[Weekly Compilation of Presidential Documents Volume 34, Number 36 (Monday, September 7, 1998)]
[Pages 1678-1683]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to Future Russian Leaders in Moscow

September 1, 1998

    Thank you very much. First I'd like to thank Maxim Safonov for that 
fine introduction and for his very encouraging remarks. Rector 
Torpoulov, Minister Primakov, to all the members of the American 
delegation. We have Secretary of State Albright, Secretary of Commerce 
Daley, Secretary of Energy Richardson, National Security Adviser Berger, 
our Ambassador, Jim Collins, and five distinguished Members of the 
United States Congress here: Senator Domenici; Senator Bingaman; 
Representatives Hoyer, King, and Deutsch.
    I think their presence here should speak louder than any words I 
could say that America considers our relationship with Russia to be 
important. It is a relationship of friendship, of mutual responsibility, 
and of commitment to the future. We are all honored to be here today, 
and we thank you for your welcome.
    On this first day of school across both our countries, students are 
resuming their studies, including their study of history. At this 
critical, surely historic, moment, let me start with a few words about 
what I believe the past can teach us as we and, especially, as the 
Russian people face the challenges of the present and the future.
    Two hundred and twenty-two years ago, we Americans declared our 
freedom from the tyranny of King George of England. We set out to govern 
ourselves. The road has not often--or certainly not always--been easy. 
First, we fought a very long war for independence. Then it took more 
than 10 years to devise a Constitution that worked. Then in 1814, we 
went to war with England again. They invaded our Capital City and burned 
the President's house, the White House. Then in 1861, we began our 
bloodiest war ever, a civil war, fought over the conflicts of slavery. 
It almost divided our country forever, but instead we were reunited, and 
we abolished slavery.
    In the 1930's, before World War II, our country sank into an 
enormous depression with 25 percent of our people unemployed and more 
than one-third of our people living in poverty. Well, you know the rest. 
We were allies in World War II, and after World War II we were 
adversaries. But it was a time of great prosperity for the American 
people, even though there were tense and difficult moments in the last 
50 years.
    The larger point I want to make, as Russia goes through this time of 
extreme difficulty, is that over the life of our democracy we have had 
many intense, even bitter, debates about what are the proper relations 
between people of different races or religions or backgrounds, over the 
gap between rich and poor, over crime and punishment, even over war and 
peace. We Americans have fought and argued with each other, as we do 
even today, but we have preserved our freedom by remembering the 
fundamental values enshrined in our Constitution and our Declaration of 
Independence, by continuing to respect the dignity of every man, woman, 
and child, to tolerate those with different ideas and beliefs than our 
own, to demand equality of opportunity, to give everyone a chance to 
make the most of his or her life.
    Russia's great ally in World War II, our President, Franklin 
Roosevelt, said that democracy is a never-ending seeking for better 
things. For Americans, that means, in good times and bad, we seek to 
widen the circle of opportunity, to deepen the meaning of our freedom, 
to build a stronger national community.
    Now, what does all that got to do with Russia in 1998? Your history 
is much longer than ours and so rich with accomplishment, from military 
victories over Napoleon and Hitler to the literary achievements of 
Pushkin, Tolstoy, Chekhov, Pasternak, and so many others, to great 
achievements in art, music,

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dance, medicine, science, space flight. Yet for all your rich, long 
history, it was just 7 years ago that Russia embarked on its own quest 
for democracy, liberty, and free markets--just 7 years ago--a journey 
that is uniquely your own and must be guided by your own vision of 
Russia's democratic destiny.
    Now you are at a critical point on your journey. There are severe 
economic pressures and serious hardships which I discussed in my 
meetings with your leaders this morning. The stakes are enormous. Every 
choice Russia makes today may have consequences for years and years to 
come. Given the facts before you, I have to tell you that I do not 
believe there are any painless solutions, and indeed, an attempt to 
avoid difficult solutions may only prolong and worsen the present 
challenges.
    First, let me make a couple of points. The experience of our country 
over the last several years, and especially in the last 6 years, proves 
that the challenges of the global economy are very great, but so are its 
rewards. The Russian people have met tremendous challenges in the past. 
You can do it here. You can build a prosperous future. You can build 
opportunity and jobs for all the people of this land who are willing to 
work for them if you stand strong and complete, not run from but 
complete the transformation you began 7 years ago.
    The second point I want to make is the rest of the world has a very 
large stake in your success. Today about a quarter of the world's people 
are struggling with economic challenges that are profound--the people of 
your country; the people in Japan, who have had no economic growth for 5 
years--it's still a very wealthy country, but when they don't have any 
growth, it's harder for all other countries that trade with them who 
aren't so wealthy to grow--other countries in Asia. And now we see when 
there are problems in Russia or in Japan or questions about the economy 
of China, you see all across the world--the stock market in Latin 
America drops; you see the last 2 days we've had big drops in the 
American stock market.
    What does that say? Well, among other things, it says, whether we 
like it or not, we must build the future together, because, whether we 
like it or not, we are going to be affected by what we do. We will be 
affected by what you do; you will be affected by what we do. We might as 
well do it together and make the most of it.
    Now, in terms of what has happened in America, obviously it's always 
more enjoyable when our stock market goes up than when it goes down. But 
I have talked to our Secretary of the Treasury about this several times 
since yesterday. I want to reiterate the point that I think is important 
for Russia, for America, for every country: We believe our fundamental 
economic policy is sound; we believe our people are working at record 
rates; and we are determined to stay on a path of fiscal discipline that 
brought us to where we are. I think that wherever there are markets 
there will always be changes in those markets. But we must attempt to 
move in the right direction.
    And that's what I want to talk to you about today: How can we move 
in the right direction? When I look at all the young people here today--
and I have read about you and your background--young people from all 
over Russia, seizing the possibilities of freedom to chart new courses 
for yourselves and your nation, making a difference by building 
businesses from modest loans and innovative ideas, by taking 
technologies created for weapons and applying them to human needs, by 
finding creative government solutions to complex problems, by improving 
medical care and fighting disease, by publishing courageous journalism, 
exposing abuses of power, producing literature and art and scholarship, 
changing the way people see their own lives, organizing citizens to 
fight for justice and human rights and a cleaner environment, reaching 
out to the world. In this room today, there are young people doing all 
those things. That should give you great reason to hope.
    You are at the forefront of building a modern Russia. You are a new 
generation. You do represent the future of your dreams. Your efforts 
today will not only ensure better lives for yourselves but for your 
children and generations that follow.
    I think it is important to point out, too, that when Russia chose 
freedom, it was not supposed to benefit only the young and well 
educated, the rich and well connected; it was

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also supposed to benefit the men and women who worked in factories and 
farms and fought the wars of the Soviet era, those who survive today on 
pensions and Government assistance. It was also supposed to benefit the 
laborers and teachers and soldiers who work every day but wait now for a 
paycheck.
    The challenge is to create a new Russia that benefits all 
responsible citizens of this country. How do you get there? I do not 
believe it is by reverting to the failed policies of the past. I do not 
believe it is by stopping the reform process in midstream, with a few 
Russians doing very well but far more struggling to provide for their 
families. I believe you will create the conditions of growth if, but 
only if, you continue to move decisively along the path of democratic, 
market-oriented, constructive revolution.
    The Russian people have made extraordinary progress in the last 7 
years. You have gone to the polls to elect your leaders. Some 65 to 70 
percent of you freely turn out in every election. People across Russia 
are rebuilding diverse religious traditions, launching a wide range of 
private organizations. Seventy percent of the economy now is in private 
hands. Not bureaucrats but consumers determine what goods get to stores 
and where people live. You have reached out to the world with trade and 
investment, exchanges of every kind, and leadership in meeting security 
challenges around the globe.
    Now you face a critical moment. Today's financial crisis does not 
require you to abandon your march toward freedom and free markets. 
Russians will define Russia's future, but there are clear lessons, I 
would argue, from international experience. Here's what I think they 
are.
    First, in tough times governments need stable revenues to pay their 
bills, support salaries, pensions, and health care. That requires 
decisive action to ensure that everyone pays their fair share of taxes. 
Otherwise, a few pay too much, many pay too little, the government is in 
the hole and can never get out, and you will never be able to have a 
stable economic policy. It is tempting for everyone to avoid wanting to 
pay any taxes. But if everyone will pay their fair share, the share will 
be modest and their incomes will be larger over the long run because of 
the stability and growth it will bring to this Russian economic system.
    Second, printing money to pay the bills and bail out the banks does 
not help. It causes inflation and ultimately will make the pain worse.
    Third, special bailouts for a privileged few come at the expense of 
the whole nation.
    Fourth, fair, equitable treatment of creditors today will determine 
their involvement in a nation tomorrow. The people who loan money into 
this nation must be treated fairly if you want them to be loaning money 
into this nation 4 years, 5 years, 10 years hence.
    These are not radical theories, they are simply facts proven by 
experience. How Russia reacts to them will fundamentally affect your 
future. Surviving today's crisis, however difficult that may be, is just 
the beginning. To create jobs, growth, and higher income, a nation must 
convince its own citizens and foreigners that they can safely invest. 
Again, experience teaches what works: fair tax laws and fair 
enforcement; easier transferability of land; strong intellectual 
property rights to encourage innovation; independent courts enforcing 
the law consistently and upholding contract rights; strong banks that 
safeguard savings; securities markets that protect investors; social 
spending that promotes hope and opportunity and a safety net for those 
who in any given time in an open market economy will be dislocated; and 
vigilance against hidden ties between government and business interests 
that are inappropriate.
    Now, this is not an American agenda. I will say it again: This is 
not an American agenda. These are the imperatives of the global 
marketplace, and you can see them repeated over and over and over again. 
You can also see the cost of ignoring them in nation after nation after 
nation.
    Increasingly, no nation, rich or poor, democratic or authoritarian, 
can escape the fundamental economic imperatives of the global market. 
Investors and entrepreneurs have a very wide and growing range of 
choices about where they put their money. They move in the direction of 
openness, fairness, and freedom. Here, Russia has an opportunity. At the 
dawn of a new century there is a remarkable convergence; increasingly,

[[Page 1681]]

the very policies that are needed to thrive in the new economy are also 
those which deepen democratic liberty for individual citizens.
    This is a wealthy country. It is rich in resources. It is richer 
still in people. It has done a remarkable job of providing quality 
education to large numbers of people. You have proven over and over and 
over again in ways large and small that the people of this country have 
a sense of courage and spirit, an unwillingness to be beat down and to 
give up. The future can be very, very bright.
    But we can't ignore the rules of the game, because if there is a 
system of freedom, you cannot take away and no country, not even the 
United States with the size of our economy, no country is strong enough 
to control what millions and millions and millions of people decide 
freely to do with their money. But every country will keep a large share 
of its own citizens' money and get a lot of money from worldwide 
investors if it can put in place systems that abide by the rules of 
international commerce. And all Russia needs is its fair share of this 
investment. You have the natural wealth. You have the people power. You 
have the education. All you need is just to get your fair share of the 
investment.
    Now, 21st century economic power will rest on creativity and 
innovation. I believe the young people in this room think they can be as 
creative or innovative as anyone in the world. It will rest on the free 
flow of information. It will rest on ideas. Consider this, those of you 
who are beginning your careers: America's three largest computer and 
software companies are now worth more than all the American companies in 
our steel, automotive, aerospace, chemical, and plastics industries 
combined--combined--our three biggest computer companies.
    The future is a future of ideas. No nation will ever have a monopoly 
on ideas. No people will ever control all the creative juices that flow 
in the human spirit more or less evenly across the world. You will do 
very well if you just get your fair share of investment. To get your 
fair share of investment, you have to play by the rules that everyone 
else has to play by. That's what this whole crisis is about. No one 
could ever have expected your country to be able to make this transition 
without pain. You've only been at this 7 years.
    Look at any European country that has had an open market society for 
decades and decades and decades. They have hundreds, indeed thousands, 
of little organizations, they have major national institutions that all 
tend to reinforce these rules that I talked about earlier. Don't be 
discouraged, but don't be deterred. Just keep working until you get it 
in place. Once you get it in place, Russia will take off like a rocket, 
because you have both natural resources and people resources.
    Now, I think it's important to point out, however, that economic 
strength--let's go back to the rules--it depends on the rule of law. If 
somebody from outside a country intends to put money into a foreign 
country, they want to know what the rules are. What are the terms on 
which my money is being invested? How will my investment be protected? 
If I lose money, I want to know it's because I made a bad decision, not 
because the law didn't protect my money. It is very important. 
Investors, therefore, seek honest government, fair systems--fair for 
corporations and consumers, where there are strong checks on corruption 
and abuse of authority and openness in what the rules are on how 
investment capital is handled.
    Economic strength depends on equality of opportunity. There must be 
strong schools and good health care, and everyone must have a chance to 
share in the nation's bounty. And economic power must lie with people 
who vote their consciences, use new technologies to spread ideas, start 
organizations to work for change, and build enterprises of all kinds.
    Now, some seek to exploit this power shift that's going on in the 
world to take advantage of their fellow citizens. When this nation went 
from the old Communist command and control system to an open free 
system, without all the intermediate institutions and private 
organizations that it takes years to build up, vacuums were created. And 
into those vacuums, some moved with an intent to exploit their fellow 
citizens to enrich themselves without regard to fairness or safety or 
the future. The challenges for any citizen--this is not Russia 
specific--this would have happened and has happened in every single

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country that has had to make this transition. There's nothing inherently 
negative about this development. It is as predictable as the Sun coming 
up in the morning. Every country has had to face this. But you must 
overcome it.
    You must have a state that is strong enough to control abuses: 
violence, theft, fraud, bribery, monopolism. But it must not be so 
strong that it can limit the legitimate rights and dreams and creativity 
of the people. That is the tension of creating the right kind of 
democratic market society.
    The bottom line is that the American people very much want Russia to 
succeed. We value your friendship. We honor your struggle. We want to 
offer support as long as you take the steps needed for stability and 
progress. We will benefit greatly if you strengthen your democracy and 
increase your prosperity.
    Look what our partnership has already produced. We reversed the 
dangerous buildup of nuclear weapons. We're 2 years ahead of schedule in 
cutting nuclear arsenals under START I. START II, which still awaits 
ratification in the Duma, will reduce our nuclear forces by two-thirds 
from cold-war levels. President Yeltsin and I already have agreed on a 
framework for START III to cut our nuclear arsenals even further.
    For you young people, at a time when India and Pakistan have started 
testing nuclear weapons, America and Russia must resume the direction 
the world should take away from nuclear weapons, not toward them. This 
is a very important thing.
    We are working to halt the spread of weapons of mass destruction. We 
signed the Comprehensive Nuclear Test Ban Treaty with 147 other 
countries. We're working to contain the arms race between India and 
Pakistan, to strengthen controls on transfers of weapons technologies, 
to combat terrorism everywhere.
    Our bonds are growing stronger, and as they do we will move closer 
to our goal of a Europe undivided, democratic, and at peace. We reached 
agreement for greater cooperation between NATO and Russia. And our 
soldiers serve side by side, making peace possible in Bosnia.
    We don't always agree, and our interests aren't always identical. 
But we work together more often than not, and the world is a better 
place as a result. Building peace is our paramount responsibility, but 
there is more we must do together. One thing we need to do more together 
is prove that you can grow the economy without destroying the 
environment.
    A great man looking at the condition of the environment charged that 
humanity was a destroyer. He wrote, ``Forests keep disappearing. Rivers 
dry up. Wildlife has become extinct. The climate is ruined. The land 
grows poorer and uglier every day.'' Chekhov wrote those words 100 years 
ago. Just imagine his reaction to the present environmental conditions, 
with toxic pollution ruining our air and water, and global warming 
threatening to aggravate flooding and drought and disease.
    Together, we can create cleaner technologies to grow our economies 
without destroying the world's environment and imperiling future 
generations. Together, we can harness the genius of our citizens not for 
making weapons but for building better communications, curing disease, 
combating hunger, exploring the heavens. Together, we can reconcile 
societies of different people with different religions and races and 
viewpoints, and stand against the wars of ethnic, religious, and racial 
hatred that have dominated recent history.
    If we stand together and if we do the right things, we can build 
that kind of world. If the people of Russia stand for economic reform 
that benefits all the people of this country, America will stand with 
you. As the people of Russia work for education and scientific 
discovery, as they stand against corruption and for honest government, 
against the criminals and terrorists and for the safety of ordinary 
citizens, against aggression and for peace, America will proudly stand 
with you. It is the right thing to do, but it is also very much in the 
interest of the American people to do so.
    I was amazed there were some doubters back in America who said 
perhaps I shouldn't come here because these are uncertain times 
politically and economically. And there are questions being raised in 
the American press

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about the commitment of Russia to the course of reform and democracy. It 
seems to me that anybody can get on an airplane and take a trip in good 
times and that friends come to visit each other in challenging and 
difficult times.
    I come here as a friend, because I believe in the future of Russia. 
I come here also because I believe someone has to tell the truth to the 
people, so that you're not skeptical when your political leaders tell 
you things that are hard to hear. There is no way out of playing by the 
rules of the international economy if you wish to be a part of it. We 
cannot abandon the rules of the international economy. No one can.
    There is a way to preserve the social safety net and the social 
contract and to help the people who are too weak to succeed. There is a 
way to do that. And there are people who will help to do that. But it 
has to be done. So I come here as a friend. I come here because I know 
that the future of our children and the future of Russia's young people 
are going to be entwined, and I want it to be a good future. And I 
believe it can be.
    Recently, a woman from Petrozavodsk--I hope I pronounced that right, 
Petrozavodsk--wrote these words about your people, who won World War II 
and rebuilt from the rubble. Listen to this. She said, ``We survived the 
ruins, the devastation, the hunger, and the cold. It is not possible 
that our people can do this again? If people raise themselves, they can 
move mountains. Toward what end? Pushkin once said that so long as we 
burn with freedom, we can fulfill the noble urges of our souls.''
    In all this dry and sometimes dour talk about economics and finance, 
never forget that, whatever your human endeavor, the ultimate purpose of 
it is to fulfill the noble urges of your soul. That is the ultimate 
victory the Russian people will reap if you will see this process 
through to the end. I hope you will do that, and I hope we will be able 
to be your partners every step of the way.
    Thank you very much.

Note: The President spoke at 4:50 p.m. in the auditorium at Moscow State 
University. In his remarks, he referred to Maxim Safonov, student, 
Moscow State University; and Minister of Foreign Affairs Yevgeniy 
Primakov and President Boris Yeltsin of Russia. A portion of these 
remarks could not be verified because the tape was incomplete.