Q&A: Sanctions on oligarchs ineffective, ex-Putin adviser says

Russia At War

WASHINGTON, D.C. (NewsNation) — In the second month of the Russia-Ukraine war, a former economic adviser to Russian President Vladimir Putin says the United States needs to do more to help Ukraine and the sanctions in place against ultra-rich Russian oligarchs are toothless.

Andrei Illarionov acted as Putin’s Chief Economic Adviser for five years before leaving the post in 2005 when he felt the Kremlin was becoming too authoritarian. He had a working relationship with Putin — one that allowed him access to Putin’s manner and psychology in a way few officials have anywhere in the world outside Russia.

With a unique understanding of the workings of the Russian economy, Illarionov told NewsNation’s Joe Khalil that he believed sanctions imposed on Russia and on oligarchs made no difference in Putin’s decision-making during the war.

Read the extended Q&A with llarionov below (Editor’s note: The following interview has been edited for length and clarity):

Question: How did you end up becoming the Chief Economic Adviser to Vladimir Putin?

Illarionov: I’m an economist by training. I graduated from the St. Petersburg University Department of Economics. I happened to establish an economic think tank and I was producing… not bad reports for a number of years. I was the only person in Russia who predicted correctly the 1998 economic crisis with default and devaluation of the Russian ruble.

It attracted a lot of attention in the country and in society. So that is why there were some people who recommended to the then-incoming President Vladimir Putin, when he was looking for an economic adviser, to talk to me.

Question: How close was your relationship with Putin? Would you call him a friend at one point?

Illarionov: Never. It’s impossible to have a friend among presidents. They are very particular types of animals so that is why I seriously doubt they could have any friends at all. But certainly, it was not my plan (to befriend Putin) and I never thought of such ideas. My idea was just to view this position to help this country have high and sustainable growth rates, and to some extent, I succeeded.

Question: There may not be anyone in America who understands the workings of the Russian economy, like you do. When you see sanctions now that are put on Russia, do you think that they’re significant enough to have an impact that might sway oligarchs that might move powerful people against Vladimir Putin? Or do you think that maybe these are toothless?

Illarionov: One of the greatest misconceptions in the West and the United States, is the role of the so-called oligarchs in the Russian economy and Russian political system. These roles are next to zero.

I’ve heard so much through all these years about the oligarchs, about how it is important to put sanctions or how to put them in a very difficult position. If you’d like to make life miserable for those people, it’s OK. But if you think that those sanctions would make changes in the decision-making process of Mr. Putin or of Kremlin, it’s wrong. It’s a mistake.

You have no chance because they have no impact on the decision-making process with Mr. Putin.

Question: So, we’re really talking about the will of one man here?

Illarionov: Exactly. Because the political system and political regime in Russia is not like the United States or in any Western countries. It is not a democracy. It’s not even semi-democracy. It is even not even an authoritarian regime anymore. Right now, it’s a totalitarian regime with just a one-man show.

The main decisions, like this attack on Ukraine, have been taken by one person. No oligarchs whatsoever could have any impact on this decision. So that is why you can punish anyone. You can punish 145 million Russian citizens and it will not change the decision-making process of Putin.

Question: Is it because he doesn’t care that millions of Russians have wiped out their savings, that the ruble is now fractions of a penny. He just doesn’t care?

Illarionov: He doesn’t care. He has his goal. It is his dream. It is his dream for at least a couple of decades and he’s ready to sacrifice everything — especially that which does not belong to him — to reach this goal.

Question: As you watch what’s happening in Ukraine, what do you think is driving Vladimir Putin? What is motivating him right now?

Illarionov: His goal is to destroy the statehood of Ukraine. He had this idea, this goal for the last two decades. Even when I was his adviser, I saw for myself his intentions against Ukraine. I saw then that he had many opportunities to express his desire, his wish to destroy Ukraine, to take Ukraine under his control, to capture Kyiv. So that is why this is a realization of his long-term goal.

Question: You’ve been talking about this for a number of years. What gave you that indication that that was ultimately his goal?

Illarionov: Those who are following the events in Russian-Ukraine would probably recall the year 2003 —19 years ago — the attempt to capture the Tuzla strip in the Strait of Kerch. Probably not very many people remember right now but that was the first, not only expression of desire to get something, but it was real action — the capture of that strait.

In the year 2008, during the Bucharest NATO Summit, Putin talked to U.S. President George Bush, Jr., (and said) that Ukraine is not a real state. (He said) it is a failed state and half of the territory of Ukraine should belong to Russia. This is the official action of his desire to capture power of the country.

In the year 2014, as we know, he occupied Crimea and launched a war in Donbas. Since then, he kept telling everyone publicly, not only privately but publicly, that he would like to destroy the statehood of Ukraine.

So that is why it was not a surprise at all.

Question: Is there anything about the conflict that you think is important for people to know?

Illarionov: The United States needs to fulfill its general, basic obligation to the rest of the world as it is the best guarantor of world peace, security and freedom around the world. There is no other country that can do what the United States can do.

This is a particular challenge to the United States — not only to the administration but to society. The United States needs to support Ukraine, needs to help Ukraine. The most important thing that can be done by the United States is to provide weapons to Ukraine, a lot of weapons.

Ukraine can defend itself if they would have weapons — different types of weapons, heavy weapons, offensive weapons, anti-air, weapons, anti-missile weapons, anti-Navy weapons. Ukraine needs weapons and the only country that can provide all these weapons in necessary amounts, and give permission to other NATO countries to provide these weapons, is the United States.

The United States administration does not do it. And this is a dotted collaboration with Putin in the attack against Ukraine. So these positions (by the U.S. government) should be changed must be changed.

Question: With $16 billion from Congress and $2 billion authorized by the White House, you’re saying the US should do significantly more?

Illarionov: Out of this amount, military support is only $800 million. All the rest is humanitarian support.

Let me compare these $800 million for one year with the $83 billion that the United States gave to the Afghan army over 20 years. It’s in addition to more than $2 trillion that the United States spent in Afghanistan.

This is a real war. This is a big war. This is the biggest war since the Second World War in Europe. Do you know how much military support has been given by great superpower Luxembourg to Ukraine? $250 million. It’s comparable — what has been given by Luxembourg and what has been given by the US administration of Mr. Biden.

Czech Republic — also not the greatest superpower in the world — has provided military support for $1 billion.

So just it gives anyone the understanding of how the United States administration is just de facto not supporting Ukraine with something that is really the biggest need for Ukrainians right now — weapons, weapons, and once again, weapons.

Question: What do you make of Ukraine’s President Zelenskyy and his leadership so far?

Illarionov: I was rather critical about him before this attack. From my point of view, he made many mistakes and he did not prepare the country for an attack, which was absolutely obvious. He preferred to spend five times more money for the construction of roads, not on the military. Now all those roads have been used by Russian track tanks. So that’s a blunder.

But since the beginning of the attack, he demonstrated a remarkable stance against the aggression. And he did not leave Kyiv, as President Biden suggested to him. Regardless of the pressure on him from the Western countries that removed their embassies from the Ukrainian capital, he stayed there. So he definitely has personal courage.

Question: So what made you leave the Kremlin in the 2000-2005 timeframe?

Illarionov: Changes in the political system and the changing in political regime. When I became the economic adviser to Mr. Putin, Russia had a semi-free political regime. And after that… due to Mr. Putin’s efforts, the political regime became non-free. It became an authoritarian regime, with a very high level of repressions against the opposition, with attacks on different people.

For example, during the Beslan (school) siege, more than 300 kids, parents and teachers were killed by Russian troops and special services. And it was absolutely impossible for me to stay in such circumstances. And that’s why I announced ‘Yes, I cannot work with an authoritarian political regime,’ and I resigned.

Question: You’ve been openly critical of Vladimir Putin. Do you fear that he sees you, that he understands what you’re saying and that maybe you’re a target of Vladimir Putin?

Illarionov: Could you explain to me why should be silent? Who would say so to the world, to the people of Russia, to the people of the United States, the people of the world? Somebody must say what is going on.

Because that situation should not stay like this, it should be changed. And for that, it’s necessary to change the minds of people around the world. If the mindset of people around the world — especially in the United States and Western countries — will not be changed, it would continue. And this would be a catastrophe for Russia, Ukraine and for the rest of the world.

If Putin is not stopped, he would continue on. It will mean thousands or tens of thousands more death. He’s already responsible for some people’s deaths — calculated may be up to 500,000 or 600,000 deaths in Russia and outside of Russia. So how long should we tolerate this endless spiral of deaths produced by one person?

Question: Has the thought ever crossed your mind that your name may be on one of Putin’s kill lists?

Illarionov: Once again, we can compare one person and 600,000 people —we don’t know how many others could be victims of that person. So that is why the world needs to understand that these should be stopped. The sooner, the better. Because if he cannot be stopped in Ukraine, he would go further. And it cannot be saved.

Question: A lot has been said about his mindset, his psychology, Some say that he has been isolated. Do you see anything different in his behavior now than what you saw when you were working under him?

Illarionov: Yes. And no, in some sense, yes. Because it’s clear that the circle of people who he consults with is definitely narrow, and are more military people or security people, or people like that. But on the other hand, he is still the same person who would like to realize his imperial dreams.

Question: The news of what’s happening in Ukraine is not filtering in to the Russian people through state media. Do you think there is a significant portion of the population that breaks through the disinformation wall?

Illarionov: Not much, I would say because up to 70% of the Russian population have been brainwashed completely…. that would be conservative estimate, maybe more. They’re complete victims of state-run propaganda. The situation is very similar to what we could see in Nazi Germany in 1945, when the Allies reached Germany, and they found that the majority — almost 100% of the German population — just were completely fed up with Nazi propaganda. It is something similar that we can see right now in Russia, it’s very, very similar.

In some sense, it is even worse, in Nazi Germany. Because, for example, in Berlin in 1943, there were public demonstrations with more than 3,000 ladies who were demonstrating against the arrests of their husbands who were Jews arrested by the SS. We don’t see anything like that in Moscow right now. So that is why it’s shocking but to some extent, maybe the situation in Russia today, is not only comparable to Nazi Germany, but in some cases, maybe even worse.

Question: You talked about how for a long time, Vladimir Putin has been wanting to invade and recapture Ukraine to sort of rebuild the Soviet Union. Do you think that there is some sort of grand plan some strategy to bring this conflict to an end?

Illarionov: Let’s read what Mr. Putin has written and what he’s saying or what his people are saying. His goal was very clear. He announced it publicly last December. And after that, he repeated this in January, February and March.

His goal is not only to stop in Ukraine; his goal is to move into Europe. His goal is to return NATO to the 1997 division line, which means the so-called ‘de-NATO-ization’ of all countries in Central and Eastern Europe, including Baltic countries, Poland, Romania, Bulgaria.

What is necessary to stress is that Putin and the Russian Minister of Foreign Affairs repeated this goal even after the beginning of this attack on Ukraine. So they did not change this goal. So that is why we should not be surprised if he were to continue his attack, not only on Ukraine but on the whole of Europe.

Question: Certainly he has to be seeing what’s going on, and realizing that the Russian military is not performing to maybe what he expected. Do you think that when he sees the reality of what’s happening, he changes his calculus, maybe realizing that it’s not sustainable to try to occupy Ukraine permanently?

Illarionov: It’s probably too early to judge. We have seen over the last two decades that he repeats these attacks and he’s trying to grip more, piece by piece. This is not only against Ukraine but against Georgia, against Moldova and he continues to have his appetite for Baltic countries. So that is why I would not easily buy the stuff that they think right now or that he would be ready to accept this relatively poor performance of the Russian army in Ukraine.

Actually, it depends on what we should consider poor performance. Unfortunately, Russia is still making steps forward. They are still getting some pieces of land in Ukraine… maybe not with the speeds that they expected before, but there is still initiative on their side.

Question: Let’s imagine neutrality with respect to NATO is on the table for peace negotiations. And let’s assume even control over parts of the Donbas region, also on the table. Given what you know, about Vladimir Putin, do you think that these peace talks are real?

Illarionov: So far, I have not seen anything that Putin would say, by himself, and just to make any promises, but even when he makes some promises, it does not mean that he is going to execute them.

Question: So you could see a scenario where there is a peace deal, and then he violates it?

Illarionov: Yes, there was a Budapest Memorandum signed in 1994. There was a bilateral treaty between Russia and Ukraine, signed by Putin. And he violated Budapest Memorandum, he violated the bilateral treaty, he violated the UN Charter, he violated the Helsinki Act. He violated all international documents related to the security and territorial integrity of Ukraine. Why should we trust him once again? No basis.

Question: The expectation was that in a matter of one or two days, Russian forces could enter the capital of Ukraine and the Russian military hasn’t done that. Do you think there are advisors around him that are maybe afraid, for their lives or for other reasons, to tell him what really is happening and maybe even the state of their military before this invasion?

Illarionov: No, the reason (for Russia’s slow advance in Ukraine) is the quality of the Ukrainian military. And the quality of the Ukrainian military was not known, not only to Mr. Putin but to Mr. Biden.

American officials didn’t understand the quality of the Ukrainian military. We’ve read all these reports that Ukraine will be smashed within two-three days. Mr. Putin was not saying that. It was all American press saying that. And it was the so-called American intelligence saying, ‘OK, it will be 72 hours for Putin to capture Kyiv.’ So that is why it was a mistake, not only with Mr. Putin, but I would say the majority of the world’s experts, including the US administration.

Question: President Biden was asked at a press conference about whether Putin will use his rhetoric to escalate the military situation. Biden said he doesn’t care what Putin thinks and Putin will do what he’s going to do. What do you make of that comment?

Illarionov: President Biden is very well known for producing empty statements. And Mr. Putin does not take it seriously.

Question: So it sounds like you agree with President Biden?

Illarionov: No, I agree with the approach of Mr. Putin — it’s a rare case in which I would agree with Mr. Putin because Mr. Putin understands the reality. And that is why he’s interested in the situation on land… what’s really going on in Ukraine and what is the real balance of forces. What is been said by the current US president, (Putin) doesn’t care much.

Question: We’ve seen incredible resistance in Ukraine, to Russia. Do you think Vladimir Putin realizes how hated he is by most people in Ukraine? We’ve heard him say things like, Russians will be welcomed as liberators? Does he really believe that? Or is that just another propaganda tool?

Illarionov: He doesn’t care. This is propaganda, definitely. And he was using different propaganda tools to so-called justify his attack on Ukraine. But he doesn’t care whether it’s true or not. He probably knows that all this stuff is that he was writing and what he was saying is absolutely irrelevant. But he doesn’t care because he wants to accomplish his goal, no matter what.

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