start with the first thesis: that Chubais

in 2015 betrayed the Chubais of 2006, integrated himself into

the Putin regime, sat on financial flows

under the roof of United Russia (the ruling political party), and the whole

rest of that set of accusations.

On the first point, from the first word to the last,

I am ready to repeat once again what

I said in 2006, and by the way not only

in 2006 — I also had some involvement

in the 1990s in what was, in essence,

the creation of a market economy in Russia.

Second, if we are speaking concretely about the substance

of what Rusnano does, then please,

Alexei, please do not confuse the term

known as state capitalism

with the term state companies — that is

not quite the same thing, or rather, not

the same thing at all. And if, as a second step, you were to even slightly

analyze the substance of what

we do, then you probably, while preparing

for this conversation,

would know that one of the basic

principles of all our investments

— and as of today we have 87 projects — is that

we are always a minority shareholder.

We do not just always have a private

partner; it is a partner who is the

controlling shareholder. And this is done

not by accident, but so that as a result

of our work in any project

we can exit that project. We enter

projects, support them, and then exit, and the

project remains in the ownership

of the majority shareholder, who

is, in fact, the driver behind it.

In that sense, my position today — and honestly,

I think it was exactly the same in 2006 —

is that if the state is capable of providing

support competently,

without destroying the owner's control,

then that is something it not only

can do, but should do. That is how

Silicon Valley emerged — it was financed for 30 years

by the Pentagon; without that there would have been

no Silicon Valley. That is how

the innovation economy emerged in South

Korea; that is how it emerged in Israel, starting

with the Yozma program and much else that

professionals know well. In that sense,

your first point — I reject it completely,

from beginning to end.

Now, the second thesis concerns the idea that

publications are needed and patents are needed. I agree

with the first and the second, but still, if you

had looked into it a little more, you probably

would remember what Rusnano was created for.

We were created for the purpose of building a nano-industry,

and in that sense our performance indicators do not include

publications at all — publications are the responsibility of

our colleagues from the Kurchatov Institute or

the Academy, and they do not even include patents, although

for the record, our portfolio companies do have them.

But that is not

the main criterion.

The main criteria are that we have created,

in essence, a nano-industry itself,

the volume of production in Russia at the

plants built by us. And in that sense,

well, you also know that all our

partners' indicators, as of today,

have been met. And finally, on the subject of

successes and failures: you probably did not accidentally

select, in preparing for this, exactly those projects

that are best known as our

failures, and which we ourselves talk about when

our failures, although I would not agree with all of them

you also mentioned the supposedly unsuccessful project

PolySilicon and the Liotech project, which

are far from being failures. We still

have a product called

the Russian lithium-ion battery, and

we understand how we are going to develop this product.

To finally set everything

straight, I will simply show you a few

photographs that conclusively bring this

story to a close. Here are several projects

that exist today among

the plants we built—projects of a kind that

did not previously exist in the country, and projects that

now have a real chance, and they

are operating. If you could put them on, and

please, let me run through them quickly in

the remaining time.

The Mikron project—no matter how much it is criticized—

whatever anyone may say, it is a genuinely

existing flagship of Russian

microelectronics, the most technologically

advanced enterprise in Russia in the field of

microelectronics, operating in Zelenograd.

There is nothing more efficient in the country.

Built by us together with the company

NEVZ-Ceramics, it revived Russia's

high-tech ceramics industry, from

armor coatings to knee-joint implants.

joints.

Danaflex: in Kazan, a plant was built for

the production of packaging film

for modern high-tech

food products, including those

made by leaders of the global

food industry in the West,

and supplied here. In Naberezhnye Chelny,

the best house-building plant in the country

integrates technologies ranging from

high-efficiency glass to

composite materials technology.

At RM Nanotech, we were the first in

Russia to build a plant for the production of

membranes that simply did not exist

in our country. And as you understand, this is used in everything from

gas separation to water purification.

And here, too, we effectively launched a Russian

composites industry, which is also

the foundation for the production of

modern fighter aircraft

and

modern sporting goods. Nuclear medicine centers—

tomorrow we are going to

Tambov to open another such center.

This is ultra-early diagnostics, which for

sick people is literally a matter of

life and death. Pharm-Sintez, which created one

of the two Russian pharmaceuticals that today

are being developed in the West by decision

for approval to begin

production there, and so on, and so

forth. I see I am running over time.

Unfortunately, you have already gone over your time.

You are exactly one minute over. I think it would

be fair to give

Alexei Antonov a chance—how do you comment on this?

Thank you, thank you for

the wonderful presentation. You could easily

head a PR company.

It was a great presentation, but you understand that when I

spoke about state capitalism, I

was not confusing anything—this is exactly what I meant.

I disagree when one person, even if

remarkable, is engaged in everything—

venture capital, and also

fundamental research, and so on.

All of this together, to me, is a frightening form of

capitalism: one person—Putin—decided

that we should develop nanotechnology. You

have told the story many times, very well, of how you

in 10 seconds

agreed to become the head of it. He simply

found a manager in 10 seconds, gave him

240 billion rubles, and they started building

some factories.

We analyzed publicly available

information on your largest projects,

which account for 30 percent of

investments. All of these projects are failures. I am not

saying that you have no successful

projects—you invested 158

billion rubles, of course you

have some successful smaller projects—but

all the largest projects are loss-making, and

that cannot be denied. It is simply a fact. But

when it comes to

your Liotech, which you said

might not be such a bad project—last

week

they stopped paying salaries. That probably

does show that the project is not very

good. Anton Borisov.

I am against all these things

that are done by private business all over the world

being done by the state. Madam Moderator is forced

to interrupt you. There will now be an opportunity

for a direct debate between the speakers.

You may either respond right now

or ask your question. Your point has been made.

That is all. It seems to me I should

I think it would still be fair if

Alexander were allowed to say something.

It would be fair if you answered, but then

we move on to the second round, agreed?

And will I be able to respond to this later?

Very briefly, perhaps, and directly:

once again, we are not engaged in

fundamental research at all. I cannot convince you of

that, apparently. That is first. Second, you

are clearly not choosing at random—you are selecting the most

problematic projects. I categorically disagree with you

that our largest projects are

all like that. I could just as easily talk

about Novomet,

whose products today compete with

Schlumberger on global markets in submersible

pumps, or about Monocrystal, which

today is a world leader—you know that.

you know, the world’s largest producer

of sapphire substrates for the LED

industry, holding 30 percent of that market

this is the largest project, yes

indeed, with the Liotech project we do have

problems; it is not one of the successful ones, but

as I said, we do not consider it a failure

it is in a difficult position, but it is a product

that we definitely intend to keep developing

in that sense. Well, what does Putin have to do with it? Ten

minutes of decision-making? We are talking about a factory

that has been built and that in any case

will remain in Russia, which our

...prepared 240 rubles

Anatoly Borisovich, you speak as if it all

came out of thin air. The state invested

240 billion rubles in your company in the form of direct

funding, as well as state guarantees, bonds, and so

on. It’s not as if you simply reached into your

pocket and said, “Here, Alexei, look, don’t

you dare criticize me — here’s a factory.” You took

a great deal of state money

and built and launched a number of projects

most of which, the biggest of which

of which

have, sorry, failed, and therefore

some were unsuccessful and some were successful

140 billion rubles, in accordance with

our business plan, will be returned

through tax revenues from the factories that have been built

no later than 2019–2020. Also

right now there will be an opportunity

in your open debate, with regard to each

other, to ask questions. Let’s begin the second round

of questions to each other. So then, who

[music]

Direct Conversation. Alexei Navalny. The second

round begins with Anatoly Borisovich

well, basically, we said, we agreed, but

still, Alexei, to be precise

you have only recently been dealing with the nanoindustry, as I

understand it, so in that sense I don’t have any

very direct questions, but if I may, there is

one main point that

I actually wanted to express

You see, from the outset Russia seems to you like a picture

that is entirely black and white. I simply remember very well

that letter of yours from which

all the discussion began, with the text saying that this

was a kickback-and-embezzlement outfit from the very beginning

created for insiders, which

lost all the money and is now demanding more, and

so on and so forth. When I hear

that text, I simply do not think about

the political process in which

you naturally exist — of course you think about it

that is understandable and natural — I simply think about

real, living people. There is, for example,

Mikhail Rudolfovich — I will now try

to put it properly — a corresponding member

of the Academy of Sciences from Novosibirsk

who has spent 25 years working on carbon

nanotubes, with which the nanoindustry began

the nanoindustry

the whole world knows about the spectacular effects

of carbon nanotubes, but no one in the world

— not Germany, not Japan, which worked hard on

this — was able to solve the problem of creating

modern production facilities. He went ahead and solved

that problem, step by step: first a tabletop

setup, then in a garage, then

a laboratory one, until today

there is genuinely in Novosibirsk one of the best

carbon nanotube production facilities in the world

with a price one hundred times, one hundred times

lower than the best global benchmarks. He

reads your text

“a kickback outfit, they couldn’t do anything,”

“they ruined everything” — how long is this going to

go on? “Disband them to hell”

I will not allow that. I will not allow anyone — neither

a federal minister

nor the leaders of opposition parties in the

State Duma (the lower house of Russia’s parliament) — I will not allow anyone to drag those people through

the mud, excuse the harsh

expression, because I am responsible for them, and

because I know what it took — he had to devote 25

years of his life to it — and I know

that with this plant he advanced Russia

more than many politicians ever do

Please, choose your words — don’t

operate in a black-and-white logic. Or do you consider

that the only possible view is one that fully

confirms all those accusations that

were set out in that letter? Still,

Of course the world is not black and white, but one thing in your reasoning

troubles me, namely that when I criticize

Rusnano, you put in front of you

a respected academician and start talking about

Navalny. Well, here is my answer to the respected

academician: no, I want to discuss Rusnano

— your state company, your

this rather interesting

state venture, where apparently

there are officials, and it is supposedly not quite a state company

Can I just finish my answer?

I am not saying that you have no successful

projects; of course you do. But when I

simply took your reports and read them from

2007 to 2014, I see that you

invested in 115, in my count, projects, and

simply adding up your profits and losses

for each year, I see 29 billion

rubles in losses. That is why I say that

the main thing you have produced so far is

losses. And, excuse me, in

August 2014 you also asked for

another 100 billion rubles from the National Welfare Fund

You tell me

not to allow something, and I say that I will not allow you

— within the limits of my, admittedly perhaps

rather modest abilities — simply

to keep pulling money out of the

national wealth fund

as all your colleagues in other

state corporations do. The world is not black and white

there are certainly good things, there are

wonderful, brilliant scientists, but in

Overall, the results of your company's work

now look completely

unsatisfactory. Please note that

indeed, we asked for reports of corruption to be sent to our black box

— facts of corruption, and so on.

I'm not pulling them out here from

my pocket — these corruption allegations — because

I have no proof. But openly and

quite simply, your reports, the Accounts Chamber report (Russia's state audit office),

and everything else simply show that

— forgive me — the company is still performing poorly.

In your defense, I will say this:

no one right now...

still, I insisted that I say this

in your defense: right now, you cannot

make money from nanotechnology in Russia.

It's impossible. I don't understand at all why you

started building the company in such a way that you

are supposed to return some money. You will

never get it back in Russia, because

at the current stage of nanotechnology

development, globally, these technologies

are not the kind of technologies

you can make quick money on.

That is why I believe you are developing

in fundamentally the wrong direction. You tell me

something frankly outrageous, excuse me:

among your indicators there are neither patents nor

publications. Then what is all this for?

What I want is for you to fund this

wonderful scientist, to fund

fundamental research,

applied research at an early stage,

and let excellent scientists receive very

large sums — we'll give you more money for that.

Yes, for scientists — fine. But I am against you

doing business at the state's expense.

You're engaged in business, and you're doing it badly.

As Chubais said, since 2006 he has...

The first giant victory. Alexei

Navalny said that not all projects

are bad. Fine — and now

let's try to structure

the second part of our discussion. I already

responded to the remarks that were made, and

here is my question-and-answer point: perhaps now

you can ask your question, and if it were now

formulated clearly, then it would be possible

to answer at least one of them. First of all,

it was said that Rusnano had a loss of 8,

13, 21 — but according to your own

reporting, it was 29 billion. You're mixing up positives and negatives.

Positives and negatives are combined

in a different way. First, the company

is planned to operate at a loss. Do you think I...

Two years ago, in one respectable...

Yes, based on the results of 2014, as you know perfectly well,

we made a profit, not a loss.

So from the standpoint of...

Please explain to the viewers what exactly

that profit came from. Certainly not from what

your friends write about regarding foreign-currency

deposits that were revalued. We did not...

because of that.

Well, of course not. Our foreign-currency deposits

had nothing to do with it at all. The profit was generated

through effective operations and

an increase in the fair value of our projects,

because we have a significant

share of projects with business diversification in

foreign-currency jurisdictions, which

were indeed revalued due to the exchange rate. Two

factors were at work. But the most important thing

is that you did not even notice

that.

I cannot simply brush aside these remarks.

You just said that we should

be funding science, and funding it

— Mr. Alexei, that's your point of view, fine, but

you truly do not understand the subject. We should not

fund science and R&D directly, but

the companies we created are beginning

to finance it because their businesses need it.

As of today, this year,

7.2 billion rubles

— I have told you about this — will go toward

funding not from the budget and not from Rusnano,

but from the businesses we have built.

These are the same businesses I was also talking about.

Not by chance — because without science they

cannot develop. Their share of spending

on R&D is about eight times higher than that of

Russia's manufacturing industry.

That is how business demand for

science funding is created.

Comparable state

funding was being distributed when...

In any case, they understand perfectly well what

they need and what they do not need in this sense. But without

fully understanding the subject, there is no need for grandstanding.

The picture is not black and white; it is a bit

more complicated than it seems to you.

I cannot tone down the emotion here, because

240 billion rubles are at stake, and if

— forgive me — in your official core

goals, goal number one

is stated as making Russia a leader

in the nanoindustry. I believe that if you

at the same time say that you are not

interested in publications or patents, but

are interested only in juggling

numbers, then you are misleading us.

We are interested in patents.

The nanoindustry, excuse me, cannot

develop without knowledge, and of course

it also cannot develop without patents.

What happens if there are no patents...

whether they are taught or not...

I did not say that it was only about patents.

It seemed to me we were almost getting lost in

details. The goal is not patents as such; the goal, it seems to me,

is that otherwise we will just go on

talking past each other endlessly. Still, I

want this to be interesting for viewers as well.

So let's move on to

specific questions. I think that Alexei Navalny

has them, and Anatoly as well. I

would still like to move away from general questions.

Excuse me, but after all,

I’m not speaking to just some employee here.

As the head of Rusnano, you are one of the most well-known

politicians in the country.

You are someone who influences people’s minds.

The moment I wrote that post—within five seconds—

you can’t imagine how many people

wrote to me, people I respect.

“You bastard, how dare you go after Chubais?”

“Stop immediately.” Roughly speaking, that’s what they were saying.

They say you influence a huge

number of people. So tell me,

as a prominent politician and as the head

of Rusnano, do you think that what

the country’s political leadership is doing now

over the past three years in terms of developing

science and fostering business

and entrepreneurship, and so on—does it

harm Russian science and, in particular,

nanotechnology, or is it rather

beneficial? Thank you for the question. Three minutes to answer?

All right. If we’re talking specifically about

what has been done over the past three years,

I would probably broaden the timeframe a bit—

to five or six years at least. There have been many steps

that were absolutely right,

balanced, and well thought out. And there are things

I disagree with. About both of those

one can speak clearly even within

three minutes. On the latter, I categorically

disagree with the decisions that led

to the shutdown of Zimin’s foundation (the Dynasty Foundation, a major private science charity), because I believe that was

a real blow to Russian science,

and I hope those decisions will be reversed.

I could go on about other mistakes in

this area, but at the same time I cannot fail to

see that in Russia, despite

the actions of many politicians, including

despite the actions of many others,

despite the actions of our esteemed

“competent authorities” (a common ironic Russian reference to security and law-enforcement agencies), and very

“competent” opposition politicians,

despite the obstacles that arise at every step,

and despite all that, I can say with certainty:

don’t help me, I’ll manage on my own.

The truth is, what is emerging is what

is called an innovation-driven economy.

It is emerging for a whole range of reasons, not just

because of the state. Russia is structured in such a way that

you cannot create innovation in Russia by government order.

You can’t create innovative companies by decree either.

So at the science stage there is

the Skolkovo Foundation, which, incidentally, funds

science. Then at the next stage,

the venture stage, there is the venture

corporation that finances early

stages. Then there is us. And as a result

of all this—and I say this with complete sincerity—

I am ready to say:

believe me, this is not propaganda, and not, not, not

some attempt to curry favor with you—

I genuinely believe that for the past six or seven years in Russia

an innovation economy has been built, step by step.

It’s just that with an innovation economy,

with innovation as such,

it’s like in an old joke about becoming an intellectual:

it’s very simple—you need to graduate from three universities,

except one must be graduated by your grandfather,

another by your father, and only the third by you. So we

are only now finishing the first university.

Only the very first

shoots have appeared so far.

They have sprouted in precisely the environment in which

you work as well.

Probably, if you were an opposition

politician in the Netherlands, things would develop somewhat differently

for you. But in this country, under these

conditions, all these Russian

mechanisms

operate in full, from beginning to end. But within them,

something real is emerging. More than that,

it is emerging to a significant extent

thanks to government support. And these are

facts that, regardless of political

orientation, any effective analyst

or politician simply cannot fail to acknowledge.

Well, I think that if

Alexei were a politician in the Netherlands,

his career would indeed have unfolded differently.

That seems to be complete consensus. We can move on

to the next question.

Anatoly Borisovich, this is your chance

to ask Alexei one more question.

I won’t take up time with a combative question,

or keep pressing with questions.

Asking Navalny questions is not really

my style. Any statement can easily be

turned into a question without actually saying one.

So I would just like to make

a brief remark of the following kind. Perhaps

you, Alexei, strayed a little beyond

nanotechnology, so I too will allow myself

to step a little outside that topic—though if I go too far,

please correct me. But this is serious:

your entire framework,

all these claims and accusations, is built in such a

completely black-and-white, utterly

black-and-white way.

You’re embarrassed now, and rightly so.

Tactically, I appreciate that. But at the same time,

what you actually wrote—what is written with a pen

cannot be chopped away with an axe, and on the internet, as

we know, even less so. It is simply an outrageous

insult to hundreds of thousands of people

who are actually doing real work. You see, what I mean is

that Russia is divided not only into

the opposition and the authorities—that is, of course, an important

division. There is another division

that is no less important: the division between

those who try to get things done in our

conditions, amid our difficulties, amid our

corruption, which you are fighting against,

and those who stand on the sidelines and say:

“This is wrong, that is no good.”

It just so happened in my life—well, that’s how it turned out—

that I have spent 25 years at this

crossroads. Twenty years ago, in much the same way,

Grigory Yavlinsky was saying the same sort of thing about me again.

which precisely reflects those same positions

told me that everyone steals everything

you can't do anything wrong there either

Gennady Zyuganov said essentially the same thing as well

Zhirinovsky didn't say anything different either

he told me the same thing about how they would act there

Oksana conveys it professionally

Dmitrieva from A Just Russia also said the same

they told me essentially the same thing

our respected, successful...

Barsukov, Kh..., Korzhakov—not everyone, at every level

at every stage they are against it, all of them, at every stage here

don't become part of this environment of confrontation

to join that line—you have a real chance

to become a politician of a different era, of a different

class; don't slip into this easy

and convenient, sweeping way of saying, 'Now we'll'

'smear them all, hit them all—now they'll'

see.' That doesn't work in the long run, and I

would like to see you as a politician, because

I disagree with much of what you

do, but I would genuinely like to respect

you. Opposition figures, don't stop me from doing that.

Of course, you can say you couldn't care less

about my respect, and you have every

right to feel that way. I'm not imposing it on you, but

believe me, this division between those who

do things and those who prevent things from being done, who watch

from the sidelines or simply get in the way

this is a division behind which stand hundreds

of thousands of people in our country who

think the same way I do. Don't reject them

in your work. That was Anatoly Chubais's three-minute

statement. Alexei Anatolyevich, your three-minute

response.

Your attitude toward me certainly matters to me, and I

don't want to be loved, but your

attitude toward me, as toward any other

person in Russia, matters to me, and I will not

stop

explaining my position, and I hope that you

will understand it. It's very interesting that you

mentioned Yavlinsky, because while preparing

for this debate, I watched all your debates throughout

your entire history—with Yavlinsky and Rogozin, all of them

I watched. Of course, I prepared seriously

I read all your

reports, Rusnano's reports—I read a great deal

It was very interesting. You

you said roughly the same thing to both Rogozin and Yavlinsky

roughly the same thing: 'Yes, I criticize,'

'but I'm the one doing things, and you're the one criticizing.' I think

well, maybe he wouldn't put it exactly like that, but still

and now you're saying the same to me, Anatoly Borisovich

Many years have passed already. Please, enough

with that. I really strongly dislike

this position you've created

for yourselves, this world in which you're some group of amazingly

wonderful managers from the city of

St. Petersburg

you came, excuse me Ksenia, and took over everything

and for many years now, all of you

have been running things

and you're sitting everywhere, and you're supposedly the best

the best deputies, the best state

managers, and somehow you just can't be

dislodged. And when people start criticizing you

you say, 'Why criticize me like that?

Navalny, I'm the one doing things, and you're not'

You're doing things? You received

240 billion rubles and you're 'doing things' with it

I disagree with that, Anatoly Borisovich. I'm not

speaking specifically about you, but about this whole

St. Petersburg mafia—'mafia' is a bad word—let's say, circle

Well, it's time for things to move on somehow

Are you really telling me that I

am somehow not a proper politician? I

am barred from running for office, my party was

liquidated

I am fully

prepared, excuse me, to take

a constructive position and argue with you

in the Duma (the lower house of Russia's parliament) and so on. We are ready to fight for

responsible posts in government and

so on. Only, excuse me, of course this is not

your fault, certainly, but your political

leader, Vladimir Putin,

jails me, jailed my brother, and our

political history is simply

a story of constant court cases—this one got

15 days in jail, that one got

several years, and so on. And you're telling me that you

are the one doing things while I

do nothing? I am ready to do the work

just step aside already, please

hold honest elections, and I am sure that in

the next cycle of fair elections, other

people will be doing the work, while you may

be the one criticizing. What exactly can be

done? Yes, I'll add this now—it is possible

Please, you have three minutes to speak

Anatoly Chubais can do something extremely important

something truly crucial. Anatoly

Chubais—that is, people who are very fond of

and when, for example, today Vladimir Putin

declares that foreign companies

are luring people with grants, supposedly somewhere out there in

schools, as he put it, 'combing through' our

Russian children, putting them on grants, and then

taking them abroad—Anatoly Chubais, as

someone interested in the development

of science and education, should say:

'Enough. I don't want to hear this garbage anymore'

'I want this sort of thing to stop'

'I want the country to function normally'

A brief reply from you, if you have one

but first, a few words

from Anatoly Chubais in response to Navalny, and then we

will move on to questions from the audience. Please

Yes, and then a brief response to Alexei Navalny's words

Chubais's brief reply: first of all, I

well... all right...

I fully understand everything you have had

to go through. Well, that is how Russian

life is устроена: some people are jailed, others are blown up

it depends on what someone prefers, in that

sense. Here we simply need, as it were, to return

to reality, you understand—and reality means

You want to drag me into politics.

I definitely won’t go into that field. I know that many people

want me to.

On the one hand, on the other hand, I’ll say this:

I’ve been working in the practical sphere

for 25 years. The place you’re heading, Alexei Alexeyevich,

I come from there. I know very well how things

are organized there, believe me, and I understand very well

how it works and how it doesn’t work.

It just doesn’t interest me. I don’t want

to do that. What interests me is not some fantastical

idea, but a project called Rosnano.

I’ve devoted my whole life

to it, unlike all the other projects.

A project of this substance, one that

really moves the country forward—I

truly believe that. I have never had

a more interesting project in my life. It is the most interesting one, and I

will keep working on it even if you

think I’m Putin’s lackey, that I’m

feeding off financial flows,

running some sham office for

embezzlement and so on. Even so,

I will keep doing it, because I believe

it advances the country no less

than—at the very least—what

you are doing, although I respect

your work. Thank you very much. We’re now going to take a short break for

a brief commercial, and then we’ll

return to the studio with questions from

our viewers. Stay with us.

[music]

Direct Conversation

This is *Direct Conversation*. I’m Ksenia Sobchak, and we

are continuing our discussion—

our meeting between Alexei Navalny

and Anatoly Chubais. We are now in

the third round, and now we’ll take questions from

social media, from viewers. We’ve collected them,

they are all now on the website, where they can be

viewed, and we selected what, in my

opinion, are the most interesting ones. The first question in

this round will be for Alexei Navalny.

So, a question from a user:

“Skolkovo is hard to understand, as are RVC (Russian Venture Company), the Internet Initiatives Development Fund, and others.

Why have you fixated on Rosnano?

Why not the others?”

I look into such a large

number of companies that it would be hard, I think,

to accuse me of focusing only on one. Anatoly Borisovich,

I’ve written probably twenty times more harsh posts about Skolkovo

than about

Rosnano. And indeed, compared with Rosnano,

Skolkovo is even worse—in fact,

several of these institutions are simply monstrous, terrible.

In that sense, I criticize all of these companies.

It’s just that

Rosnano received the most money.

Rosnano got an enormous amount

of money, and its activities are much harder

to conceal, and that is why this problem exists.

The problem—or rather, the peculiarity

of Rosnano’s work—is that if some

plant fails or some project collapses,

that failure can’t be hidden. And perhaps that is why, of course,

Rosnano takes all the blows. But

it is taking them for a reason:

it received more money than anyone else.

Please wrap up your answer. You have two minutes,

and may use them as you see fit.

Then the second question is for

Anatoly Borisovich Chubais, from a user:

“In 2011, you showed the president a tablet that

was supposed to replace textbooks.

What became of that project,

and what was developed at Rosnano?”

Yes, thank you for the question. Still, I would like

to say a couple of words about Skolkovo, even though

they may not hear me, in order to defend my colleagues.

You see, Arsen...

I already mentioned that Rosnano and Skolkovo are at different

stages. Skolkovo is at a much earlier stage.

Yes, a more preliminary stage. We are at

the stage of building factories. Whether it works out or not,

it is harder for us to hide, and we are not

really trying to. If something works, we say

it works; if it doesn’t, we say

it doesn’t. Skolkovo, however,

being at a much earlier stage,

with things like Skoltech (the Skolkovo Institute of Science and Technology), they

of course cannot demonstrate factories or

finished products. Objectively, they cannot,

and that doesn’t mean they are bad. It’s just that when

you unleash your criticism,

you should understand at least a little of the professional

side of it. If you ask me

about patents or about

fundamental science, that would be wrong. I am responsible for

factories. Ask me about failed factories.

Asking them about factories would be wrong; they should be asked

about patents and science.

If you frame it that way, then things become clearer.

As for the answer to your question,

this is one example of projects

that seemed to have failed. We

really were unable to make a tablet

that could succeed on the market. We did make it, it works, and even now

it would simply have been impossible to compete with the iPad.

The timing coincided in such a way that it was impossible. But

did you keep the project? We preserved

the technology. In fact, I brought something with me.

As of today, the first

commercial product has appeared: a second

screen, a second screen on a phone. If

someone here takes your picture and you send it to me,

you will appear here on this second screen.

YotaPhone received exactly these kinds of screens from us under contract.

These very screens. This is an entry into

the commercial sphere of flexible electronics.

And flexible electronics, from the point of view

of most experts, is

the basis for a huge breakthrough in wearable

electronic gadgets. So we believe that

this project is now right at the launch stage.

Like a rocket, it is genuinely capable of taking off

in the near future. Yes, this is our second

screen, right here. Thank you. I’ll answer briefly.

And I apologize for taking up the time.

As you comment from the audience, you’re asking from over there, well—

you’re asking them one thing, and asking me

something else. It should be the other way around: I

am asking, as a taxpayer, from the point

of view of common sense. Excuse me, but

the fact is, you already represent the state—you

are a state corporation, part of this very

state capitalism, all of you. And I believe

you did it wrong. I believe

that the development of nanotechnology, as it

was in Israel, as it was in the United States, as

it was in Japan, is connected with

first and foremost investing in

fundamental science and applied

research. And therefore, whatever it is that

you’re doing there—I’m asking all of you,

because all of you are the state.

You all have flashing beacons on

your roofs, so I’m addressing all of you.

You’re simply taking up too much time.

I have to note, Anatoly Borisovich (patronymic-based form of address), this could go on

forever. So let’s move on to

the next question from one of our viewers

on social media. Daniil Averin, a user,

asks you: if as a result of

your actions Chubais is removed from

his post, will you be satisfied? I will be

satisfied if, as a result of my

activity, Rosnano becomes more

transparent, is reformed, changes

the structure of its spending, when it

invests in scientists—[applause]

clap your hands if you like—but I will be

satisfied. Chubais can decide for himself where he

should be. I will be satisfied when a personnel

decision is made.

It’s true, Anatoly Borisovich said

a remarkable thing: “Well, Alexei,

I left politics, and so now I

am doing what I like at Rosnano.”

And excuse me, that sort of thing does not satisfy me.

You left politics?

People leave politics when they retire. Otherwise,

you’re simply inventing for yourselves these

comfortable positions. Maybe in those

comfortable positions you are doing good

things, but in a normal society that is not how it

is done. I want Rosnano to be headed

perhaps by a scientist,

someone who works in nanotechnology,

someone who has proven himself,

and as for these so-called effective managers

and administrators—I don’t want to see them anymore.

These endless representatives

of the St. Petersburg team (a reference to officials tied to Putin’s St. Petersburg circle), who can

apparently run everything in the country—I have no

specific vendetta against Chubais.

I agree that against the backdrop of the monstrous

state corporations, Rosnano does not look

so bad. I completely agree with that, and I

agree that perhaps some people at

Rosnano, and specifically those

being discussed, may feel offended.

“Alexei, but look at what’s happening at

Gazprom or Rosneft—why are you picking on us?”

But that does not justify them. So I

will go after them too—Sechin and everyone else.

So whatever happens there

with their resignations is a decision for them

and for the people who appointed them. I

am simply expressing my opinion.

Anatoly Borysych (colloquial form of Anatoly Borisovich), you will have a chance

to respond, and Alexei, to answer our

viewer’s question. I’ll read it out right away.

It is from user Roga Simpson: what

share of your personal savings do you

invest in startups?

Second point: Alexei Navalny said that Rosnano

is not as bad as all the other

state corporations.

We’re no longer a state corporation.

I have achieved a fantastic transformation.

Compare the two—just a few words

on your question.

I want to remind you that each

state corporation has its own role. Well, I don’t know—

it’s like different animals in nature:

there is a tiger and a hare, there is a wolf; they have

different roles in nature. Likewise, in the innovation

ecosystem there are different tasks. You shouldn’t

demand factories from Skolkovo (Russia’s innovation hub), and you shouldn’t demand from

us what is required of another institution. Transparency should be demanded,

and criticism is normal. By the way, I was told

that I supposedly said people should stop

criticizing me. I definitely did not say that.

I definitely did not say that. More than that, I believe

that in this sense you are performing

the right function. I would just like you

to do it more professionally, more

substantively. I am certainly not in favor of

shutting Navalny up, even if he

were to stop—that is definitely not me, in any sense.

Now a direct answer to the question that

was asked, about the transformations themselves

that Alexei N. is talking about.

We have actually gone down a rather difficult

path: from a state corporation, through a joint-stock

company, to a structure that

is called a family of private equity

funds, which is what we are becoming in

accordance with our strategy. This

year, Rosnano’s management company will not

belong to the state anymore.

The fund itself will remain under state ownership further on,

because it really consists of enormous

state money. But the management

company, being a purely managerial company,

should be acquired

by the partners, including me. I must

take money out of my own pocket, put it down, and

buy a stake in the management company—or rather,

I am expected to; this is what is being proposed to me.

It is in line with the strategy. I definitely want to

do it, and I want our managers

to take money out of their own pockets and buy

stakes in the management company, and thus

participate in the investments with their personal

money. That is what we have now come to.

The only interesting thing here is that this simply cannot be justified.

But not in

You can't do it this way: you cannot simultaneously be both

a government official at the same time and not

This is a classic conflict of interest.

Listen, I wasn't interrupting you. This is

simply a key point.

Again, this industry was not invented

this morning; it has existed for roughly 40 years, and

it has its own rules. One of those rules

is that management is separated from

the investor. The management company brings together

investors—LPs, so-called limited partners.

Among them there may be both state-owned

companies, sovereign funds, and pension funds,

down into

as well as private money. The essence of the task

of the management company is to raise these

investments. At the same time, the management company

is always, in every country in the world,

private. That's a law of the system. It's just that you

are not very familiar with this, though he

understands it perfectly.

Alexei will also have a chance

to respond to your question, and you can also

make your own remarks as well. So, they

from Kirov are asking Alexei Navalny a question:

What would you do with Rusnano's money? But

apparently they mean budget funds—public money.

Rusnano should invest money

where it will produce results, in the areas that

will drive the development of nanotechnology. We should

use the experience that has been gained

around the world; there is no need to reinvent the wheel.

It simply should follow the path taken by

the countries that have achieved

the greatest success.

Japan, the United States, the United Kingdom, and now China.

Funding for fundamental science and

applied research at an early stage of

development—that is where this money should go.

Let there be more of it; that would be exactly appropriate.

And to continue—Boris says to me

that this should not exist in our system.

We are different beasts.

That is why I am standing here—because you

have created

a monstrous freak: an elephant with

giraffe legs, plus wings, and all of you

keep whipping this elephant with a lash, saying, 'Fly,

fly,' but it does not fly. As a result, your money is wasted.

Nothing works, and it will not fly.

Boris, because this is exactly what I

started with: your system of state

capitalism is ugly and wrong, and

if you also bring this into

this monstrous thing—you just said that your

managers

will also invest their personal money in your projects—

well of course, then if

they are investing personal money, then

that means they will inflate the capitalization

of the projects. This is a classic conflict

of interest; this is where corruption begins.

I hope that never happens.

Understood, thank you very much. The next question

is for Anatoly Chubais, with an opportunity

to comment on what Navalny said.

Denis Livanov asks: Have

managers been held accountable for unsuccessful projects?

Managers exactly... several criminal

cases have been opened as a result of these...

The question is completely clear. Specifically, I

have already said before—although Alexei also

naturally used our own self-criticism—

that at a certain point in time

while transforming the company, we replaced 60 percent

of the management team, and this happened precisely at

the point when we realized that at this

stage we needed to shift toward

a classic business model, including

the privatization of the company.

When things are edited together with Alexei's remarks, well,

believe me, I don't know what words to use.

For specialists, these are elementary basics.

The innovation economy has its own

laws; they differ from the laws of the ordinary

economy. Proper venture industry

is built in its own way.

In this sense, in the innovation economy

there are early stages, middle stages,

and final stages. What is done at the first

stages is not done at the later ones, and one should not

demand it.

And there is no need to invent wings for it.

They do not exist where there should be early stages.

If we fail there early on, we will not succeed at the next

stage either.

Exactly the same way the structure is properly arranged

in any industry. But this is simply a basic

thing that, unfortunately, very few people in the country

know. That is true. In that sense,

it is even fair to make claims against me,

but believe me, this is how it is structured:

general partner management companies are required

to invest from 1 to 2 percent

alongside the major investors

they attract, using their own personal

money. These are mandatory investor requirements.

The share of money that you have invested

from your own wealth, without which

investors will not give you any money.

That is how these tasks are solved; this is not a conflict

of interest. Your understanding is about

25 years out of date in this field; it

has changed a great deal over that time, and

today we will do everything possible to

fully, despite your position,

support the creation of a Russian

industry in this sphere, on the basis of

the law that we worked on together,

called the law on investment partnerships, and

the framework we created—the first in Russia—for

private equity funds in Russian

conditions, which now do exist in our country after all.

So how many criminal cases do we have?

As of today, out of the six

existing criminal cases connected with this...

or otherwise by the activities of Company 4

initiated by us, and we will pursue

results despite the obvious

resistance we are facing

Thank you. A question for Alexei Navalny from

Nikolai in Orissa: there is a lot of

talk that Russia has long since

fallen hopelessly behind the West. Has it become

a worthwhile project at all?

First, a brief comment.

Boris, well, actually, this is 2015; there is no need

to speak to me and everyone else

as if

you were talking to some minister

in the government or to deputies who

in our system understand nothing and can

be fed any line. No, that is not how it works.

When I tell you about my

vision, it also completely

coincides with the view, for example, of the Russian

School of Economics, and before coming here I

read their extensive proposals; you know them too,

on improving

the institutions of innovative development. They

say the same thing: you should have

patents every year, Anatoly Borisovich.

Actually, I would understand

your condescending attitude if

someone told me, 'Alexei, we invested 240'

but earned a great deal.

But so far I see that the biggest projects,

frankly speaking, have failed. I see losses, and

in fact I do not have the slightest

reason to suppose that these

funny little things on the phone will

suddenly take off tomorrow. Your previous, previous

track record—sorry, but that is what I am relying on

for now—suggests that everything has been unsuccessful.

So there is no need to smile

condescendingly, please. As for

lagging behind, particularly in nanotechnology,

let us look at something very specific.

Let us see how many patents

were registered in 2014

in the field of nanotechnology in the United States, where

everyone strives to register them,

patents. So: American patents, 13

thousand; Japanese patents, 500; Chinese

patents, 30; Russian ones—how many do you think?

How many? Sixteen. Sixteen in total. That speaks to

a truly colossal

failure and a monstrous lag. This

monstrous gap is due to the fact that

money is being invested in the wrong places. Once again, I

say that Anatoly Borisovich should not be building factories,

whether good ones or questionable ones,

but investing in fundamental

research. And we need to develop

the market and infrastructure as a whole, because

without that nothing will work. But if you

know the figures for the flight of foreign

capital, you know the figures for how many

scientists are leaving Russia, and so on—without

addressing that, nothing will work. You refer

to Israel's experience. Something worked out there because

in the 1990s, 2 million

Soviet Jews emigrated there, of whom 8,000

were engineers, and those people

created innovation. You created the conditions there, while here

the authorities have driven everyone away. Thank you, Alexei. I

think that

Anatoly Borisovich is eager

to comment on

the School of Economics, but in addition

to that, a question from Elena Vasilyeva:

Navalny's investigations into

efficiency and corruption in

state corporations are important for society.

If he is ultimately imprisoned for this, will you come out

in his support? I hope it will not come to that.

That is being considered in this context.

I agree, I will answer the question. Give me

a moment. And look, I know very well

the text from the School of Economics

because it directly concerns us.

Well, I do not know whether to argue with you or

the opposite.

Take my word for it: there is no proposal there

to urgently demand patents. Once

again, that is our function.

Moreover, besides those obvious

arguments I have already mentioned, there are

other arguments. The point is that the funds

given to us from the budget have been spent

properly.

If we were suddenly to follow your advice,

which we should not do, they would become a one-time

expense. We are doing something else: we

are creating enterprises and businesses that,

as they develop and reproduce demand, annually

increase the volume of funding for science.

I gave you the figure: 7 billion

in 2015, in non-budgetary

business money in our projects. I know from all

our figures that this number will grow

two- to threefold over the next three to four years, and

that is a self-reproducing volume

of science funding, which is far more

important. You are talking about what

is happening with emigration, including

from science, which for me is an extremely

serious problem. It truly is a disaster for

the country. In that sense, by creating

40,000 jobs so far, of which

20,000 are highly skilled

positions,

unique jobs for which we specially

provided educational training, and

these people, who otherwise would essentially not

have had a place, have as a result found themselves

needed in their own country. Does that not make

an important contribution? And if we go further

into your area, we sincerely expect that

people of a different caliber are those for whom

it is not just an innovative economy, but one in which

the very highest professional

competence and intensive contact with

the best in the world, wherever it may be,

developing technologies means that

these people, in the end, they

what affects the social structure is the creation

of something that is categorically lacking

in the country, I think, and you will agree with me

of demand for democracy. We are not simply building a factory

— look further, look

deeper, look at the consequences for

politics, and you will understand: the situation

is not black and white; it is far more

complex. My support for democracy is enormous, but I

see that the authorities are simply

dispersing people, and over the seven years of existence

of Rusnano, while people are scattering because of this

Ali Racing

it is back from— you will now be

is it possible— I still want, for

our viewers, to get an answer, that is:

will you go out into the street for Navalny next

time, yes or no? No, no, no, no — just like that.

So, you will be the next to criticize

Dimagu— you say— next question.

Alexei Navalny, this is the last one for you

question in this round, from Fide Sumki, but he

asks you: do you have the nerve to join the board

of directors of Rusnano if Chubais nominates

you? Well, I’m not afraid of that at all.

And I would also go out in support of Anatoly Boris

if they were to imprison him unjustly, just as

I would for any other person — Anatoly

Borisovich, Gennady Petrovich, or Ivan

Ivanovich. I have gone out for anyone and I will

continue to do so if someone is being imprisoned unjustly.

Probably in

this lies our key political

disagreement. As for the board

of directors, I was on the board of directors

of Aeroflot, which is much larger than

Rusnano. I believe I worked there conscientiously

on behalf of the shareholders, and for example I

tried to be nominated to the board

of directors of Sberbank. This is my

professional activity: I try

to get onto boards of directors in order to

work on improving transparency

in companies, and in that sense I am ready to work in any

company, although of course

I think it is unlikely that anyone at Rus

would really like that idea. I’m not pushing myself on anyone — you

invited me, by the way.

In precisely that capacity, I would easily

be invited as a member. I already know that he

worked professionally in the capacity of

a minority shareholder — aggressive, tenacious,

persistent. That is exactly what the eyes and nose

so lower— more— hurray— departure

but we do this— those who rose up— nothing

has been achieved. Management does not nominate

directors; it nominates its own people, unfortunately.

That will not work. Returning to

the existing points, I must

clarify my position as well. The question is important.

I definitely will not change my position, but it is important for me

that I be understood as well in this

sense, in what I am saying. Generally speaking, I

have, as it happened, gone out into the street both

in August 1991 and on October 3–4 (during Russia’s 1993 constitutional crisis).

I believe that every step must

first answer for the consequences that follow it

once it is taken. In our country, Russian

reality, I think, and Alexei will agree,

Russia will only agree with the fact that

today, for us, business — especially when it involves

state money — and politics do not

mix. For myself, personally,

there is a simple, direct question: I must

choose one of the two.

My answer, guys, is yes: for 25 years I was engaged in

I was engaged in it before many of ours even appeared on

the political scene. And after that I

believe that, bluntly and unapologetically, I have

the right to choose.

Time is up. Alexei Navalny,

got worked up, but I think that directly

the taxpayer’s question toward Rusnano

is such a traditional line of attack. I think that

we will now ask a question— we will ask

and give less time for the answer, if you do not

mind. That would be fair.

Borisych, this question is also the last one for you, from

a user, Flot as a target roof

but you spoke about building

a globally competitive

Russian industry

in nanotechnology. Why, in that case,

is the drug Kagocel, which you are so

proud of,

not on the global market, not even on the list?

I have heard this objection many times, including

from the closest members of the team

around Alexei. But, guys, here is the thing:

in the entire history of Russian

pharmaceuticals,

there are two formulas developed in

Russia by Russian scientists that

have now reached the stage of clinical

trials in the U.S. — one for cancer, one for

something else. Two formulas out of two

formulas.

No, they are not produced there and have not reached the market

yet; they are at the clinical stage. And clinical development in

real life is six to seven years at a minimum. Of those

formulas, at least one belongs to our company,

the other does not, but we are related to it in

that sense. Kagocel,

is a fantastic breakthrough on the Russian

market: its share grew from one and a half percent to

30 percent, beating competitors under conditions

which, by the way, you quite recently

discussed with Vadim— with the professor

who created this innovative

Russian medicine. It will definitely go into

clinical trials abroad and will definitely enter

foreign markets.

But time is short, and the people

who prepared my part on both

medical technologies at Rusnano will not forgive me if I

go into that in detail right now.

Anton Borisovich, I would like to... well, I’m not sure, but...

a large part of the scientific community already

to strongly recommend to you

that you somehow sort out your

biomedical project, because when

Kagocel is a sham, at least so far

there have been no publications about it in serious

medical journals, and there have been no trials on

humans; it has not undergone them.

Boris says that for seven years books

nonsense... you won’t be able to fool anyone if you, if

you won’t be able to deceive people. That’s not me saying it,

that’s the truth, and I can state responsibly

that we have carefully

studied this and can assert that in

serious international medical journals

there are no publications whatsoever

about your unique medicines. If they were not

unique and in demand

then of course such publications would exist. There are almost

no publications, almost no patents. Your

biomedical segment is, for now,

a grand-scale... this is Arbidol number two (a controversial Russian antiviral drug), this is

this astonishing medicine, Kagocel

was included here in the list of essential

medicines.

And the World Health Organization

does not recognize it. I believe this is already

something bordering on criminality,

something criminal, and therefore Rusnano is obliged

to publicly show—not to me, but to doctors and biologists—

where these trials are,

where these scientific articles are, where these

tested medicines are. All right, let’s

since everyone agrees, I would give

the floor first. In Russia

there is an established procedure

for preclinical and clinical trials. I

already said that the clinical stage usually takes

five years, sometimes seven; preclinical is four

years. So this entire cycle, from the first to

the last stage, including clinical

trials consisting of three phases, each

with its own set of requirements from beginning to

end, was completed by Kagocel. I am ready to personally

hand over the full set of documents, without which

it simply could never have made it into

practical use. Please, for heaven’s sake,

for heaven’s sake. That’s first. Second, what you are

confusing

is that you are confusing the requirement for having

approval in foreign jurisdictions with

the Russian process for drug production. There is no, no

such blanket rule; no one has ever in their life

ever, in any requirement, ever

in clinical or preclinical practice, imposed

a requirement for publications. What is required

is testing on patients, testing

for safety, testing for

efficacy, testing on more than 100

people before...

...

Everything has to be... you are interrupting. In that sense,

I assure you that, first, it passed through all

stages; second, the requirement for publications

is made up. You keep repeating it without really

getting into the substance of the matter. And finally, the most

important point.

In general, I already mentioned that

the Russian pharmaceutical industry today is

a fairly competitive sector. If you had

looked not only at Wikipedia, where

all this is written, but gone further, you

would also recall that it has a whole

set of monstrous alleged consequences, ranging from

male impotence to female

infertility, which are elements of

the dishonest tactics you know well enough.

You live in your political

sphere; we have this kind of struggle too, and it is not

honest. Do not side with those

who do this dishonestly. Believe me,

in this field, both clinical trials and

a medicinal product on the market

have competitively proven themselves as something

else entirely, and to drag its author through the mud like this

is certainly unfair.

The clinical trials did take place, so that people...

Thank you. We’ll break now for commercials

for just a few minutes, and then we will have

the final part, the final

round, when each of you will have

the opportunity to make your closing

Thank you. *Direct Conversation* continues, and

the direct conversation between Alexei

Navalny and Anatoly Chubais continues, and we

are moving to the final round. Now each of

you will have three minutes to

speak based on everything

you heard from your opponent today

and draw some kind of conclusion

from today’s conversation.

We’ll start with Anatoly. Yes, let’s try this.

You know, as this conversation went on,

I’m really proceeding from what was

stated by you at the beginning.

And if we remove the emotions, the essence

of the difference in our positions, as I understood it,

was basically this: your position is that everything has failed,

nothing has been done, the money has been spent. Well, I

won’t even go into the insulting part

of your remarks. My position is this:

we have made mistakes; many of the criticisms were on target

and we responded to them.

If I understand correctly, in your original remarks

you reacted to my statement that we had made

certain mistakes. So what were those mistakes, and how

did we correct them, both before and now? And

going forward, we are not going to close our eyes to them.

For me, that was the key difference. As a result of

this conversation, I am generally satisfied: I heard

a different position. Really, the main thing

I wanted to get across to you is that this kind of

black-and-white picture is the wrong way

to portray things. The world is far more

diverse, and our work is far

more varied as well. And in that sense, when you

ask what is inside the black box, there you have it.

black boxes

a collection of complaints, before which it

nobly chose not to take advantage of it, embracing—damn it

things as gifts for you, and these gifts, they

essentially, it simply shows our

work in all its aspects, including the negative ones

and the positive ones as well. Here, you mentioned the Kremlin, not

to mention the one that did not receive it

it really did not work out, but you do want

to see it, and you should—here it is, with silicon

which we produced, but to market-ready

product we were unable to bring it—that is our

mistake, we acknowledge it, and that is indeed true

just like the return from the aforementioned

in total amounted to up to 1.4 billion

million, which for some reason you forgot to mention, but let us not

get carried away with this here

the product you mentioned, which

is pointless, which you absolutely do not

believe in—but that is your right, whether to believe in it

or not to believe in it, just as it is my right to

give it to you. I am giving it to you, especially since

this product literally has our own

Rostov image

picture. If Navalny walks around with

such a background, it seems to me this will be very

useful and will not hurt anyone

and finally, you quite rightly

speak about the fact that there must be products

that are—it's time for you, I sincerely

believe that we in fact already have a product of this kind

I have already mentioned it

I believe this is something that can, without any

exaggeration, become Russia's Gazprom

of the 21st century. It is precisely the work

of Novosibirsk scientists, work that

no one else in the world has done, and not simply in terms of

producing carbon nanotubes

of which there are many in the world—those exist—but this is work

to manufacture, on their basis,

modern carbon fiber composites with parameters

roughly 40 percent higher

than anything else available anywhere on Earth

work on producing modern

plastics for the automotive industry

that are electrically conductive, which greatly simplifies

this coating; work on producing

a transparent electrode, and this transparent

electrode became transparent thanks to the fact

that it contains carbon nanotubes; work

on producing elastomers, that is,

electrically conductive rubber

I insist that we are talking about

a project on the scale of a future Russian

Gazprom, and you, Aleksandrovich, should monitor and

verify what we achieve, what they achieve

they will receive. I am handing all of this over to you in full

for you to inspect

we are carrying out our obligations on a large

hotel—Boris, a suitcase, and all sorts of things

please, I say—a sweaty politician

Alekseich, you must check it, I need to

leave it so that the camera can show that

there is no money there. I will not talk about nanotechnology

and by the way, how can these rubber items and so on

be used specifically, Alexei

how can carbon nanotubes be used? Very

well, perhaps they should be tested not in Ukraine or

monofilament thread—they are a little inconvenient

I feel awkward, I have no gifts, I can

of course—they are of nanoscale size

so we simply cannot see them, but in the course of

the discussion today, I believe that

it is excellent and very useful that it

took place. I still stand by my

positions and maintain that the company Rosnano

in its current form has been structured

incorrectly; it is not viable

in full accordance with your advice

from 2006, and unfortunately it does not really

contribute to the development of nanotechnology

despite the fact that, of course, there are some

certain successes there. I believe

that it would be wonderful if

perhaps this discussion somehow shifted

the very paradigm of nanotechnology development

Rosnano toward the idea that, after all,

what needs to be funded first and foremost are

fundamental science and

without patents, without publications, without science

there will be no practical applications; there will be no

wonderful cases, no carbon

nanotubes—there will be nothing without scientists

this is important to understand. Nevertheless, I believe that

the main thing I want

to convey once again and repeat is that

nanotechnology, like any technology in

Russia, can develop

Russia has all the prerequisites for this: people

are there, educational institutions are there

we have everything we need in order to

develop. But for there to be

breakthroughs in specific fields

for this new

Gazprom to emerge, one must not allow the old

Gazprom—this generalized

state corporation—to devour the whole country. In order

for Russia to develop, for

nanotechnology to develop, we need proper

investment, both Russian and foreign

a proper judicial system

political competition

free media. I apologize for saying

such perhaps naive things, but

they are obvious, plain to see, and yet

it seems to me they need to be said constantly

it is impossible simply by some kind of

outdated state-corporation methods

to develop the most advanced scientific fields

it is simply wasted effort, no matter how much

money you take and no matter how huge a syringe you use to inject it

into some particular organ

in the body—it will not grow, nor will it

improve overall. What needs improvement is

the infrastructure, worn-out as it is, including

scientific infrastructure. We need to make it so

that instead of talking about a catastrophe—

that scientists are leaving—you would talk about how they are coming

I have five applicants lined up for every one position,

sending in their résumés.

That’s what one should aspire to. I understand

that this is not only your question, but also

your question. Anton, Boris, don’t you want to go

into politics? You understand that if you do,

you’ll never really leave it again. You’ve already left—

or rather, you remain in it.

That is exactly why you are standing in this position.

Neither Sechin, nor Miller, nor Chemezov—none of them

stands in this place, because you are

a politician. And I believe, and insist,

that you should use your leadership role for

a certain part of society, which unquestionably

exists, in order to

promote the right ideas. They simply

show wonderful souvenirs from PACE (the Parliamentary Assembly of the Council of Europe).

All right then, we’ve come right up

to the end. Right now I’m ready to launch

a vote on the outcome of this conversation and

ask the question that I will also ask

our viewers: namely, did this conversation work out

or not? Yes or no. Send us your

opinions and your answers on our website; we

will sum up the results in the evening news

broadcast. And the same question: did the conversation work out?

Did you understand each other’s positions?

Did you hear one another? From my

point of view, it definitely did. I want

once again to thank TV Rain (Dozhd TV channel),

and Anatoly Borisovich, for coming. Let me add

that these were extraordinary debates.

We have seen nothing like this before, and we can see

that the heads of state corporations simply

hide from journalists. I make

well-founded accusations of embezzlement

of billions, and if people hide and comment

to no one, while Chubais came and

is speaking, because I criticize

the company as a whole. I think this is very

important, and it would be good if this model of behavior

were adopted by other heads

of state corporations.

Therefore, I certainly consider this

conversation very important. Thank you very much. And

now, Boris Zimin—unfortunately,

I’m forced to return to nanotechnology. I

really believe that over the past

years in this country,

the culture of substantive discussion

through the efforts of various bloodthirsty

Solovyovs (a reference to pro-Kremlin TV host Vladimir Solovyov),

has been practically destroyed. Those are not discussions,

and this—

this is anything but

a substantive discussion. In that sense,

the fact that TV Rain proposed such an idea is

something I absolutely agreed to.

It seems absolutely right to me. It seems to me

that we really need to try somehow to create a standard here—

not in the mode of “you’re stupid”—“no, you’re

stupid”—“no, you stole”—“no, you stole,” but

to make an attempt to focus a little more on substance.

And in that sense, I think today, overall, it

worked, although perhaps some people

will be disappointed—they were expecting a fistfight and shouting.

And there are places where they were expecting a fistfight

and shouting. It didn’t happen, so they’ll have

to put up with it.

I am absolutely in solidarity on this point

with that position, because it seems to me

that it is indeed very important for this

format of direct conversation on TV Rain

to continue—that it be a platform for

a calm, balanced conversation

that will set entirely new

standards for discussions like this. Therefore,

thank you very much. This is a rare

opportunity to unite rather than divide

opponents. Thank you very much indeed.

And I want to remind our

viewers that tomorrow—a brief plug—at

20:00, watch an unprecedented interview with

businessman Mr. Pugachev

on TV

Rain, in the program *Sobchak Live*.

[music]