Following are excerpts from a CNBC EXCLUSIVE interview with Russian President Dmitry Medvedev today on CNBC's "Closing Bell with Maria Bartiromo."
All references must be sourced to CNBC's "Closing Bell with Maria Bartiromo."
BARTIROMO: Mr. President, let me ask you about investments, foreign capital coming into the country. There is a worry by some of the rule of law not being in place, and the idea that foreign capital will be protected. So I ask you, is foreign capital protected? Is it welcome in Russia? It seems that the Yukos story, TNK-BP story or the Shell selling the 51 percent stake to Gazprom all have caught the world's attention, and now people want to know if their capital will be protected.
Pres. MEDVEDEV: Well, I have quite a different point of view on the processes that happened during that time. I don't think that the companies you mentioned sold 51 percent of their shares under pressure or under threats. Nothing like that happened. But if we speak about the investment climate in general and FDIs in particular, then of course our legislation governing such investments should be further improved. We have walked quite a path already modernizing it. But there's a lot of room for improvement. We watch the experience of other countries. We have now such a legislation that treats foreign investments as if they were domestic investments, so the investors have equal rights on our markets.
Of course, certain difficulties will arise because legal systems in Russia, in Great Britain or in the US are not totally compatible. And what I'm not happy about is the court protection of investments. And that's exactly where we are 0oing to concentrate our efforts on. We want to improve our court system so that courts handed out their decisions quickly and efficiently, and we have quite--we have made quite a lot of effort to improve different codes in our country. The judicial code, civil code, they have already been adopted and they're in force. I don't want to create a rosy picture. Not everything is quite as cloudless.
But speaking about TNK-BP, it has nothing to do with the quality of Russian legislation or with some ill will. No, it's just a conflict of interests; a conflict of interest between foreign owners and national owners. So they agreed, created a joint company, each party having 50 percent of that joint company. And as a former lawyer, I can say that such an arrangement is the most unstable. When neither party has a control over the business, it will, in a certain amount of time, lead to conflict, to friction, and that's exactly what we had with that company. But the conflict is over now and the government never participated in that conflict and never tried to help the business owners to sell--to solve that conflict.
My position have always been clear. This is dispute between private owners, and let them go to court and settle their dispute there. And that dispute was not handled by Russian courts, because the statutory documents of the company, they were governed by law of a foreign country, I don't remember which one, and the dispute was handled by a foreign court. But anyway, when there are such problems regarding property rights, when there are frictions, such problems should be handled by courts--foreign courts, Russian courts--and we need to streamline the way our courts handle such requests. Corporate procedures--court procedures, this is one of my priorities. Legal reform for Russia is a must. And I keep track of it daily.
BARTIROMO: So Mr. President, what are you expecting to achieve from the St. Petersburg Economic Forum? There will be a lot of potential investors coming to Russia.
Pres. MEDVEDEV: The St. Petersburg forum, in my view, has in fact turned into a well-developed platform which is used by large businessmen in order to talk to their Russian counterparts. And due to the fact that it is a significant and an important forum, at a certain stage we asked the Davos forum to provide us with some participatory assistance. And this assistance was extended, in fact, to us from the organizational point of view. It was important is that this is a very important economic platform, a forum for discussion in this country. We are waiting for many guests to come. We have many heads of companies coming. And we have a tradition of having meetings with leaders of businesses, head of states traditionally meet with them, and I hope that tradition will be maintained this year. And those who are going to speak at the forum, both leaders of state and leaders of businesses, would try to address the most important issues which are in the air, though of course such responses are rather future-oriented.
And those issues which exist are rather future-oriented, too. The first question is where we are at the moment. The second is what is happening to the world economy and to the national economy. And another question is whether the measures of support to national economies is substantial enough, and how, on the other hand, we have to oppose protectionism, however difficult it might be. Another thing is what we heard here already, too, is what is the exit strategy? So I believe this is something which is absolutely topical today.
And there is another truth which has been--has turned obvious to us during this credit crisis. When speaking at the St. Petersburg forum one year ago, I was saying that we are on the brink of a--we were on the brink of a crisis. And I was saying then that partners from other countries could have paid more attention to their economic processes. Unfortunately, all my forecasts came true. It's clear that it is not--does not mean anything now, that this only means that we need to listen to each other better because now we see how dependent we are on each other. Some 30, 40, even 50 and 60 years ago, when the Bretton Woods system was created, there was no such tight bondage, tight linkage between all the entities in the world economy. Now, creating any solutions based on some particular regional ways is not working, and the crises which appear in Europe, America or in Asia can trigger a situation globally. That is why when national economic decisions are taken, speaking about parameters of inflation, printing of money or other economic indicators, we should understand when taking such decisions at home we do have direct influence on the economies of other countries. And this economic globalism is probably the main aftermath or the main lesson we should learn from the crisis. In any case, this also says good, better--or better say better grounds for the future, because we can now create a more sound economic architecture for future.
At the same time, I believe that the forum is not the platform where decisions are taken. I believe that we should rather have good conversations with all the colleagues who are concerned by the current situation. I hope you will enjoy that forum, too, and you will have a chance to see that such types of events which take place in Russia can yield their positive fruits in order to resolve some particular objective. And this is just one of the fragments, one of the components in the global equation of success, and I believe that after this forum we'll be coming a bit closer to joint understanding of the global climates. But we should not forget that after that we'll have a meeting of the G-8 in Italy and then we'll have the meeting of the G-20 in the United States. That is why such forums helps to better understand the current state of affairs, and I sincerely hope that this will be the case demonstrated in St. Petersburg in the city I come from.
BARTIROMO: And I'm honored to be included. Thank you. I'm looking forward to it.
Mr. President, if it's OK, I have one final question, just briefly, because this is certainly one of the issues that you are discussing now, you will be discussing at the G-8 and the G-20. I was reading about it in the report from the Commission on US Policy towards Russia, and that is stopping proliferation of nuclear weaponry. And of course, I just wondered what your reaction to North Korea's actions were recently, and if there's anything you can do alone or with President Obama or with your colleagues around the world to help stop that proliferation?
Pres. MEDVEDEV: This is by no means an economic topic, is it. But of course it is, unfortunately, by no means less topical. What has happened over the past--recent past is very tragic and it's very pitiful indeed. We were working through a consolidated international effort to help North Korea to get out of this very difficult economic situation so that the nuclear program which is being implemented in the--in North Korea would be peaceful in its essence and would not be creating any harm to the adjacent countries. But we should have to admit that North Korea is not close only to South Korea and Japan, it is close to us also. It is our close neighbor here. And we have always had quite good relations with the North Korean leadership. But what has happened raises great alarm and concern.
Over the recent past I have had quite a number of telephone talks with the prime minister of Japan, with the president of the Republic of Korea, South Korea, and I've talked to other colleagues also, and our opinion is rather simplistic. What has happened, I mean, here, the...(unintelligible)...and the launches of missiles, of shorter range and now they are--there is also reports that some ballistic missiles are also possible, we have the understanding that it undermines the international security and safety and it is in strong contradiction with the decisions by the United Nations, by the Security Council and the General Assembly. That is why we are supportive of those proposals which have been said in particular, which means to adopt a stronger resolution which condemns these events.
We need also to think about some measures to deter those programs which are being conducted, including the aspects of economic processes. We hope that the North Korean leadership will demonstrate appropriate understanding and will get back to the table of negotiations, because there is no other solution to this problem. The world is so tiny, we said about the economic problems which are so common to all of us. But indeed, the WMD development or proliferation is a danger which is still higher than that. That is why the international community should oppose any steps which are in contradiction with the international attitudes in this area.
Our position is clear-cut. We're prepared to interaction with any state, with our neighbors, with all players globally and with the United States, and I'm prepared to discuss this matter in more detail during our meeting with President Obama in Moscow in early July. And we're going to discuss this in other forums, also. This is our shared concern and decisions are to be taken.
BARTIROMO: Mr. President, thank you so much for your time today.
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