Putin Lays Out the Next 7 Years
Moscow Times
Monday, May, 19, 2003
By Natalia Yefimova, Staff Writer

In what sounded like an early campaign speech, President Vladimir Putin announced ambitious plans for boosting economic growth and revamping the government -- goals that extend far beyond the 10 months he has left before the presidential election.

Putin used Friday's state of the nation address, the fourth and final one of his term, to sum up the achievements of the past three years and set three impressive objectives to be met by 2010: doubling gross domestic product, eliminating poverty and modernizing the armed forces.

The president also stirred up a political buzz with the kicker at the end of his speech, when he promised to consider forming a Cabinet of party members loosely based on the results of December's parliamentary elections.

As in years past, Putin ticked off a list of achievements followed by the caveat that it is far too early for the government to rest on its laurels.

"Some people think all our problems are solved, that Russia's future is predictable and bright and the only question is whether our economy should grow 4 percent or 6 percent," Putin said. "But ... that is not the case."

The greatest accomplishments, according to Putin, included cleaning out the Augean stables left by his predecessor, improving the economy and strengthening the state.

After years of inaction, the current administration has kick-started reforms of the military, land sales, pensions, natural monopolies and the housing and utilities sector.

Putin praised the progress in creating an independent court system, codifying legislation, improving the electoral system, pushing ahead with tax reform and WTO entry, and achieving political compromise on the Kaliningrad problem. He also hailed the new Labor Code and the success in bringing regional legislation in line with federal law, and tallied up a long list of economic triumphs. (Box, page 3.)

But Putin warned that the country still had a long way to go and remained too dependent on high oil prices.

The catchphrases in the speech were "consolidation" and "working together" with the goal of "reviving" Russia's status as one of the "rich, developed, strong and respected states of the world" -- a goal that depends on economic prosperity.

"Our economic foundation, although it has become notably stronger, nonetheless remains unstable and very weak," he said.

One grandiose goal set by Putin, in addition to doubling GDP, was to achieve full convertibility of the ruble. "For average citizens of our country this will mean, in practice, that when they pack their bags to go somewhere outside of Russia all they will need is their passport and some Russian rubles," he said.

Putin chided the Cabinet for its mediocre work on tax reform and for dragging its feet on administrative reform -- a recurring theme in his addresses since 2000 -- and implied that other political players would be allowed to have their say in overhauling the sluggish, obtrusive and corrupt bureaucracy.

"The Cabinet needs help," Putin said. "Obviously, there needs to be an additional political impulse and this will be forthcoming."

The hourlong speech, interrupted by seven rounds of perfunctory applause, closed off with a passage on political parties and the upcoming parliamentary elections -- without doubt, the section that inspired the most excitement among the audience of lawmakers and government officials. Its highlight was Putin's vague promise to consider forming a "professional, effective Cabinet based on the parliamentary majority," an idea that has been bounced around among pro-Kremlin lawmakers for months.

Putin did not imply that the Cabinet would have proportional representation based on election results, but the idea certainly seemed like an enticing carrot dangling in front of the leading political parties.

Putin praised parliament's "constructive" work, implicitly contrasting it to the intransigence of the State Duma under former President Boris Yeltsin.

But then -- flashing a quick, sly smile -- he called for more transparency of party funding and came crashing down on hypocritical legislators, like liberals who vote for laws the country cannot afford and those who have the audacity to "publicly call businessmen 'robbers' and 'bloodsuckers' while unabashedly lobbying the interests of big companies" -- a clear reference to the Communists and their allies.

Giving a catalogue of the nation's problems, Putin cited grim statistics on rising death rates and shrinking life expectancy, offset slightly by an 18 percent increase in birthrates and a 21 percent drop in infant mortality.

The president also devoted a sizable chunk of his speech to the "sensitive topic" of Chechnya, thanking all those who helped push through the March referendum that sealed the republic's status as part of Russia.

"All of us had to pay a high price to restore Russia's territorial integrity," Putin said somberly. "And we bow our heads in honor of the killed servicemen and civilians of the Chechen republic, all those who paid with their lives to keep the country from being ripped apart."

In something of an about-face, Putin called for an overhaul of the recently passed citizenship legislation developed by his own administration. "We do not need prohibitions and obstacles, we need an effective immigration policy, which will be beneficial for the country and convenient for people, especially for residents of the Commonwealth of Independent States," he said.

Putin complained that the government promises more than it can deliver -- earmarking spending that totals nearly twice the national budget -- and called on the Cabinet to keep tariffs on natural monopolies, such as electricity and railroads, from outpacing incomes.

Placing his primary emphasis on domestic issues, Putin made short shrift of foreign policy. He reiterated that its guiding principle was promoting national interests and stressed the supreme role of the United Nations.

While valuing the U.S.-led anti-terrorism coalition and, in the long term, aiming for "true integration into Europe," Putin said Russia's priority is closer ties with the CIS. "I must be frank: We consider the CIS to be the sphere of our strategic interests," he said.

A glaring omission in the foreign policy section of the speech was Belarus, which had been mentioned in previous addresses. Russia and Belarus pledged earlier this year to deepen economic ties and push ahead with plans for a constitution-like document that would give what is now a largely symbolic union more political weight.

Highlights of the State of the Nation Address

ECONOMY : Gross domestic product, which has grown 20 percent in the past three years, should be doubled by 2010 and the ruble should become fully convertible.

Putin praised the growth of GDP, investment, exports, incomes and consumer spending and the drop in unemployment. He also lauded the 25 percent reduction of foreign debt and the $50 billion increase in reserves, which now total $61 billion.

However, he attributed these successes mainly to the favorable situation on international markets, apparently referring to high oil prices, and criticized government efforts as insufficient.

GOVERNMENT : Russia has a bloated state apparatus that lacks professionalism, Putin said, criticizing the government for stalling on badly needed administrative reform aimed at streamlining the bureaucracy.

He acknowledged the possibility of forming his next Cabinet on the basis of various parties' success in December's parliamentary elections.

CHECHNYA : Putin claimed success in returning Chechnya under the rule of Russian law and keeping it a part of the country. He said lawlessness in the region was coming to an end. The main objectives in Chechnya are to elect a local president and parliament, to work out an agreement delineating powers between Chechnya and Moscow and to restore the republic's economy.

MILITARY : By 2007, the army's permanent combat readiness units should be staffed only by professional soldiers. As of 2008, conscripts will serve in the army for one year instead of two. Professional soldiers will have access to state-paid higher education and other benefits.

Putin asked legislators to allow CIS citizens to serve in the army and to ease citizenship requirements for them.

The army is to be rearmed with modern weaponry, including nuclear and strategic armaments.

FOREIGN POLICY : Foreign policy must be driven by national interests. Putin called for Russia's broader integration with Europe, but said the top foreign policy priority was closer ties with the CIS.

While praising the U.S.-led anti-terrorism coalition, Putin said the United Nations must remain the ultimate international decision-making body.

DEMOGRAPHY : Putin lamented Russia's rising death rate and decreasing life expectancy, which have pushed down the population from 147 million in 1989 to 145 million in 2003. An influx of 7 million migrants, mainly from CIS countries, has made the decline less dramatic than expected.

CITIZENSHIP : Putin called for changes to the current law on migration, which was developed by his administration, saying it set up too many obstacles for former Soviet citizens.

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