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. Last Updated: 07/27/2016

Kremlin Welcomes Ex-Cold Warrior

ReutersWolfowitz meeting with Putin.
President Vladimir Putin on Thursday gave a warm welcome to new World Bank chief Paul Wolfowitz, whose past as a Washington hawk appeared to ruffle feathers only briefly.

Wolfowitz, who visited the Kremlin on the tail end of a two-day visit, balanced praise with warning after meeting with the president.

A former U.S. deputy defense secretary, Wolfowitz has in the past sparked indignation in Moscow with his comments. But at the beginning of his visit with Putin, Wolfowitz tried out his Russian: "I very much love the Russian language, but I can't say very much." He then switched to English, saying: "When I was a student studying mathematics, my father, who was also a mathematician, told me, 'If you want to be a serious mathematician, you study Russian.'"

Putin, for his part, said he hoped for a continuation of the "very good relationship" that had developed between Moscow and the World Bank under Wolfowitz's predecessor, James Wolfensohn.

In comments to reporters after the meeting, Wolfowitz warned against the temptation of excessive social spending and said that corruption was "No. 1 on the list" of obstacles facing sustained economic development.

Record-high oil prices are "mostly good" for Russia, but the decades-long boom-and-bust cycle makes excessive social spending dangerous, Wolfowitz said.

"The general principle has to be to invest funds in a way that ... doesn't create large demands and large expectations" when prices fall.

Wolfowitz said he and Putin had discussed a World Bank program to increase the transparency of Russia's judicial system. The program includes a $500,000 loan but will be 90 percent financed by Russia.

"Everyone up to and including the president acknowledged corruption as a problem facing this society and this economy," he said.

In remarks made before the meeting, Putin said that of the $13.5 billion in loans to Russia approved by the World Bank, the country had made use of only $8 billion.

Putin added that he welcomed the possibility of so-called sub-sovereign loans, which are issued directly to regions or municipalities without liability falling to the federal government.

"This is correct in my opinion because Russia's financial system shows a great deal of stability," Putin said, according to a transcript on the Kremlin's Web site.

Another key issue in the meeting was Russia's agenda as it assumes the chair of the Group of Eight industrialized nations in 2006. Wolfowitz said the main themes would be energy development, health care and poverty reduction.

Russia will expand the focus on African poverty set by current G8 head Britain to include poverty "in this part of the world, especially Central Asia," Wolfowitz said.

Earlier, Putin said he wanted to call attention to Moscow's "efforts to support CIS countries, which also need special attention on the part of the international community."

Before meeting with the president, Wolfowitz met Prime Minister Mikhail Fradkov and local businessmen, with whom he discussed a $500,000 World Bank loan to support the creation of special economic zones meant to stimulate investment in industries such as high tech.

Wolfowitz also had a look at rural life in the Moscow region village of Shishkin Les, where he toured a school and a medical clinic. He said he was struck by the the schoolchildren's "enormous appetite" to succeed. "One wanted to be a public relations consultant, one wanted to be a computer engineer. ... I think they need an educational system that meets their needs."

Wolfowitz said he was inspired by an exchange with 80-year-old Alexander Bolotyn, a World War II veteran he met at the clinic. "I thanked him for fighting in the war. He was genuinely pleased and I was genuinely thankful," he said, adding that the veteran then said: "'And we can fight poverty just the way we fought World War II.'"

The overall tone of the visit was a long way from the furore caused by comments Wolfowitz made in March 2001 in his capacity as U.S. deputy secretary of defense.

In an interview with a London newspaper, Wolfowitz said that Russian arms sales to Iran were "an ongoing activity and a serious problem."

"These people seem willing to sell anything to anybody for money. It recalls Lenin's phrase that the capitalists will sell the very rope from which we will hang them," Wolfowitz was quoted as saying in The Sunday Telegraph.

The Foreign Ministry responded at the time with a statement calling Wolfowitz's comments "dogmatic" and "openly confrontational."

"After eight years of absence from the corridors of power, top U.S. Defense Department officials seem not to understand how much the world has changed," the statement said.

Before assuming the post of World Bank head, Wolfowitz was best known as the ideological architect of the Iraq War. During the Cold War era, Wolfowitz worked on nuclear strategy in various government posts.

Wolfowitz responded dismissively Thursday to a Russian journalist's question about whether he would use the World Bank "as an instrument of American imperialism."

"I don't think either you or I know exactly what you mean by that word," Wolfowitz said. The bank exists purely to reduce global poverty, he said, "and my view is the whole world is better off when there are fewer poor people."