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tv   Key Capitol Hill Hearings  CSPAN  September 1, 2015 4:00am-6:01am EDT

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>> on our next washington journal, we'll talk to peter but to lear, about the effect that china's economy has on the global economy. after that, new york time senior science writer discusses the use of probiotics in the u.s. manufacturing industry. his new book. washington journal is live every morning at 7:00 eastern on c-span. you can join the conversation on facebook and twitter. tour. c-span city this weekend, we are joined by charter communications to learn more about the history of literary life of grand junction, colorado.
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the mining of a certain mineral had a certain importance. books all over the colorado plateau and here in mesa county, we are surrounded by rock. within it we find a lot of dinosaur bones. that is really intrigued scientists -- that has really intrigued scientists for a long time. that containsl three different elements. it contains radium which is radioactive and was used by marie curie. canadian--vanadium. it also contains uranium which is one of the best sources for atomic power and weapons. wasain aspen all responsible for the -- through
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water legislation. >> he fought the battle to reserve water for western colorado by making sure that we got our fair share. how did he do that? careerng in his state and going on to this federal career. he climbed up the ladder of seniority and was able to exercise more power than you might normally have. certainly in the united states congress, where he was able to make sure colorado and western colorado would be treated fairly in any divisions of water. was thet success passage of the colorado river storage project in 1956. saturday our programs, on c-span's book tv. at sunday and -- and sunday
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2 p.m. markell, the founder of -- heama talks about his spoke earlier at the economic club of new york. jack: i am so honored. i never expected so many people to come to listen to my talk. i felt so important sitting there. how many of you have used alibaba's services? how many of you have never been to china?
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never been to china. thank you very much. well, 20 years ago, i came to america. my first trip was to seattle. i learned so much about america. america is not what i learned from the books. in seattle, i found the internet. i came back and told my friends that i am going to open a company called internet. i invited 24 of my friends and headed to our discussion, and finally we had a vote. 23 of them against me. forget about it, there is no such network called the
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internet. don't do it. only one person said, i trust you. i don't know what it is, but if you want to try, try it. i was 30 years old. i started my business without knowing anything about computers, without knowing anything about business, i started my first company with my wife and a schoolmate. we borrowed $1000 to start the business. it was so difficult.
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i was a blind man riding on the back of blind tigers. for the first three years, life was really bad. i tried to borrow $3000 from a bank, it took me three years. everyone said that jack is telling a lie because there is no such network called the internet in 1996. one day, china was connected to the internet from shanghai. i invited 10 friends to my apartment. i wanted to show them that i was not telling a lie. there is a network all the -- there is a network called the internet. we waited three and a half hours to download the first picture. i told him that in 10 years it would work. at least it proved that i was not telling a lie. we tried to help our small business to sell online. nobody wanted to sell because nobody wanted to buy. the first week, we had seven
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employees and we bought and sold ourselves. the second week, somebody started to sell on our website. we had two rooms full of things that we bought. since 1995 to 1999, we go nowhere our business. nothing was ready. in 1999, i invited 18 friends of mine to my apartment. we decided to do it again. we called it alibaba.com, and people said why alibaba. we used it because it's easy to spell and easy to remember. we have so many small business
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and small business it is so difficult for them to survive if we can use internet technology to help small business, it will be fantastic. we should help the small guys to save costs, because small business know how to save costs. our business is helping small business to make money online. we want to make the company last for 102 years. why 102 years? because we were born in 1999.
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102 will cross three centuries. don't say were successful no matter how much money we make. no matter how much we achieve. we want to live 102 years. we have another 86 years to go. when i heard this club is 108 years old, i was surprised and shocked. today, nobody believe that alibaba could survive. people say you are free, you are tiny. when we ipo, they said you are e-commerce, alibaba. we are different. the difference between us and amazon is we do not buy and
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sell, but we help small business to buy and sell. we have 10 million small businesses on our site buying and selling every day. we do not deliver our packages ourselves. we have more than 2 million people to help us deliver 13 million packages a day. we do not have warehouses, but we manage warehouses for other small and medium-size companies. we don't have our own inventories. but we do have more than 350 million buyers to shop every day on our site. our revenue last year was 390 billion u.s. dollars. this year, we will be bigger than walmart globally.
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as walmart managed, that size business has 2.3 million people. we grow from 18 people to today 34,000 people. amazon is a shopping center. you go there and buy things. and ali baba, and the picture you see like this, it's different. people are surprised. [laughter] here, e-commerce becomes a lifestyle. young people use it to exchange ideas, communicate. they build up a trust. it's a lifestyle. this is how the internet e-commerce is changing china.
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what we are proud of is not how much we sell. yes, we are proud. we will sell one trillion u.s. dollars in five years. this is my goal. we think we will possibly make it. we are proud of that, but we are more proud because we provide 14 million jobs for china. we created the jobs in the countryside. we created jobs for women, over 51% of the power sellers on the internet are women. we can feel proud of that. people say, what next? what is the future? you are everywhere. 80% of the buying and selling online is created by our company. our future is that we have to focus to globalize our business. we want to globalize the infrastructure of e-commerce.
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why internet e-commerce? why it grows faster in china than the usa? the infrastructure of commerce in china was not like here. you have all the shops offline, walmart, kmart, but in china, we have nothing nowhere. so e-commerce in the u.s. is a desert. it is a comment to the main business. in china, it is the main course. we create the infrastructure. if we globalize our infrastructure, the payment, all over the world to sell everywhere, help global consumers to buy everywhere. in 10 years, we will help to -- we will help to billion
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consumers -- we will help 2 billion consumers in the world to shop online. anywhere in the world, you are shopping online and within 72 hours you will receive the product. anywhere in china, a shop online and you will receive the product within 24 hours. we think our globalization is focused on helping small business. helping them to do is this in the most efficient way, and we think that we will help another 10 million businesses on our e-commerce platform. we will empower them, give them traffic, give them a payment system so they can do business anywhere easily and quickly. we will have 40% of business outside of china. today we have only 2%. what is your play in america?
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are you going to come win and invade america? when are you going to compete with amazon or ebay? i would say that we shall great respect forreat ebay and amazon, but the opportunity and the strategy for us is helping small business in america to sell their products to china. today, the middle class for china is almost the same as the american population. in 10 years, it will be more than 500 million chinese people will be middle class. the demand for middle-class, good products, good service, so powerful, so strong, and i think china today cannot afford the good products, good service with the terrible air we have.
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i don't think china will be able to do that. china has been focused on exporting for the last 20 years. i think the next 20 years that china should be focused on importing. china should learn to buy, spent the money, buy a lot of things globally. american small business should use the internet, go to china. past 20 years, they companies -- past 20 years, big companies all over china, but it is the great opportunity for the use of e-commerce for small business to go to america. in the past years, we have helped a lot of american farmers sell things to china. you would never believe the american ambassador to china asked us to sell the cherries in
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seattle. i said how can we sell cherries? 80,000 families booked the order , pickup up the cherries, ship them to china. 80,000 farmers, 160,000 tons of cherries, and last year 300 tons of cherries. i don't know what the year is about. we also had alaska seafood to help sell lobsters. , 10 years they cannot sell it. we have a lot of american branded companies using our site to sell. and costco, they sold 600 tons of nuts on our site, $6.5
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million. if we can help sell lobsters and cherries, why we cannot have these small and media sized companies to china using our system. so this is what i want. i want to take one day for example, november 11, the singles they, we make that a shopping day. last year for that day, we sold 9.7 billion u.s. dollars. for the first 10 minutes, we had 24 million people. this year, the number was scary. we need more american products to china. we have hungry 100 million people coming to buy every day. we do not come here to compete. we come here to bring the small business. years,on is in 10 to 20
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buy anywhere, sell anywhere. this is how the internet is going to change. we have changed to china. we feel proud of that. the power of change is so powerful. we have a factory and the first world war because of the strength of the arms. the second revolution is the energy, companies, and second world war. this time, internet, the data, and i think we have a new business called platform. and the third world war is going to happen, and this war is not between nations.
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this war will work together against disease, poverty, climate change, and i believe this is our future, the human being, the nation together. rely on the young people using computers, data to solve the problems, society problems, and this is what i am passionate about. it is not about the money. it is about the dreams. it is the dreams that you believe that change the world. the way is not easy. today is difficult, and tomorrow is much more difficult, but the day after tomorrow is beautiful. most people die tomorrow evening. thank you very much. [applause]
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>> thank you very much, jack, for those uplifting remarks. i feel good. we have tom of the new york stock exchange and gwen, cofounder of silver lake partners. i understand that they are an investor in alibaba. you are conflicted. if you have a question, you can e-mail them. questions@econclubny.org. tom, your first question. >> good afternoon, jack. welcome back to new york. it was riveting as usual. you mentioned that your talk is not about money. we are having a societal dialogue about income inequality in this country, and people who amass great fortunes can be
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vilified irrespective whether or not the activities they gazed -- activities they have engaged in amass those forces that fortunes have created a social good. when i think about you, you clearly a master great personal fortune, as well as employees and investors. at the same time, you created directly or indirectly 15 million jobs and lifted an entire swath of china up and given them a better quality of life. what you say to people who say, jack, you're too wealthy. you have amassed too great a fortune? mr. ma: thank you, tom. when i graduated in 1988, my first job was $10 a month. for three years, and every time i collect the money, i work hard for another month to buy a
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bicycle. today, i don't have time to spend the money. the money -- if you have less than $1 million, you are the happiest person in the world. $10 million, you start to worry, the valuation, where to buy stocks in this. [laughter] people believe that you can manage the money better than others. you manage the money for the others. i think the money i have got today is a responsibility, the trust of people. i remember the day when i started the business. i asked my wife if you want your husband to be the richest person or respected of business people.
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she said, respected mrs. people, because we will never be rich. [laughter] today, i never thought this money belong to me. if i believe this money belong to me, i have a problem. my life will not last long if i believe this is the money and my pocket, this is the money i spend on behalf of the society, and i spend it in my way, in our way, that can do most efficient, better than governments, better than other people. to me, it is one of the resources i have. it is a trust i should do better. >> jack, american business has long complained about counterfeit products in china. you have had your share of that problem. can you explain to us how you are doing that? ok.ma:
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when i come here and go to europe, i always have a problem about counterfeit issues. for alibaba business model, we do not buy or sell. we help 10 million small business. we have one billion product listings on our site. people buy fake products on our site. they complain us. i remember three years ago, i talked to the minister of commerce in china. he said, let's work together and fight against the fake products. i say, yes, let's do it. because i got support from the government. after closing more than 10,000 shops every week, more than 2000
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people full-time working for anti-counterfeit products, and 5700 people volunteering to do that. three years ago, over 3000 people came to our office to demonstrate. they are so powerful. it's the war against the criminals. they said everybody got alibaba to demonstrate. they will pay the air ticket fare, pay for the hotel rooms, and pay for every day if you go to alibaba against, because they are the fake product owners. i was so angry and wrote a letter to my employees and these guys. i will shut down the company
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tomorrow, if we -- and this guy opened a funeral for me for four days. i say we will never take it back. four years have passed. today in the real world, over 100,000 transactions concerned with counterfeit products. online, every 860,000, only one complaint. why? who is buyer, who is seller. who is manufacturer. i got a lot of personal threats. it is the war, a very lonely war. i feel upset. i heard somebody sue us for the cost. we had to fight it together. there are three things that become the cancer, counterfeit,
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intellectual property, and the credit system. it will destroy our business. it will destroy our business. i promise that we would do anything against it to china was not the owner because a lot of people produce and sell. today, more and more chinese companies care about the brand, care about internet properties. i believe that it is so difficult to solve the problem. today, we have the most unique technologies and we want to work here with you guys, american and european brands. let's work together and fight against them. that's working together.
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and i would say i got a lot of death threats from these guys. the police do not understand this. they have to report that somebody is selling fake gucci, so they went inside the room and realize they were wrong. so this is the war. we are getting somewhere. i have the confidence with the internet and young people and the commitment and with your support and help, we will win the war. >> jack, you have expertly navigated the political situation in china as well as china-u.s. political tension over the years. as you look out over the next 5-10 years, what are your concerns with respect to either the political situation within china or the relationship between china and the u.s.?
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jack: well, in the long run, i am pretty confident with the relationship. i remember the u.s. ambassador to china. he asked me what i think about china-u.s. relations? how many people know about the chinese religions? the western religion is christian. you have to find a competitor, good or not. chinese religion, the buddhism is that human insight how to understand your heart, how to make your heart big enough to embrace others.
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how to commune with nature. confucius is how to work in society in a disciplined way. we don't need to have a competitor. your competitor is yourself. that is our philosophy. if china sticks to its own philosophy and religion, we will have no problem at all. i think u.s. and china should work together and find some things that we can fight together, the cancer, the disease, the poverty, and the air, the climate change. if we are working the projects on that together, u.s. and china should work together, the small companies will follow. and i think the air, the climate change. if we work on projects of that together, u.s. and china should be working together. other companies will follow. i think i know america so well.
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when i came, not the what i learned from the books. you go to china a lot. you know that china is not what you think. unfortunately, i saw so many chinese experts here that only go once a year or less than that. they become the experts. now in the world, among the top 10 internet companies, of course we can do better. the communication. communication, make the young people understand each other. this can make the world better. i am not a push -- not a politician. i speak like businesspeople.
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i understand my customer. i understand my competitor. the business world is not the other people. you win. even if the other people die, you may not win. you should learn to work with your competitor, learn from the competitor, focusing on the customer, focus on the future, focus on the on people. this is what i believe all time. politics, it may be the same. i don't know. moderator: hugh described in your remarks how different your company is from ebay and how uniquely designed it is or was for success in china. as an investor in the company, many people complain to me that the chinese government does not allow u.s. participants to be successful in chinese markets a cousin it is not a level playing field. how do you address that concern? mr. ma: well, first, there are a
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lot of successful american companies in china. we do not see a lot of successful chinese companies in america. business, you all have the patience. you will have to prepare for the future. microsoft, ibm, oracle, they are accessories in china because they have been there for 10, 15 years. internet, if you want to conquer china, if you want to win china, internet is the speed. if you want to win china or when the market by speed, you will never win. you have to think about in 10 or 20 years, how can i make china different? how can i make the company better? how can i make customers better? free is not a business model third i agree. but we know ebay can go back to china. if we lose, we can go nowhere.
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we have to create unique value for china users. i think, yes, there are still some problems between china government and maybe some usa business. but there are also problems with china companies and the u.s. government. if you think about 10 to 15 years, if you think about a blind tiger, intended 20 years, suffered everything, made mistakes, change yourself, business will come. i have confidence with that. the next 20 years, i bet a lot of u.s. companies will be successful in china because you cannot stop it. you cannot stop internet. you can only stop it with people
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using the internet the wrong way. >> for those of us in the room who want to start a business in 2015 and grow it in a decade to $240 million in market cap -- [laughter] can you give us some advice on how you maintain the culture and the spirit of the company as you grow from -- i think you said 18 in the apartment in 1999 to 4000 now? mr. ma: i learned so much from american business. i learned from the ge, microsoft, and ibm, walmart. especially the value system, the mission, the value. from 18 people, we talk about
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mission. in the government, we talk about that. i remember 10 years ago, when he comes -- when i come to america to speak, we build alibaba binary value system, -- we built alibaba by the value system. in china, talking about value, talking about vision, that's impossible. i said welcome to china someday. spend three days in my company. the day he left, he said, jack, i know you are crazy, but i found about a hundred people who are crazy company. [laughter] you are crazy. they think people outside are crazy. -- people who are crazy never think they are crazy. they think people outside are crazy. [laughter] we tell them first that this is what we believe.
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we want to help small business. this is our value. this is our mission. if you don't agree, leave. if you join and you are still not happy, you can still leave. but if you join, you have to follow the rules we have. we are going to have 50,000 people in five years. when i was talking about having a free is a month ago, 30,000 people were already big enough. our goal is, in five years, in the year 2019, we will reach one trillion u.s. dollars >> but i
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want less than 50,000 people in the company. because the fewer people we have, the more jobs we can create for the others. the more people we have, the less jobs we can create for the others. that is my philosophy. our stock dropped 4% that they. i think this is traditional thinking. and we think we should create a culture that 15 or 20 years later, what kind of culture we should have. now human beings are moving from i.t. to data technology. it is so different. i.t. is so powerful. dt is to make others powerful. i.t. is to making sure you know something that other people don't know. dt is to make sure other people know. it is transparent, how to be
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more creative. in that way, 10 or three years later, the company is making sure that other people, your employees, your customers are more powerful than you are. so we are creating some new things so that every time we have young people, we know we value our culture. but we know, if we can understand young people better, we can create a new culture. my grandfather learned the world by newspaper. he trusted everything the newspaper said. and my father also listen to the radio and what the radio said and watched tv. my son, my daughter, they think internet. i want to get involved in it. so the new generation will be born and think and breathe the internet. your culture will be different. this makes me happy everyday.
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think about how we can have a better organization, a better culture. train those young people. rely on those young people. making sure it is their future. their future will be our future. their hope will be our hope. all companies are different. we have 33% of the senior management who are women. we have 49% of employees who are women. in normal business, you don't have that many women. leaders. women make us the user-friendliness. women make a big difference. so i'm excited. how to make the future better but also because i know the future culture of the company will shoot -- will be surely better than today.
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>> a question from the u.s. financial markets. why did you decide to go public and why in the united states? mr. ma: people ask me this question and, and if i had another life, i would keep my company private. [laughter] i do it not for myself. i do it for the shareholders, customers, employees. they need it. i don't need it. life is tough before the ipo. now it is much worse. [laughter] but, you know, able to help more
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people. and when we ipo, the company is more transparent. it is not only are people watch us. the global watch us. include us. we may not like the criticism. but you have to get used to it. you have to nurse it. you have to hear. every time i see some new -- some rumors here in america, i understand. it is a great opportunity first. learn us. no us. -- know us. and we are helping more people using our services and that we we can be better. but why america? we were rejected by hong kong. [laughter] we had a partnership system. i had 57% of shares, close to 60 set -- 60% of shares. i gave every founder shares. and today, more than 70% of the employees have shares in alipay and alibaba. and my shares and that is less than 7%.
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i am proud. i can show the prosperity together with our young people. this is the best time of their lives to join the company. you should give them return. but such a huge company, so influential in china. the founders put together less than 10%. and i don't want in the future jack ma will get out or die we make a lot of mistakes. and i don't want to say jack ma died and the company is in trouble. we have been looking for successors. if you want kids, you should have kids when you are young. i started looking for a successor when i was 40 years old. now i am 51, training young people. so we note keeping the culture is the key. i like the american system of
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doing business, but i don't really like your current independent director system too much. the board is not like directors. it is like lawyers making decisions. they are the ones making the final call. let me check my lawyers. they agree? yeah, they agree. [laughter] many companies are going that way. i know alibaba will go that way if we do not change today. we should find people that have the same passion, mission, and values. so we extend the partnership. the partners are the young people, the young generation. they should make sure to keep the culture of the company, keep the mission of the company, helping small business, helping consumers. but hong kong guys think, jack ma came from it -- came for a change.
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yeah. what did jack do? and we came to america. we are so lucky and so thankful. i really think play $5 billion, that is -- i really think $25 billion, that is not the money we raised. that is the trust, the wish on the hope we raised in america. i will use the money better, in a way that can help more and more small businesses. not only china. alibaba was founded in china, but it was created for the world. that is why we call the name alibaba, not some other chinese character that you never know. [laughter] and i hope -- you may not like investors, you may not like because you don't know us. in five or 10 years, our people are working day and night and
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always our philosophy is customer number one, price number two, and shareholder number three. we know that we take care of the customer better if we take care of the employees better. and we know that the shareholders will be better. we respect and we are thankful. that is what we are all about. thank you. [applause] agricultural secretary will talk about this program today at the center for american progress in life coverages at 1:00 p.m.
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eastern. >> the c-span city stewart visits cities across the country. this weekend, we are learning more about grand junction, colorado. the mining of a certain mineral had a long-term importance. >> we are surrounded by rock. we find a lot of dinosaur bones and fossils. that has intrigued scientists were long time. the other thing we find is a mineral. it contains three different elements. , which iss radium radioactive, it also contains than 80 him. that is used to strengthen
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steel. it was an extreme value during world war ii. it also contains uranium. it is one of the best sources for atomic power and atomic weapons. he fought the battle to reserve water for western colorado. he made sure that we got our fair share. how did he do that? his state career and going on to his federal the ladderclimbed up of seniority and was able to exercise more power than you , certainlylly have in the united states congress where he was able to make sure colorado and western colorado would be treated fairly.
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success was the passage of the colorado river storage project in 1956. ourou can see all of programs from grand junction, colorado and --. a next, a conversation on insia's economic interest the arctic. steven leer from myers. it is 90 minutes. everyone. welcome to the center for strategic and international studies. my name is heather conley, senior vermont for europe, eurasia and the arctic here at
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csis, and we are delighted -- i don't know if it's something you should talk about the arctic in august, cool thoughts, warm weather, but we are delighted that you are here with us. i have to say today is a little bit of an unusual day for me because normally when we host a public event, i briefly welcome and introduce our guest speaker, i let our guest speaker give brilliant insight, and then i get to ask questions that were on my mind, but today we're going to do something a little different. i'm going to sort of be the speaker for a few brief moments because today's occasion is to launch a new report that we've issued today just in the pdf form. we'll have hard copies available later in september, but of a new report that we've entitled "the new ice curtain: russia's strategic reach to the arctic." but i'm not going to bore you simply with the report.
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we've invited two extremely thoughtful and insightful colleagues. so after i present to you a very quick overview because this is 124 pages, so you know i'm only going to do a quick overview of the report, then i'm going to invite two colleagues to join us for a discussion about the russian arctic. in fact, both of our guests have are visited the russian arctic this summer. with us we have dr. marlene larvelle, research professor at the elliot school of international affairs at george washington university. marlene has written a fabulous book on the russian arctic which i think was released two or three years ago and has done some marvelous research. she's been a very important thought leader for me on this project. and we also have joining us steven lee meyers, correspondent with "the new york times". steve has been along serving "the new york times" in moscow
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from 2002 and 2009, he went back recently for a brief stint, but most importantly steve has a new book coming out, "the new czar," coming soon. and also spent some time in the russian arctic and also just visited the american arctic. because not only is it fun to talk about the dark tick in -- the arctic in august, our timing is actually fairly good because president obama travels on monday first to anchorage, alaska, to speak to a state department-hosted conference, and then he is going to visit the arctic circle. so we maybe talk a little bit about that trip and put some geopolitical context into our report. so let me very briefly in some ways tell you a little story how to we got to this report are. and to thank the mac arthur foundation for giving us the
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research funds to do this. we began this research in january of 2013. there was two purposes more our report. number one, although in the united states there's limited understanding of the arctic writ large, there was even more limited understanding of the most dynamic player, the biggest player in the arctic, and that was russia. so the report was designed to help particularly washington policymakers and a washington and american audience understand why the russian arctic is so important to moscow. but then we thought the timing was critically important because we were looking forward to the u.s. chairmanship of the arctic council which we now assumed since april of this year, and we thought this is an unexplored area to strengthen u.s./russian bilateral cooperation in the arctic. so with those two goals -- to understand the russian arctic more and to see if the russian
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arctic would give us a better sense of the future direction of russian development and then, again, a road map to strengthen the cooperation. a funny thing happened on the way to doing this report. the geopolitical environment changed fairly dramatically. and so while still the report focused on understanding why the arctic is so important to russia, we began to see an evolution of policy not only in the economic situation particularly, global energy prices dropping 50%, western sanctions imposed on russia, particularly its arctic energy exploration and in the security and the military dynamic. we started to see all of this change, and we thought, wait a minute, we need to capture this. we need to help provide some context to this. so the report began to shift a little bit away from, unfortunately, the u.s./russia
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cooperative format, but to try to describe this evolution by most importantly how can we preserve and protect arctic cooperation in light of these changing geo-economic and geopolitical factors. and so i promise you a very brief powerpoint presentation, but what we thought we'd do is just walk you through a little bit of the report. i want you to remember three things if you can out of 124 pages. number one, the arctic is incredibly important to russia. it represents 20% of its gdp, and we'll go and talk a little bit about the economic importance of it, the strategic importance of it. russia's strategic nuclear deterrent is based in the arctic, in the northern fleet. then i'm going to tell you a little bit about this evolution, the change that we're seeing, abolk what i call the duality of russian arctic policy because simultaneously russia
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seeks international cooperation to develop its economic potential, at the same time it seeks to project power, to preserve and what we're seeing is a heightened role for security in the arctic. and those two run side by side. you will see both of them. for some, they want to see partnership and the cooperation. others want to see the change in the security setting. i guess my overarching sense of this after working on this project for over two years, they are both, and they work together, and they send very different messages, and it's very confusing for policymakers to separate out and to understand what russia's true intentions are in the arctic. and then, of course, a policy report at csis would be missing if we didn't make some recommendations about how to rethink arctic cooperation, and also i'll run through those in just a little bit.
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so this -- maybe if we can dim the lights a little. i don't know if you can see or try to use side boards, that may be a little easier. let's talk about the importance of the arctic. this is a quote in 2008 from then-president dmitry medvedev, our first and main task is to turn the arctic into a resource base for russia in the 21st century. and this is a picture, of course, of the first offshore oil platform that is now producing oil in the arctic. and, in fact, the arctic will play potentially a tremendous role in russia's future energy base. but, again, the global landscape for energy has changed so dramatically. and it's unclear whether this very aspirational vision for energy, russian arctic energy development will, in fact, transpire. so, again, as i mentioned, you know, for any national leader who's looking at 20 percent of
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their gross domestic product, there's going to be enormous amount of importance placed in that location, and that is the arctic. and, of course, 32% of -- 22% of its exports. the numbers on gas reserves, coal. another area we don't talk about as much,, and i know march eleven will talk about -- marlene will talk about her visit, rare earth's potential in the arctic. this is also an incredible source of potential revenue for russia. and, of course, again, the energy reserves are staggering potentially. this is a picture of mormansk, steve has spent time there as well as marlene. it's really the transport hub, if you will, for the russian arctic. the vision for russia and its strategy is very aspirational. and as the economic situation has changed, we've seen those
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aspirations change. as we have seen fields like stockman, considered to be one of the largest natural gas fields, have to be postponed for development because now north america no longer would need lng from russia. that has changed the development picture. so you're seeing a tremendous aspiration, ambition, economic reality beginning to change that view. it's not just the energy, it's not just the minerals, it's the transportation route. the russian government has an extremely ambitious vision for the northern sea route that as you'll see here passes east to west, west to east depending on the direction of the shipment. in march of 2013 russia ahas developed a northern sea administration. they are designing search and rescue centers along this route. ten of them are anticipated. there is an enormous vision for
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making the northern sea route an international transit route. but, again, the economic reality is quite different from the ambition. last year international transits through the northern sea route were 53. that does not make a suez canal passageways. we understand that. but there's the vision, there is the hope, there is the aspiration. and so the transit route is an incredibly important issue of development for the russian federation in the arctic. i jokingly tell my staff i try not to have icebreaker envy when i show you this slide. but, again, i want you to understand why russia is a very dominant player in the arctic. this is a slide of their current icebreakers, 41. some are in plans. budget cuts have fluctuated those.
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as i always like to tell american audiences, your quiz, how many icebreakers does the united states have? technically, one and a half. one heavy ice-strengthened icebreaker, one medium strengthened icebreaker. so you see the difference. but, of course, russia holds over 50% of the arctic coastline. they do require a much more robust infrastructure presence. but, again, the it gives you the scale and the scope of russia's arctic presence. so while there's great economic benefit for russia in the arctic, because they hold over 50% of the arctic coastline, they also are going to be the most impacted by the changes we are seeing happening to the arctic. this is a picture of a pipeline that has succumbed to permafrost thaw. these are some of the incredible changes we are seeing in the arctic from coastal erosion, ocean acidification. permafrost thaw will change the
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reflection of both sub-siberian and arctic areas. and this is something that, quite frankly, the russian government understands that it's going to be a major challenge, i think is trying to figure out how to build resilience into that. and it's not just pipeline infrastructure. this is a picture of a home. foundations are cracking, crumbling because they were built on the permafrost that is adjusting and shifting. again, people don't appreciate that there are four million people that live in the arctic. the great requestest population is in -- greatest population is in the russian federation. a little under two million, i believe. there are major urban centers that are going to be dramatically impacted by the changes that we are seeing in the arctic. how will the russian government respond, be resilient to these important changes. and this is a picture, this is sort of a mystery, and maybe there's some scientists and much more knowledgeable people in the audience than i am on this. these are sort of these methane
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sinkhole, if you will, that are appearing in siberia. they're just these massive craters that are just dropping, and they believe it's a massive methane release, again, from permafrost thaw. it's unclear, again, it's baffling scientists, but what does that mean for the pooch? so russia, again, incredible economic opportunity, incredible challenge as they deal with the impact of climate change. so is i just wanted to, again, underscore the importance in our report, very lengthy discussions of the economics. we go true great detail -- through great detail, energy, mineral, transportation, infrastructure to get you, give you a very detailed sense of why the arctic is so important to the russian government. now let me move to the evolution. so in our report we have, and i would have loved to put them up, but i think you would not have
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been able to read the type, so we'll welcome you to go to our report. we discuss three phases of evolution. one of the hazards of my job, i'm very frequently asked by journalists when something happens in the arrange tick, what does this -- arctic, what does this mean. is that good? is that bad? something like that. and what i think one of the most important aspects of this report, we actually take the long view which is what our job is, the strategic part of our work, and looking at the evolution of russian arctic policy we begin, we put it into three phases from 2004 to 2009 as the first phase. i would say this phase is what i call the territory of dialogue phase. russia was just beginning to formulate some very important strategies about its arctic. it was looking at a regional development model.
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we were even hopeful that this would signal a decentralization, give more power to the region to help economically develop the arctic. but that evolution began to change from the 2001-2013 period. i actually signal this as really the return of president putin to the kremlin in 2012. we began to see a significant shift in russian domestic policy, obviously, and is an internal constriction of ngos and is civil society -- and civil society and the russia's indigenous groups being constricted in what they could do in the arctic. we were then beginning to see a her highly centralized model. president putin was replacing governors and leaders in -- a very new development, the creation of a russian arctic commission, a very centralized body which is being led by russian deputy prime minister dmitri rego zinn.
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for those of you who follow security, he was russia's ambassador to nato before he returned to moscow. he is also in charge of the military industrial complex. he's a nationalistic leader. and in our report we offer you some very quotable quotes about the arctic, most recently in april. he traveled to the knot pole where he -- north pole where he declared that the arctic is russia's mecca. so you can tell that the nationalistic sentiment is starting to come and an enhanced security posture. we then end the final revolution is 2014 to the present where we've really seen wholesale changes in russia's strategic approach to the arctic. highly centralized, and then we really see much greater security activity from the largest exercises we've seen in the arctic, the 2014 exercise and the far east, but also included the arctic in the new siberia island to march of this year a snap military exercise
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consisting of over 45,000 troops. it had land/air, maritime component. it was the most complex exercise we had seen, and it was unannounced. this is what we need to avoid. and this is the duality, as i mentioned. on the one hand, russia is a very welcomed partner at the arctic council as the eight countries are struggling to work through the environmental questions, the scientific and the research questions at the same time it's launching unannounced military exercise, it's turning military aircraft transpond transponders off endangering civilian airlines, and this is the mixed message. so which is it, is it a partner or turning into something much more significant? and this picture, and my apologies, it's difficult to see from this far away, but president putin declaring we must possess all instruments of
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power for the protection of our national security interests. so we went in that first phase from a description of the arctic as a territory of dialogues, we had an enormous amount of regional development strategies to one that is highly centralized. russia -- the arctic is russia's mecca. we have the arctic now described in russia's military doctrine where russian defense minister has declared that they're now growing national security threats in the arctic. and so we're seeing now new announcements of reopening military airfields. again, if you have a very ambitious vision for an international transit route and you need that infrastructure, but you don't need this much infrastructure for 53 transits in the summer months. and so our sense is that while -- i don't know if you could give a percentage, 60-70%
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of russia's military posture in the arctic i would say is understandable because of its enormous breadth to cover the search and rescue, oil spill prevention responsibilities, unannounced exercises strengthening russia's nuclear deterrence, strategic submarine assets, looking at the overarching response that we're seeing of russia's approach to the arctic, i would say we're looking at an emerging process of anti-access, anti-denial, and that's a very different message than we have seen even 12-16 months ago. so this is the challenge. as i said, what i get asked every day, what does this mean? is this important? you have to see the totality of the evolution to understand we are in quite a different place than we were even a year and a half ago. again, this is a picture of president putin, again, calling the northern fleet to full combat readiness. that was the unannounced march
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exercise that i mentioned. and finally, this is the picture of that very famous -- i think mr. row go zinn may have tweeted this. this is a picture of russian scientists visiting their north pole research station with, again, his line that the arctic is a russian mecca. so, and you can find our report at this, and it's on our web site. again, 124 pages we're trying to do our part for the environment, so we're not producing too many hard copies. though they'll be coming later. but, again, if i can just offer final reflections, the incredible importance of the arctic to russia's future development. we have seen a historic evolution of russia's arctic policy that i would not call a partnership. i would call it both a challenge to both arctic and non-arctic states, and that's part of that duality of international cooperation and enhanced security. and finally, what do we do about
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this? what are the recommendations? i have to say, and we've been doing research on the arctic for well over six years. and this is the most challenging part, because you would think this is an area where we can be the most creative, but it's been challenging. so as i looked at the totality of the arctic, the economics, the security which unfortunately the arctic council cannot address, it's forbidden to address security issues, and now we desperately need a forum to discuss these emerging security issues. and, of course, the human dimension, the indigenous that live -- the phenomenal environmental changes that we're seeing. i started to see three baskets emerge. and many of you who know the organization for cooperation in europe, three baskets, security which provide confidence-building measures and transparency. so in our final recommendations we sort of call for maybe a dramatic rethink of how we look
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at the arctic. maybe thinking of more of an organization for enhanced cooperation in the arctic where there is a security pillar, where we would get russia to agree to a military code of conduct in the arctic. no more snap exercises. thaw must be notified 45 days prior to to. again, getting back to osc, helsinki principles. giving a little more focus on the economics. that's what russia is so interested in. unfortunately, the united states is less interested in that as a topic. but can we bring russia more fully on the economic side as we did 40 years ago through the helsinki final act encouraging that. >> and finally, that human dimension, never forgetting that four million people live in the arctic. this is a human rights issue. we need to build greater resilience into all of those challenges that i showed you. so perhaps we need a little more innovation. as we think about the arctic, the arctic council has been a wonderful tool.
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i think it's insufficient for the challenges that i have suggested. and before i welcome marlene and steve up, let me stop and thank an incredibly important member of our team, carolyn rolloff, who is my co-author. carolyn has worked tirelessly on this project, and we could not have done this without her, so my thanks and special gratitude for my wingman on this project. so with that, and i have gone on for much too long, let's start the discussion and let me welcome steve and march look up. thank you. [applause] i'm so much happier to be in this seat, not up ott that podium. so we've -- i've asked marlene to start, and then we'll move to steve, and then we'll have a little conversation up here, maybe talk a little bit about president obama's great adventure next week. marlene, thank you. and, again, an incredible contributor to our report. >> thank you.
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first, congratulations for the report. i truly, i think that's a very timely report for reasons you already mentioned, but it's also a very long overdue by the american policy community on russia strategy in the arctic. and i think that's plenty enough. there was very few things on russia police aring the arctic only at the very superficial level. was russia just a critical actor? you don't have anything going on really in the arctic without russia participating in it. and what i really like in the report, and you made your point, i think, during the presentation that the duality issue is really something very important. and i wanted really to kind of congratulate you on being able in the report to maintain this kind of duality of the analysis because generally, i mean, also showing the kind of cooperation particularly that russia has been show anything the arctic
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has become more and more difficult to appreciate here in d.c. given the current geopolitical tension we have with russia. so that's what i would like to mention and just also give some feedback from my trip there. you still can find in the u.s. media this kind of narrative with russia conquering the arctic. well, russia is not conquering, russia is in the arctic just by its geography. russia is a key actor in the arctic because it's on russian territory. a large part of siberia is arctic or sub-arctic situation. so very often we tend to analyze the foreign policy issues, things that, in fact, are russian domestic policy on how russia is able or unable to manage its own development. i think that's something we can appreciate, this kind of russian domestic policy element. i think it's also it's legitimate for russia to try to protect and develop the region,
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and i think that's a kind of contradiction which may have specificities in the russian case, but that's something you see also in the older arctic countries, look at canada where you may also have this discussion, what do we develop, what do we protect, and how we can have both at the same time. something also very are specific and you mentioned it briefly, you have long historical patterns which you need to take into consideration. this kind of urbanization processes in russia, they are just history of russia in siberia. the fact that more than 90% of the arctic population, i mean, the russian arctic population is european people or soviet people living in arctic cities make also a very specific set of question on the way russia is looking at the indigenous issues. because it's about 5% of the arctic population. so that's why this issue is
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often considered very important by russia. so i like the way the report is balanced between recognizing the legitimacy of russia and looking at the internal aspects of the discussion. .. you have this newly created situation. youngou can find 40
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committed people who are rotating there and who are trying to secure the region. very important region because that is where you have to port. that's allowing it to export its mineral. they are working on every kind of -- fire, road accident, people in difficulties in the middle of the area. 40 people. they are still waiting for having a helicopter. road equipment. it is a great help for the population. when you discuss with the population not only in the russia you have a consensus that it is normal for the russian state to be proactive. reinvesting in the region. something a lot of people
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mention and i think with us and to take into consideration is that given the remoteness of the region you can also have the logistical challenge given the fact human capital is something which is fragile in russia. it's very open in military and paramilitary groups able to take care such conditions. you have the investment in the military because they are the only one that are committed and so on. that's maybe the specificity of the way russia is reinvesting in the arctic. and then i travel for two good examples that you just mentioned with a lot of city and cooperation going on with norway everywhere. it is a very diverse
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economically. the northern fleet is kind of the social fabric of 300,000 people living in the condition is the normal city and the arctic. on the other side you have 200,000 people within authorization. 70 to 80 population said the social role of the corroboration is just huge and reminder of the soviet system of having the deep sea in taking care about the welfare and all the everyday lives of the cities. the city is very polluted. it is very challenged and at the same time a dysfunctional giving the condition it is working. you have even the flow of population going back to the
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city, especially a lot of migrant and that is a place you can find to work. that is a good example on how the population hobbit in the corporate city we would consider nonsustainable is also a guarantee of social stability and that is that the population is looking for. in terms of team able to provide socialist ability to their own population. those are the elements that are important. the last element i want to mention is that all of these disturbing trends and the most disturbing is the number by russia's arctic air patrol on the territory of the state he had all of these overfly without authorization so i really like the recommendation about the
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code of conduct because that is risky behavior. that is the kind of long discussion with two of us in three of us. how do we have the issue of intention. why does this need to test the older countries to match where you have depredation that you would like to avoid paying ukrainian crisis in the reiteration of the u.s.-russia relationship clearly seems to be a spillover. last point and i'll stop here. what is really the main issue is from the russians died the remilitarization just part of the bid process of the state reinvesting in the arctic. we invested money, reinvesting energy, trying to delegate being
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and people around prudence circle as a way to repopulate the arctic. from the russian side, the militarization is one element to allow the repopulation and reintegration to the framework. seen from outside we of course must see the remilitarization element. the main driver is the state. it's not really private. it is still part of their biggest russian structure of managing richness and the soviet welfare done that you have. it is financially nonsustainable to have people living there. it makes sense historically, but everything is coming from the
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state in a time where we know money is becoming rare for the russians. then we have the issue of the sustainability of the reinvestment in seeing this last year in the arctic and the fact the russians date is deciding to invest in so much money in military spending, whether that is through the region and all the aspects i mentioned and that is some aid we should take into consideration because no one in russia wants to leave the early 90s and it cleared generally that everybody wants to avoid. russia is not an economic roster today. they would really shape the next decade and the fact choice of military spending is also a way to frame the global reinvestment in their ticket stamping i find
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disturbing because we also would like to see more spending and everything related to the arctic issue an investment and that is really one of the challenges of the russians stayed and it usually means you are not investing in your human capital and that is the sad side of the story and i would just stop here. >> thank you so much. steve. >> excuse me, first of all it is flattering to be asked to speak here because i'm just a reporter when i set out to work on art issues, heather is the first person i call and the report highlights or expertise. i would start by telling a story from last year when i was in dollar on the arctic circle just below your mall and i met the director of the museum unfair,
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wonderful woman and she told me this way which may be legend, but it's a good story. during world war ii, the great patriotic war, the local people, one of the orders reported actively soviet authorities that they had seen a giant fish in the gulf and they were men walking the fish who got off and came ashore and went back onto the fish and disappeared. they have no what they were doing, what they had seen. asher told the story, soviet authorities realized this was a submarine that had actually landed in the arctic. as a result of that, stalin realized there was exposure and the northern flank was in some way for verbal to an incursion like this. and the gulags built up the infrastructure in that area
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including a railroad that became known as the dead railroad. not because so many prisoners died, though thousands dead, but because it was never completed and ended up going nowhere. she told this story and ended it by saying it was just like nato today. and i think she was joking. but she touched on some thing that is behind a lot of what we are seeing. the idea by russia's arctic slime k. fewell is somehow exposed a vulnerable ms heather pointed out, the report points out this is an enormous part of russia's economic and national security. 20% of the gdp. it is sunday and they obviously have put at the center of their foreign policy. i thought of this more recently
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and if you've been there, you know there is an enormous monument to the war and it's dedicated to the defenders of the arctic and the war is everybody here knows resonate so much more deeply in russia because of the proximity obviously to the horrible cost the soviet union paid to defeat the nazis. it resonates more deeply than we appreciated policies today. it's not just a matter of the propaganda are some rallying of national immunity. it is something felt on the by every single russian. in fact, when i was after he went to this town called ted america on the pavement to the a couple hours then i went with
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this guy, igor who is a terrific guy. he was it to her guide and has this dream of building a job club in a tourist center in this tiny village. if you don't know, it was the scene of the location for the film leviathan on which came out. one of the bleakest films i've ever seen. as we were driving along, he was explaining to me places where the soviet union had airfield during the war. they had much more exciting than the whole old state. it is a visceral part of his life. and he is a young guy. he's not an old veteran of the war by any means. this notion of conflict in the arctic is not as strange as it may seem to some of us if we had
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frightening but i don't know that many people know much about that. by the way, after we were there for two hours, the fsb called ted and asked him what he was doing that to foreigners in town. the idea to me of an invasion of russia from the north is preposterous. i don't know who would conceive of it, but i don't think it is so crazy to the people of the kremlin, especially vladimir putin who has his own history from the war and it's often very close to the surface of the policy that you see. again, the idea of an invasion may seem crazy. if you remember the case of the greenpeace international boat at arctic sunrise it went to the platform on one of the pictures. they did it a year before in
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2012 and went back in 2013 in the russians the second time responded rather vigorously to do protest and as you know put them in jail for about 100 days before they were all amnesty. it is not unreasonable to imagine that some people in russia could have seen greenpeace basically as it passed -- as a test of russia's defenses and russia failed to be honest. and i think it is partly why they responded so harshly and it's not coincidental that you saw a lot of the priest rhetoric about defending the art take some of the military buildup after the protests. it coincided also with the
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invasion of crimea and the annexation of continuing war in eastern ukraine. from the russian dividend, the first shot if you wrote that has been fired in this cold war from their point of view came from the american side. very specifically the sanctions imposed after the annexation of crimea targeted not just oil companies that operate in the art to it, but specifically technologies designed to help russia exploit the natural resources. technologies they now don't have effective financing projects on the books have been put on hold. and there has been a continuing
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trickle effect that seems to be hurting a lot of companies including nova tax project in your mall and the other major projects out there. given again how important the natural resources contained in the art regard to russia's economy, what the u.s. did was strike right at the heart of his security. whether or not is the right decision is not for me to say. some people would like to see the u.s. responded them more harshly based on what is happening in ukraine. nonetheless, it was a very deliberate choice by the u.s. to target the arctic asset. when you talk about cooperation in the arctic, which many people do. certainly the arctic council
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does. it is important to understand from russia's side there is a competition underway and they are not the only ones making provocative moves. the last arctic council meeting was overshadowed out of ukraine and they think it is going to be something that continues. john kerry organizes the summit in anchorage on monday. they've invited the russians, other ministers. pointedly russia declined to send live, the fairly low level given the importance john kerry put on that. heather and i did hear from the russians i spoke with about the
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desire for cooperation. you still hear that in all of the russian statement, that they don't want to politicize what is happening up there. i think that authority happened and people who talk about the desire for cooperation are largely the people who will talk to a foreign reporter like me, the ones who are willing to talk to me are the ones making the decision right now. the duality exists, but it is tipped on to the security side of things from the russian point of view. >> well, thank you to you both. thank you so much for highlighting them and we talk about this in the report that i want to emphasize a strong sense of history for the russian arctic matches what is referred to as the red arctic which was modernization from assertive
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domain conquering forces and industrialization. many of which we see today. it is the famous rescues of russian scientists in some ways fast forward to that in 2014 the russian airdrop and can hearken back to that. the national history, national narrative and it's impressive and they are polling the narrative forward. in many ways the comments try to pull that accomplishment trying to return to that a 21st century context. do you need help with that. you need technology for a 21st century arctic development and they are pushing that away and it's been sanctioned.
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to try to challenge russia's arctic development as it pursues the third i really appreciated the methodology for reinvestment and that is how you interpret it . i agree with steve. for a variety of regions of the geopolitical environment and harkening back to the great pitcher out of core is russia's access to the north atlantic to keep that is quite critical. there is some of arctic exceptional at them and we all
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need and want international cooperation. the arctic is not a means. it is too important. and the strategic nuclear deterrence or in the arctic and is geopolitically important. we can create a framework to return back to confidence building, transparencies and we don't misinterpret each other and that is what is starting to happen. the arctic is not in the end and colin russia's partner is not going to make it immune. we have to deal with what we are seeing today. if i will throw a question and marlene why you think of questions you may have been you can ask all three above, but i would really like to focus on steve and marlene. let's talk about the president's trip to alaska. as well as secretary kerry hosted conference.
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i think my frustration about describing this as i'm not sure how to describe it. it is not an arctic council meeting although the members and observers are invited. it is not a preparatory meeting for the paris climate change summit in december but it's going to feel a little bit like that and it sort of its purpose. it's to highlight the art chick is really feeling the biggest impact of global climate change warming two to three times faster than any place on the earth. the president will highlight the need for climate change. but is this a missed opportunity. should the president and secretary kerry be addressing the other issue is or should we just stick to something they, which is not safe from the very dangerous, the climate change
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and i welcome your thoughts and the dynamics are talked about. is this a missed opportunity or to focus on the conference agenda. >> problem is if you want to have some consensus, you need to talk about climate change, even if it's not always confidential. the arctic region is missing the measure in something more of a security issue but of course reopen for geo politicize nine more what it is. it was a kind of tough choice. i think the good point about discussing climate change as it is open for a week being related to whether u.s.-russia is doing well. that is something that could even be more good look at the
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cooperation in space. that is something going relatively well and i think all these going on between the two countries is something we should be pushing for. if you remember for the american soviet cooperation was very much scientific. you can also try to maintain the line of dialogue which we would be missing the confidence building element dramatically. >> out with the admiral papp who state department convoy i saw a couple weeks ago and asked him about the conference. the most interesting thing he said is the real goal of the conference as well as the president's visit is to raise awareness of the art taken out
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for the other nations who will be there who obviously don't need to be told of the importance in the art tick before the american public. there is a broad feeling among people i talked to that the united states doesn't think of it tells us at arctic nation particularly compared to the way russia does as we talked about historically as well as terms of economic security. that may be overblown a little bit. people who are smart understand alaska is in the arctic that there is a feeling politically but as he pushes his climate change proposals that the impact it's having and is going to see these kinds of things and not
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will focus some attention on the arctic issues in terms that the climate agenda particularly. and the secretary's part, it is always good diplomats will tell you to sit around and talk and secretary kerry didn't buy a laugh riot to come. so yes there might have been an opportunity for issues to come up. in anchorage at her formerly in the agenda or the sidelines but the fact the russians are coming means that part of it is not taking place. >> the one question on the arctic climate change agenda in the picture shows the russian federation has to build resilience to the changes happening and the change double
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column. i don't sense in your conversations when you were visiting the russian arctic summer, are we going to see substantial change in russian environmental policies. it was becoming a political issue to prevent. as much as it is focused on trying to produce black carbon emissions, i don't sense the russian government was slow gas flaring down because of the can turn of environmental sensitivity. strategies have incredible depth on sustainable development. i just don't see where the practical application is happening to prepare for the change, mitigate the change going on. as the united states is speaking on climate change, obviously it is increasingly precarious.
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>> one thing i noticed in russia and this goes back to a project i did on the arctic 10 years ago is there is much less of a consensus on the government policy level about the impact of climate change and one of the deputy director of operations which runs the icebreakers said this is a cycle. guess there's unquestionably been warmer climate. that's where they could open a northern sea route for longer periods of time and so forth as their whole mission. but he said after the ice is at its lowest point in 2012 and increased again. he said that i hear this often much more than i do for the scientific community here that this is not simply an inevitable. it is not permanent and that's
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it does with people who oppose efforts to reduce emissions in this country and other countries, they don't see it as necessarily an urgent problem. the russians practical as well always operate in the arctic and if it is warmer and a little bit less price they would take advantage of that, but they won't play in a permanent change and i don't think you see much of a change at all in the environmental policies. >> i totally agree. the russian school of climatology is much less consensual on climate change. and also you have the russian narratives trying to impose strong environmental policies which is a way to slow down and russia cannot afford that now.
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that's sad, you can see at the municipal level and the private company level that they tried to mitigate things which is one of the most -- making some improvements as no one. for people says that okay now it is better and the collapse and that turned out to be a big policy because that would be considered for the russian state. a key element to understanding the russian authority sees the need so they tried to invest -- to discuss the investment and having clean energy it would be focus for the russian economy to hope to postpone the moment and
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find ways to mitigate and when the issue will be really fair with the not this kind of long-term because it will be economic revival. >> that is incredibly helpful to think about. i'm going to put the question onto the geopolitics geopolitics of the nascar audience to jump in and ask questions. one thing in the report mentioned here is the increasing presence of china in the russian arctic brought their obviously the energy resources and cooperative projects and assignments, bringing chinese scientist. china's constructionists nonnuclear icebreaker now to their account so they are sending a representative to the anchorage meeting. and some of our analysis without the enhanced posture of russia
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certainly had a lot to do about the west and nato in u.s. but also elements of china and duality on the one hand seeking china's investment very much because of sanctions wanted greater chinese engagement and that the client is feeling very comfortable about an increased physical presence. the prime minister saying the non-arctic state that badly paraphrasing the hubris they are becoming much more proactive. you have done some research on the relationship maybe you can give us some insight and will turn to you. >> i think you see that in a sense if we try to summarize that, you need chinese money investing, but no to china on
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the cd. so that is kind of different, which because the russian state also understands very clearly that the arctic ocean kim opened the navigation not only along the northern sea route, but also the money the russian state will not be there and are able to christ the ocean and that is clearly one of the chinese long-term investments. the duality is the chinese investment that the chinese controller management or ability to be very active. >> i would just add the russian submission to the u.n. on the seabed is direct it at that issue. if they can stake a claim on the
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way to the north pole, that would or could the notion of independent lay ships being able to go through with that essentially paying the russian fees to go through the northern sea route. >> and in fact, it is brought home very clearly. i believe two years ago the russian icebreaker scientific vessel had gone and traveled there and on the way back it was september they were able to travel out by any band that is pretty dramatic because you can't capture to see which allow you to do the development and then there is a question of control and feeling of vulnerability as you mentioned the northern vulnerability of that. the transits are so small. it is nothing to get too wildly excited about but a long-term perspective must be understood. now it is your turn.
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any questions about the russian arctic. raise your hand and we'll get started. caitlin is the perfect person to get us started. another noted scholar on the russian arctic, so look out. >> i would love for you to turn the map upside down and show it in a more polar to because from that perspective it looks like a giant gulf of mexico elected the bases in the region, this isn't very threatening. it is the type of thing you do. but i came across a video couple nights ago of american troops marching through in 1919. in fact, i can understand the russian concern because during world war i when russia had pulled out of the war, we had a
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lot of concern about military material and troops were sent in there. for some reason will send them in and invited 70,000 japanese troops in. there is a concern given russia's respect for history or maybe not respect, or an awareness that things like this. i could see that being an additional driving force in concern for protecting the arctic. for the most part, the airbases are airstrips are just not overly threatening. as i understand it except for submarines has been no ice capable naval ship. there is construction of coast guard ships but those are not armed like on national security. so to me it still looks like a
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domestic approach to the arctic, not and outward looking, but a local defense activity. so i just throw that out as important because when we say military, we think aggression. when we say coast guard, we think that sun. as i look at it, i see much more of that. once you get away from where they have submarine in the strategic issue. if you could talk about how russia really perceives that and whether they are looking aggressive or defensive in their approach to the arctic. >> i would say a couple of things. you are right about the history of course in the soviet union and russia of course. i do think after we had a period
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of two decades writing the paradigms are they shifted here. maybe not entirely among everyone. i personally have never come across a secret plan to dominate russia militarily. there was a period where there were several administration where we saw an opportunity to integrate russia into a global community, global security architecture. that is failed now and the administration understands that and is still trying to figure out how we deal with a hostile russia again. on the question of the resources being put up there, i've asked people about this and there's not an enormous amount of concern yet in the united states military. admiral papp said he would like to see us do in alaska but
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russia is doing their interns a more searching rest you capability. i was just up at the coast guard alex haley which is a few weeks up there floating around for domain awareness but else though for the drilling underway right now. that is how the united states has up there right now. they are going to send a few more ships, so they been the coast guard the coast guard commandant will tell you she is strained in terms of resources he has too be able to deploy a player as human activity increases on the way to the russian northern sea route, but also the other projects going on up there to increase fishing and tourism and so forth. in some respects from the u.s. or nato active, what is happening in the russian or is
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not necessarily provocative. what is the father points out in the report points out the provocative military exercises the nuclear saber which is dangerous talk air patrols they are doing quite aggressively along all of the arctic as well as bulk takes the, including alaska up to the border and so forth. that is the cold war stuff with it for a long time. again, in 91 it stopped in without being moved beyond that and we would be back into that era of testing provocations and so forth. >> to fall on back, that is why i mentioned the art expenditure because i seabed really managing the remotenes

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