SPIEGEL: Are we wrong in believing that the Russian government is seeking to play a stronger role in the economy once again?
Chubais: I don't like such tendencies. The state is generally a poor owner, but sometimes government involvement makes sense.
SPIEGEL: When?
Chubais: I think the establishment of a government holding company in the aviation industry is a good thing. Gazprom is a national champion. The state cannot pull out of such an energy corporation, even if reforms are necessary. However, it doesn't make economic sense for the state to spend billions of dollars to buy Sibneft, a private oil company, or to increase its stake in car manufacturer AvtoVAZ.
SPIEGEL: Are you saying that more should be privatized?
Chubais: Our government has been unable to reach the goals it set for itself during privatization for years anyway. It is only injecting half of the money that was originally planned into the government's budget. The state manages many businesses very poorly.
SPIEGEL: You are steering UES, the giant electric utility you head today, in precisely the opposite direction. You are privatizing the business and seeking to attract foreign investors.
Chubais: Yes, and that would have been impossible without the support of the government and President Putin.
SPIEGEL: The government and the president are doing precisely the opposite elsewhere.
Chubais: That's true. And perhaps it's the right thing to do. In any event, I don't think that Russia should take the same approach with Gazprom as with the electricity business.
SPIEGEL: Nevertheless, we have trouble understanding why Gazprom owns newspapers and television stations.
Chubais: I agree with you on that.
SPIEGEL: Are you a masochist who is imposing unpopular reforms: privatization, the overhaul of the financial system and now of the electricity sector?
Chubais: We were young when we joined the government, and we were derided as young lads who had read Milton Friedman's textbooks and nothing else. We sat opposite experienced directors. They considered us to be complete idiots and said: If one of you is kicked out of the government and is forced to run only one company, he'll immediately run the business into the ground. This was the same sort of greeting I received from some veterans of our electricity sector: “No reforms. Don't privatize the electricity industry. It will destroy everything.” Now it's become clear that it does work and that the reforms have, in fact, enabled us to attract billions.
Modernizing the Power Grid
SPIEGEL: Your power grid is ailing, due to a lack of investment during the years of crisis. How much money do you need?
Chubais: About $120 billion by 2010. That's the amount needed for modernization. The money must either come from the national budget or private investors. We opted for the latter, and this has proven to be the right approach. We had $2 billion in investments in 2005, followed by $7 billion in 2006. This year we expect more than $20 billion.
SPIEGEL: German electric utility E.On AG is investing about $5 billion. You just sold 70 percent of the OGK-4 company, which operates power plants in many Russian growth regions, to E.ON. What do you expect from the deal?
Chubais: Our goal is to gain strategic investors for the electricity industry. They already include leading private Russian companies like Norilsk Nickel and SUEK (the Siberian Coal and Energy Company). Victor Vexelberg and his company are also interested. Our investors also include some well-known foreign corporations, like the Italian company Enel SpA, Finland's Fortum Oyjand now E.ON. They contribute a modern business culture.
SPIEGEL: Can you imagine Russia selling electricity to Europe someday?
Chubais: Russia offered the European Union a huge project: tying together the power grids in Eastern and Western Europe. It would have created a single market from Siberia to the Atlantic. We did this for more than just commercial reasons. By taking advantage of the different time zones, it would have been more efficient. We would have also improved energy security. President Putin and the then-President of the European Commission, Romano Prodi, approved our proposal. But then everything became bogged down, because the EU took advantage of the opportunity to disconnect the Ukrainian energy network from Russia and tie it in with the European grid.
SPIEGEL: Do you mean to say that Ukraine is a point of contention between Russia and the EU, the great geopolitical prize in the struggle over Europe?
Chubais: One could put it that way. It was a purely political decision on the part of the EU and, for that reason, a completely pointless one from the standpoint of energy. Now an expensive and unnecessary power transport line is being built from Lithuania to Poland. Its sole purpose is to integrate the Baltic states, Lithuania, Latvia and Estonia, into the Western power grid. The issue here is confrontation. And yet everyone would stand to gain more from cooperation. Instead of unifying, they propose a new separation.
SPIEGEL: The Eastern European countries and the Baltics just happen to be afraid of the Russian giant. The political climate between Russia and the EU has also deteriorated.
Chubais: Shortly before stepping down, (former British Prime Minister) Tony Blair called upon British businesses to stop investing in Russia. I don't understand how a man with so much political experience could say such a thing. Incidentally, the British business community didn't listen to him -- it wouldn't have been a good idea.
SPIEGEL: Russia isn't squeamish when it comes to applying pressure to neighbors like Georgia, preferably using energy as a tool.
Chubais: No, in the case of Georgia we did not use the energy supply to apply political pressure. But I do agree with you that our government and our businesspeople sometimes make serious mistakes when dealing with neighbors.
SPIEGEL: The Russians are coming. Is it really happening, and are they coming with full force?
Chubais: Yes, Russia is strong again, especially economically. This means that both sides have to learn. Russia must learn to implement its growing importance in a civilized way. I'm warning the West against making catastrophic geopolitical mistakes. The plan to install a missile defense system in Eastern Europe is pure lunacy. This will take the world back to the days of the Cold War. The risks today are no less serious than they were then.
SPIEGEL: You shouldn't hold all of Europe accountable for the policies of the American president.
Chubais: If the Europeans didn't tacitly accept this American decision, the missile shield would not be viable. The things that could spark a new arms race are not purely based on the business of Mr. Bush. In fact, the Europeans also play an important role. Don't be surprised then, if Russian missiles target Europe once again.
SPIEGEL: Will Russia remain stable in the upcoming months of the parliamentary and presidential election campaign?
Chubais: Yes, and irrespective of what the new president's name will be.
SPIEGEL: Does the appointment of Viktor Zubkov to the post of prime minister mean that the man will also become president next March?
Chubais: It's possible.
SPIEGEL: Mr. Chubais, we thank you for this interview.
Interview conducted by Joachm Preuss and Matthias Schepp.
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