Moscow, December 10, 1998

TITLE: PRESS CONFERENCE WITH YEGOR GAIDAR, SERGEI KIRIYENKO, BORIS NEMTSOV, ANATOLY CHUBAIS AND OTHER DEMOCRATIC COALITION ORGANIZING COMMITTEE OFFICIALS (PRESIDENT HOTEL, 14:30, DECEMBER 10, 1998) SOURCE: FEDERAL NEWS SERVICE

Nemtsov: Dear colleagues, the meeting of the Organizing Committee to set up the right-center coalition has just ended. A most important step has been taken on the road to uniting all the right-center forces in our country.

We adopted two very serious documents. The first concerns the organization of our work. We adopted the statute of the Organizing Committee. After a rather lengthy debate we adopted the second document -- a statement. It will be available for publication in a matter of hours after the editorial commission makes the amendments in it for which we had voted. The most important amendment was suggested by Mikhail Mikhailovich Zhvanetsky.

The statute of the Organizing Committee says that a Coordinating Council is being established. It consists of leaders of socio-political parties and movements that have the right to take part in the elections to the State Duma, as well as the heads of the commissions who were elected at the meeting of the Organizing Committee.

Alexander Nikolayevich Yakovlev was unanimously elected head of the commission for political matters of interaction with political parties and public organizations. The commission for organization is headed by Anatoly Borisovich Chubais. The regional commission will be headed by me. The commission for economic matters will work under the leadership of Boris Grigoryevich Fyodorov. The program commission will be headed by Yegor Gaidar.

It was also unanimously decided to include in the Coordinating Council Sergei Vladilenovich Kiriyenko. We also decided that the composition of the Coordinating Council may consist not only of leaders of socio-political parties and movements and heads of commissions but also of personalities who get the support of the Organizing Committee.

So we now have a working body, the Coordinating Council, which, I believe, will quickly get down to work. Somewhat later you will be handed out a press release. And now you are welcome to put your questions.

Q: (Off mike.)

Chubais: Frankly, I have not yet heard such statements. Speaking of my position, it is that our country absolutely needs interaction with international financial institutions. To achieve this interaction both sides must take steps towards each other. The Russian government must make steps in their direction and the international financial institutions must take steps in the direction of Russia.

Q: Sovershenno Sekretno. I have a question to Boris Yefimovich Nemtsov. Specialists say that your newborn movement will have for some time a low rating. But only a year remains before the elections. What are the sources of financing your election campaign? What are the sources for financing your day-to-day activities? You will have to travel, you will have to have offices, security guards and so on.

Nemtsov: We have not discussed these extremely important questions yet. But I do not expect our movement to experience any problems with financing. Simply because we have a huge number of Russian businessmen behind us. There already not hundreds of thousands but millions of entrepreneurs in Russian now. We do not intend to accept money from oligarchic structures and monopolies. We do not want to have any binding obligations to them.

We also believe that our movement will be a popular one, that we will live on membership dues. I do not expect any serious problems to arise.

As to the low rating that you mentioned, public opinion polls point to the opposite. They say that if we stay together, that if we form the election list not bureaucratically but primarily by studying public opinion, then we have very good chances to be the biggest democratic organization in the State Duma.

Indeed, the problem of leadership is a very serious one. But we believe that this problem should be resolved democratically. The list should be headed by the one of us who has the biggest trust of the electorate. The second name should be of the person whose credibility level is high but lower than that of the previous person, and so on.

If lists are thus formed on the federal level and on the regional level, I assure you, we will have very good chances to win a majority in the State Duma.

Q: NTV. Speaking of allies. How do you plan to cooperate with the YABLOKO faction? What can you say about Yavlinsky's statement that the creation of your coalition will split the electorate and you will fail to secure enough votes to get into the Duma? As a result, the interests of many democratic-minded voters will not be represented in the Duma again.

Nemtsov: We are doomed to secure seats in the Duma. We are absolutely open for cooperation, including with YABLOKO. We do not have differences over fundamental issues. We are against the sway of crime and fascism in the country, we are against censorship in the Russian Federation, we want everybody to be in equal conditions, we are for a competitive market economy with uniform rules for everybody.

I think our movement has good possibilities for closer contacts. There are also some obstacles. They can be described as follows -- the political ambitions of certain leaders. Such obstacles do exist. But it seems to me that in the name of Russia's revival these are not the biggest of obstacles, that we will be able to overcome them.

More than that, we agreed today that questions of interaction with other organizations and parties will be in the center of our attention. A special commission has been set up for this purpose. Besides, Sergei Vladilenovich Kiriyenko expressed the desire, and we supported him, to take part in this process. I mean in the talks with all the political parties and movements that are close to us ideologically.

With whom we will not be able to come to terms? With fascist and nationalistic organizations. We are not likely to find a common tongue with communist organizations. Frankly, we do not need that.

As to the rest, we are really open for cooperation and I think that this cooperation will be constructive and fruitful and produce results as we approach the elections.

Q: Otkrytoye Radio. What is the name of your organization? We heard that it is Just Cause. What movements have already joined you? Are you a movement or a bloc? When will you elect your leader?

Nemtsov: We have not discussed the name so far. So far the name is Organizing Committee to set up a right-center coalition, or a coalition of democratic forces. This is not the name that will be written in the election ballots. The question of the name of our organization, of course, is an important one. At a meeting of prominent personalities, prominent cultural figures such questions are not solved. Of course, our movement will have a name. I do not see any particular problems here.

What political parties have taken part? The meeting of the Organizing Committee was attended by representatives of the Party of Constitutional Democrats, the Youth Union of Russia's Democratic Choice, the movement Democratic Russia, the Peasant Party, the Moscow Helsinki Group, the Congress of Intellectuals, the Right Center Youth Association, the All-Russian Association of Privatized and Private Enterprises, the National Collegium of Evaluators, the Russian Guild of Realtors.

Our work was also attended by the governor of Tver oblast Vladimir Ignatyevich Platov. He was unanimously included in the Coordinating Council. The head of the Moscow City Duma Vladimir Mikhailovich Platonov also took part. Also a whole number of mayors of Russian towns. For instance, the mayor of Abakan Bulakin, the mayor of Tambov Ilyin, the mayor of Togliatti Zhilkin, the mayor of Tver Belousov.

Among other participants there were representatives of Kuzbass workers committees and many people who are prominent in culture and the arts. You must have seen them when you entered the hall at 11 this morning.

Q: A question that I wanted to put yesterday but without success. The demonstration staged yesterday by the left-wing forces once again, what do you think about that? Is this just an instinct or are they acting in a calculated way? Was that directed only against you? Can this be described as anti-Semitism? Or are they against modernization of the country?

Chubais: Old love does not rust, as the saying has it. If I am to speak seriously, frankly, nothing of importance had actually happened. You see, all the decisions were adopted and even announced before the Duma session. The session just rubber-stamped what the Central Committee of our Communist Party had decided a day before.

Actually, it was not a coincidence that it had been done a day before today's event. As far as I understand this is traditional Communist wording -- to relieve one of his duties for anti-Soviet activities.

Nemtsov: I am sorry, I did not name the Republican Party among the members of the organizing committee. I am sorry. And also the Forward Russia movement. I am now correcting this mistake. And I also forgot to name the Party of Social Democracy.

Q: We all know that the last straw that made you create the coalition was the murder of Galina Starovoitova. Did you discuss how this could be reflected in the name of your bloc? And when you spoke about prospects, did you take into account the results of elections in St. Petersburg?

Chubais: As Boris Yefimovich has said, we did not discuss the name. We observed a minute of silence in memory of Galina Vasilyevna Starovoitova. But we did not discuss the name.

As for the results of elections in St. Petersburg, I think there are only preliminary results. And they show who has lost. The communists have lost. They have suffered a devastating defeat. The bandits have lost. Almost none of their candidates won in St. Petersburg. We will discuss the final results after the second round.

Q: How can ordinary people join your movement? Where should they turn to and how will this be done?

Chubais: We need a small organizational period to find premises. When this is done, we will immediately use all available information channels to inform regions where and who they should turn to. Give us some time to do this.

Q: What is the correct name your bloc -- a democratic coalition and center-right coalition? And who proposed to delete the words "Our Cause is Rightful" from the text? Or did you have any doubts about this?

Nemtsov: You can name it either way, whichever suits you more. This is as far as the first question is concerned.

On your second question, we voted on whether the phrase "Our Cause is Rightful" should be removed or not. The vote was that it be deleted. That's all. It was a democratic decision.

Q: How are you going to register the coalition technically because only 10 days are left before December 19. Secondly, is Khakamada, who is not here today, with you or not?

Nemtsov: She is just not in Moscow at the moment. As for registration, we do not need to register the bloc by December 19. The thing is that this a bloc of parties and movements which have the right to participate in elections. Under the law, we can form a bloc on the eve of elections.

Q: Not long before this meeting, Yegor Timurovich, you said that there would be no coalitions with those who supported the government. As far as I know Alexander Nikolayevich has supported the government. Perhaps I am wrong. So my question is as follows: have you worked out a single position with the regard to the government? Has this question been solved? Or we will see a new split among the members of this association a week from now?

Gaidar: Dear colleagues, a question of fundamental importance for us now is the question of creating a strong democratic and center-right, you name it, bloc which will defend a set of basic principles -- democracy, private property, fair competition, low taxes, and efficient and economical state. We do not want to put ourselves in the shoes of sectarians and destroy any possibility of cooperation with political forces and movements which share out views.

Yes, I personally -- there is a position of Yegor Timurovich Gaidar of the Democratic Choice of Russia. I personally do not like many of what the government is doing now. As for our collective attitude toward the government and some of its steps, this is what we will have to work out and decide.

As for whether there can be a split over this issue, I do not think so.

Yakovlev: I just want to say that our congress recently adopted a decision to support the government of Primakov. We did not discuss this issue today. And I think that our party will not decide this by the number of ayes or nays. It would be wrong politically.

If we support a certain step by the government, we will support it. If not, we will not support this or any other step. That's all. Does this hamper the consolidation of democratic forces? I do not think so.

Yegor Timurovich has mentioned the fundamental principles on which our agree. I am absolutely agree with these principles.

Q: Why did you decide to create this coalition? And what will be your economic platform?

Kiriyenko: Why did we decide to unite? I have answered this question many times. There has been a question about differing positions. Indeed, perhaps we have many differing positions. Someone offered a very good idea today. I do not remember who it was. He said that unfortunately the existing practice in this country is that if you agree with a person on all 99 points but disagree over one point, you consider him as your biggest enemy. Although it should be the other way round.

Now when the main question is where the country should be going -- whether we preserve the democratic principles of state management and a market economy or we will recoil back to a totalitarian state, state regulation and planned economy, which I do not want and I will do what I can to prevent this. All those who share these two fundamental principles -- what is important for me is not against whom we have united but for what we have united. I have formulated my for. Because all those who were at the meeting and not only them, because for me a coalition does end on those who sit at this table. This was pointed out several times today that we are open to further agreements.

This is a fundamental thing, which was mentioned by Boris Yefimovich and which I mentioned today. I was included in the coordinating committee for my agreement with it. I believe it possible to find a common language and reach an agreement with all those who stick to these fundamental things.

When we are confronted with such a critical choice, we cannot afford to pay more attention to disagreements, although there are so many of them. We cannot afford to pay attention to personal ambitions which also abound. All this has to be put aside and we must find overlapping interests, and not only with those who have come here.

I'd like to stress that our statement says that we are beginning consolidation work. This is very big and hard work. We will face a lot of problems. But we have to do it. We have a year before elections.

Q: Is your association ready to lean on one spiritual idea that will lead you to your victory at elections?

Fyodorov: There is one simple ideas that has brought us together -- freedom. This is a very spiritual idea. Any normal person likes this idea....

Q: Many of those who are sitting in the presidium now can be called victims of the present regime. Has the new movement formulated its attitude toward this regime?

Fyodorov: Does our appearance betray us as victims? If yes, they you are wrong. We are okay.

Nemtsov: We have experience of management, including in critical conditions and in extremely complex situations. I think this is invaluable experience. And although no one has left Bely Dom to the sound of applause, including us, we believe that this experience will help us.

We think it will help us avoid mistakes. Secondly it will help us organize our work better and, more importantly, explain to people what is happening in the country, what was done correctly and what not and ho we are going to live and what we are going to do.

We have to learn to admit our mistakes. We have to learn to make conclusions from mistakes. We have to learn not to make the same mistakes several times. I think we have already learnt all this.

Q: Boris Yefimovich, if you are the right-wing center, can you tell us who belong to right-wing forces? Did you invite Chernomyrdin to your meeting?

And a question for Yegor Timurovich. You named fundamental values which have brought you all together. In principle, Primakov has named them too. He speaks about fair competition, low taxes, etc. Don't you think that many of your complaints are too late and that the government of Primakov has proved by some concrete steps that not everything is hopeless from the point of view a left-wing revenge as it seemed several months ago?

Nemtsov: We are absolutely open to cooperation will all parties and movements. I have already said which parties and movements are closed to us and which are open. In this respect, we are ready for cooperation with the Our Home Is Russia.

What happened today is just the first step. This is not a sectarian organization. The organizing commission is open to new members. We are ready, and this is stated in the regulations, to admit new participants. So this is only the beginning of the process, not its end.

Gaidar: Low taxes mean first of all an efficient state. Because one way or another, but the state exists at the expense of people. A responsible program of tax cuts is also a responsible program of cutting ineffective state expenses and obligations. To my mind, the government of Primakov has so far not presented such a program. Without this, any tax cuts are likely to be short-term and may lead to difficult consequences for the budget.

Nemtsov: As far as tax cuts are concerned, I would like to add one thing. It seems that the reduction of the VAT to 14 percent is the reduction of taxes. But in reality the government has proposed to introduce a new tax, namely the sales tax of 5 percent for all goods and 10 percent of goods covered by excise taxes. If you calculate who the tax base changes in regions, you'll see that it will shrink in all regions except Moscow where it will grow. So we have to take a more serious look at the question of tax cuts. But it is true that the accent has been put on the reduction of the VAT. But the introduction of the sales tax has been hushed up. By the way, it is 5 percent. If you put everything together and given the fact that this tax will be collected unevenly in different regions, the conclusion is obvious -- changes in tax legislation does not ease the tax burden, but will simply create a situation in which Moscow will have more money and provinces will have less money.

Fyodorov: I can add that if tax cuts are made up for by more money printing, as it was done in November when 10 billion rubles were printed, you can understand where it all will lead. We can abolish taxes altogether and start printing money. But this is not an economic policy. This is something strange.

Q: What will be your regional policy? We see the only governor, from the Tver region, here in the presidium. Do you plan to invite other regional leaders to your movement?

Nemtsov: We talked today about the need to invite non-political organizations, primarily the committees of soldiers' mothers, local government organizations, women's non-communist organizations, workers' non-communist committees. We believe that we should not concentrate entirely on interaction with regional leaders.

Most problems, social problems -- delays in the payment of wages, unemployment, absence of an effective motherhood and childhood support programs -- are local government problems. We believe that such a combination of high-profile political leaders and organizations and the zemstvo movement which comes all the way up from the grassroots will make our organization a truly mass, people's organization. This is what we should be seeking to achieve.

A liberal movement in Russia must become a popular movement, because millions of people hope that the state will not prevent them from doing their job and will establish fair rules, that there will be order in the country, not terrorism and lawlessness. And we will be able to make these hopes come true.

Q: Two questions for Sergei Vladilenovich Kiriyenko. You said that you have agreed to be included in the organizing committee of the bloc. Does this mean that you accepted the offer after a good deal of persuasion? And will you be able to register your party, New Force, on time and if not, from which bloc will you run for the Duma?

Kiriyenko: No, it does not mean that there was a good deal of persuasion. That's all as far as the first question is concerned.

As for the registration of the movement New Force, I think we will complete it by the 19th. The purpose, as I have already said, is that we are beginning big and serious work. It is going with difficulty as many of your questions indicate. We do not have here at this table all those whom we would like to see in our bloc.

I think that the main problem is that -- and this is where we often disagree -- I believe that the main task is not to unite leaders. This is a different task. The task is to preserve democratic management principles and a market economy in the country. In order to achieve this, we have to bring together the people who will vote in the next elections. So, these are two absolutely different tasks and they require different approaches.

This is big and painstaking work and it cannot be done just by moving leaders from one table to another.

I identified this task when I spoke about the need to create my own movement. And that's what I am doing now. I will do my best to conclude this work. It is true, though, that it would be best if we could reduce the number of lists to the minimum before elections so that people would not have problems during elections. Ideally we should have one list. This is the ultimate goal. We may not achieve it. It is possible that we will have several lists.

In principle, this depends not on ambitions of the leaders and not on how we shift them around the table, but on one principal factor -- how people will vote? All the rest will have to serve this objective, including ambitions.

Nemtsov: Let's have the last three questions.

Q: My question is for Alexander Nikolayevich Yakovlev. I see that you are the only WWII veteran here. I belong to the generation of Gagarin because we were born in the same year, 1934. You have decided to remove the words "our cause is rightful". Don't you think that this recoil is connected with the memorable words, our cause is rightful and we have defeated a Napoleon in the 1941-1945 war?

Yakovlev: I am very sorry, but Boris Yefimovich has already said that we voted on this. And the majority voted for the removal of these words.

Secondly, this has nothing to do with the Great Patriotic War. The idea was to get rid of slogans. That's all.

Q: I have two questions for Mr. Chubais. Do you think that the government has sidestepped from liberal reforms but the economic reform is continuing? How, do you think, the current crisis can be overcome?

And my second question. What do you think about the idea of Marshall plans for Russia?

Chubais: As for the government's performance and my evaluation of its performance, I think that apart from a dozen program statements and draft programs or priority measures there is one key document by which one can judge the government's performance. This document has a short name -- budget.

If I understand it correctly, the government is approving this document right now. Let's wait and see. This document should answer all questions. Then everything will become clear. It will be clear what will happen to our relations with the IMF and to the government.

There is one thing I understand very clearly. The economic realities are such that the longer the government works, the more responsible policy it carries out, the more liberal it has to become.

At least when I hear first deputy prime minister Maslyukov say that the new budget will set the primary surplus at 2 percent, I understand that they deserve a Chicago award for monetarism.

I do not know whether they will achieve this or not, but it is clear that the government has to apply the toughest Chicago monetarist, anti-people bourgeois principles, whether it likes it or not. Otherwise it will be swept away quite quickly.

Q: My question is for all of you. Just recently you said that the greatest threat to reform comes from nomenclature capitalists. Today you say that this threat comes from communists. My question is, why have you changed the enemy? And in this connection, how are you going to lean on the youth who have no idea of what the total CPSU control is, but who remember August 17 very well?

Gaidar: There is a not very obvious, but very strong coalition of the nomenclature and the CPRF. It is visible at the federal level, in the government. But it has been around in many regions, where they have virtually merged into one, for a long time. I think that the calls for fighting nomenclature capitalism and resisting the CPRF are not mutually exclusive. These are the two sides of the same coin.

Secondly, I understand that there is a certain part of young voters who do not know what communism is. But on the other hand, these young voters have gotten used to a certain set of realities that are part of their existence -- they do not have to go to the local Komsomol committee to get permission to go to Bulgaria, nobody decides for them what books they have to read, they have a choice. When these values are endangered, these young voters are very likely to become extremely active.

Nemtsov: Thank you dear colleagues. Our press conference is over.