TFGG01: RUSSIAN MODERATES' VIEWS ON THE CONFLICT

C O N F I D E N T I A L MOSCOW 002486

SIPDIS

STATE FOR EUR/RUS; NSC FOR MWARLICK

E.O. 12958: DECL: 08/20/2018
TAGS: ECON EINV ETRD PREL PGOV RS
SUBJECT: TFGG01: RUSSIAN MODERATES' VIEWS ON THE CONFLICT
AND WHAT IT MEANS FOR RUSSIA AND U.S.-RUSSIAN RELATIONS

Classified By: Ambassador John R. Beyrle for Reasons 1.5 (b) and (d).

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Summary
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1. (C) In separate meetings August 19 with the Ambassador,
former PM Yegor Gaidar and Igor Yurgens, Director of a think
tank closely tied to President Medvedev, argued that a
reform-oriented Medvedev presidency, with its promise of a
freer Russia, could be a victim of the conflict over South
Ossetia and heightened tensions with the U.S. The two
prominent moderates, while stressing that Russia's people
supported the war, saw Georgian President Saakashvili as
largely to blame. They both insisted it was in Russia's
interest to avoid a rupture in relations with the West and
specifically with the U.S. End Summary.

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Medvedev's Presidency
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2. (C) The Ambassador told both Gaidar and Yurgens that we
had viewed Medvedev's ascension to the presidency and his
interest in global integration as hopeful signs. However,
there was increasing concern in the U.S. about his ability to
effect change. Medvedev's core agenda seemed to include
three items: stepped up anti-corruption efforts, the
modernization of the Russian economy, and new European
security architecture. The last two would be impossible
without Western support and the first would be more
difficult. At the same time, the GOR, especially Foreign
Minister Lavrov, seemed intent on ratcheting up the anti-U.S.
and anti-Western rhetoric.


3. (C) Gaidar reflected on the difficulties when a superior
has taken a subordinate position; "even if they are friends,
there are difficulties and challenges...there are problems."
In conversations with his friends, Gaidar reported that there
was no clear understanding of how this relationship would
work in the future. It was clear to him that Medvedev wanted
to be included as a member of the club of international
powers, but that if he was pushed into a corner and away from
engagement, "it will be dangerous."


4. (C) Yurgens was even more frank. He acknowledged that
Medvedev's agenda needed Western support. However,
Medvedev's position was difficult. He was in effect caught
between the war and the siloviki. Medvedev was well aware
that much of the senior leadership of the military and the
power ministries had backed his rival for the presidency,
Sergey Ivanov. Yurgens said there had been plans to replace
many of these corrupt individuals, who would have been
targeted in anti-corruption drives. However, those plans
were now on hold. While the siloviki may not have engineered
the conflict, they were profiting from it by buttressing
their positions within the government.


5. (C) Yurgens added that Medvedev had won over Russia's
liberals with his speech in Krasnoyarsk and especially with
one sentence: "freedom is better than non-freedom." The
demise of a reform-oriented Medvedev presidency would be the
end of the liberal project in Russia.

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Views on Georgian Conflict, Bilateral Relations
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6. (C) The Ambassador also stressed in both meetings that the
U.S-Russia relationship was crucial for global stability and
our own national interests. We needed to maintain a
dialogue. However, our relations were in a difficult moment.
The U.S. believed Russia had crossed a red line by invading
Georgia proper. Russia's immediate withdrawal from Georgia
was essential to avoid further damage to the relationship and
to Russia's reputation and place in the world. He told both
of his interlocutors that the world could not see that the
withdrawal had begun, despite Medvedev's public
pronouncements.


7. (C) Gaidar agreed that the U.S. and Russia needed to avoid
a rupture. However, he blamed Saakashvili for
misunderstanding U.S. support and for believing he could
resolve the situation through military confrontation. The
Ambassador cautioned against Russian attempts to personalize
the conflict. The former PM then called the situation with
Georgia and in the Caucasus "a nightmare" that needed quick
de-escalation. However, he argued that the next move was up
to the U.S., "Russia has an educated population and an

educated population needs friends," but it would not be
dictated to.


8. (C) Yurgens told the Ambassador that the popular support
for the war was strong right now but that a different
Georgian leader would elicit a far more sympathetic response
from the Russian public, which he added historically tired
quickly of wars. Yurgens said his August 20-22 trip to
Washington was his own idea but had been coordinated with
senior GOR officials, who had assured him that a withdrawal
was underway. Eventual withdrawal, along with French
President Sarkozy's mediation efforts, gave Yurgens hope that
a broader, deeper confrontation with the West could be
avoided. He hoped to return with ideas, which he would share
with senior GOR officials and use as the basis for a paper
for Medvedev.

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Economic and Diplomatic Ramifications for Russia
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9. (C) The Ambassador noted in both meetings that the war and
its aftermath could hurt Russia both politically and
economically. Yurgens responded that he had written an op-ed
the day before for Rossiskaya Gazeta that had outlined an
optimistic and pessimistic view of the conflict's effects on
Russia if relations with the West deteriorated further. The
optimistic view was that Russia's commodity-driven economy
was immune to western pressure and Russia would simply
reorient itself economically and politically toward China.


10. (C) Yurgens said the pessimistic view was that without
Western capital, managerial expertise, and technology Russia
would be unable to modernize its economy. Moreover, China
would be an uncomfortable and expensive ally. The Ambassador
agreed, noting that Russia and the West needed to work
together to manage the rise of China and ensure that it
played by the rules. Yurgens said he believed the Russian
economy would recover from its current jitters, including
rising inflation and a steep decline in its stock markets,
but that longer-term Russia needed modernization, and
therefore the West, to achieve its economic goals.

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Comment
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11. (C) The meetings with these influential moderates
underscored their fears that Western and U.S. efforts to
isolate and punish Russia will play into the hands of the
siloviki and other forces that oppose a more open and
integrated Russia.
BEYRLE