Website of the President of Russia: President: Transcripts

Presidential Address to the Federal Assembly

2024-03-01T10:19:00+04:00

Vladimir Putin delivered his Address to the Federal Assembly. The ceremony took place in Gostiny Dvor, Moscow.

President of Russia Vladimir Putin: Senators, State Duma deputies,

Citizens of Russia,

The primary purpose of every Address to the Federal Assembly is to offer a forward-looking perspective. Today, we will discuss not only our short-term plans, but also our strategic objectives and matters which, I believe, are instrumental in ensuring steady long-term development for our country.

This programme of action and the specific measures it includes largely result from my trips to the regions and the conversations I had with workers and engineers at civilian and defence plants, as well as with doctors, teachers, researchers, volunteers, entrepreneurs, large families, with our frontline heroes, volunteers, soldiers and officers of the Russian Armed Forces. Of course, it’s clear that these conversations, these meetings don’t come out of nowhere – they are organised. Still, these exchanges do offer people an opportunity to talk about their pressing needs. Many ideas came from major civil society and expert forums.

The proposals submitted by our people, their aspirations and hopes became the foundation, served as the main pillar of the projects and initiatives that will be also announced today, during this Address. It is my hope that public discussion on these topics will continue, since it is only together that we can fulfil all our plans. In fact, we have major tasks ahead of us.

We have already proven that we can deliver on the most challenging objectives and respond to any challenges, even the most formidable ones. For example, there was a time when we fended off international terrorist aggression and preserved our national unity, preventing our country from being torn into pieces.

We supported our brothers and sisters; we supported their decision to be with Russia, and this year marks the tenth anniversary of the legendary Russian Spring. But even now, the energy, sincerity and courage of its heroes – the people of Crimea, Sevastopol, and the rebellious Donbass – their love for the Motherland, which they carried through generations, naturally makes one proud. This certainly inspires us and strengthens our confidence that we will overcome anything, that we will be able to do anything together.

This is how – all hands on deck – we were able to eliminate the deadly threat of the Covid-19 pandemic just recently. Moreover, by doing that, we also showed the world that values such as compassion, mutual support and solidarity prevail in our society.

And today, when our Motherland is defending its sovereignty and security, defending the lives of our compatriots in Donbass and Novorossiya, our citizens are playing the decisive role in this righteous struggle – their unity and devotion to our country, and our shared responsibility for its future.

They clearly and unequivocally demonstrated these qualities at the very beginning of the special military operation, when it was supported by the absolute majority of Russians. Despite the hardest trials and bitter losses, people have remained adamant in their choice and are reaffirming it by trying to do as much as possible for their country and for the common good.

Russian industries are working in three shifts to roll out as many products as the front needs. The entire economy, which provides the industrial and technological foundation for our victory, has shown flexibility and resilience. I would like to thank every business leader, engineer, worker and farmer for their responsible and hard work in the interests of Russia.

Millions of people have joined the We Are Together campaign and the Russian Popular Front’s project Everything for Victory! Over the past two years, Russian businesses have donated billions of rubles to volunteer organisations and charitable foundations that support our soldiers and their families.

People send letters and parcels, warm clothes and camouflage nets to the front; they donate money from their savings, sometimes very modest. Again, this kind of assistance is invaluable – it is everyone's contribution to the common victory. Our heroes at the frontline, in the trenches, where it is most difficult, know that the whole country is with them.

I would like to acknowledge the Defenders of the Fatherland Foundation, the Committee of the Warriors of the Fatherland Families, and other public associations for their tireless efforts. I urge the authorities at all levels to continue providing unwavering support to the families of our heroes, including their parents, spouses, and children, who anxiously await the safe return of their loved ones.

I am grateful to the parliamentary parties for uniting around national interests. Russia’s political system stands as one of the pillars of our country’s sovereignty. We will continue to advance democratic institutions and resist any external interference in our internal affairs.

The so-called West, with its colonial practices and penchant for inciting ethnic conflicts around the world, not only seeks to impede our progress but also envisions a Russia that is a dependent, declining, and dying space where they can do as they please. In fact, they want to replicate in Russia what they have done in numerous other countries, including Ukraine: sowing discord in our home and weakening us from within. But they were wrong, which has become abundantly clear now that they ran up against the firm resolve and determination of our multi-ethnic people.

Our soldiers and officers – Christians and Muslims, Buddhists and followers of Judaism, people representing different ethnicities, cultures, and regions – proved with their actions which are stronger than a thousand words that the centuries-old cohesion and unity of the people of Russia are a formidable and invincible force. All of them, shoulder to shoulder, are fighting for our shared Motherland.

Together, as citizens of Russia, we will stand united in defence of our freedom and our right to a peaceful and dignified existence. We will chart our own course, to safeguard the continuity of generations, and thus the continuity of historical development, and address the challenges facing the country based on our outlook on the world, our traditions and beliefs, which we will pass down to our children.

Friends,

The defence and the strengthening of sovereignty are going on across the board, primarily, on the frontlines, where our troops are fighting with steadfast and selfless resolve.

I am grateful to everyone who is fighting for the interests of the Fatherland, who endure the crucible of military trials, and put their lives on the line every day. The entire nation has the deepest respect for your feat, mourns the dead, and Russia will always remember its fallen heroes.

(A moment of silence.)

Our Armed Forces have acquired a lot of experience, including in terms of coordinating all the wings of the military, as well as mastering the latest tactics and methods of war. This effort has given us so many talented and seasoned commanders who treasure their men and are diligent in performing their missions, know how to use new equipment and are effective when fulfilling their assignments. I would like to emphasise that this is happening at all levels, from platoons and operations units to the highest command.

We are aware of the challenges we face. They do exist. That being said, we also know what needs to be done to address them. There is an ongoing and unrelenting effort unfolding both along the frontlines and in the rear in this regard in order to improve the striking power of the Army and the Fleet, to make them more tech-savvy and effective.

The Armed Forces have expanded their combat capabilities many-fold. Our units have seized the initiative and will not surrender it. They are confidently advancing in several operational theatres and liberating more territories.

We were not the ones who started the war in Donbass, but, as I have already said many times, we will do everything to put an end to it, eradicate Nazism and fulfil all the objectives of the special military operation, as well as defend sovereignty and ensure that our people are safe.

The strategic nuclear forces are on full combat alert and the ability to use them is assured. We have either already accomplished or are about to accomplish all our plans in terms of weapons in keeping with what I said in my 2018 Address.

Kinzhal, the hypersonic air-launched complex, has not only entered combat duty, but has been effective when carrying out strikes against critical targets during the special military operation. By the same token, Zircon, a ship-based hypersonic missile complex, has already served in combat. It was not even mentioned during the 2018 address, but this missile system has also entered combat duty.

Avangard hypersonic ICBMs, as well as the Peresvet laser complexes have also entered combat duty. Burevestnik, a cruise missile with an unlimited range, is about to complete its testing stage and so is the Poseidon, an unmanned underwater vehicle. These systems have proven that they meet the highest standards and it would not be an exaggeration to say that they offer unique capabilities. Our troops also received the first serially produced Sarmat heavy ballistic missiles. Soon, we will show them to you on their combat alert duty in the areas of their deployment.

Efforts to develop several other new weapons systems continue, and we are expecting to hear even more about the achievements of our researchers and weapons manufacturers.

Russia is ready for dialogue with the United States on issues of strategic stability. However, it is important to clarify that in this case we are dealing with a state whose ruling circles are taking openly hostile actions towards us. So, they seriously intend to discuss strategic security issues with us while simultaneously trying to inflict strategic defeat on Russia on the battlefield, as they themselves say.

Here is a good example of their hypocrisy. They have recently made unfounded allegations, in particular, against Russia, regarding plans to deploy nuclear weapons in space. Such fake narratives, and this story is unequivocally false, are designed to involve us in negotiations on their conditions, which will only benefit the United States.

At the same time, they have blocked our proposal which has been on the table for over 15 years. I am referring to the agreement on preventing the deployment of weapons in outer space, which we drafted back in 2008. There has been zero reaction to it. It is totally unclear what they are talking about.

Therefore, there are reasons to suspect that the current US administration’s professed interest in discussing strategic stability with us is merely demagoguery. They simply want to show to their citizens and the world, especially in the lead-up to the presidential election that they continue to rule the world, that they would talk with the Russians when it will benefit them and that there is nothing to talk about and they will try to inflict defeat on us otherwise. Business as usual, as they say.

But this is unacceptable, of course. Our position is clear: if you want to discuss security and stability issues that are critical for the entire planet, this must be done as a package including, of course, all aspects that have to do with our national interests and have a direct bearing on the security of our country, the security of Russia.

We are also aware of the Western attempts to draw us into an arms race, thereby exhausting us, mirroring the strategy they successfully employed with the Soviet Union in the 1980s. Let me remind you that in 1981–1988, the Soviet Union’s military spending amounted to 13 percent of GDP.

Our current imperative is to bolster our defence industry in such a way as to increase our country’s scientific, technological and industrial capabilities. We must allocate resources as judiciously as possible, fostering an efficient economy for the Armed Forces, and maximising the return on each ruble of our defence spending. It is crucial for us to expedite the resolution of social, demographic, infrastructural and other problems we face while simultaneously advancing the quality of equipment for the Russian Army and Navy.

This primarily applies to general-purpose forces, refining the principles of their organisation and deploying advanced unmanned strike systems, systems of air defence and electronic warfare, reconnaissance and communications, high-precision weapons and other types of weapons to the troops.

We need to shore up the forces in the western strategic theatre in order to counteract the threats posed by NATO’s further eastward expansion, with Sweden and Finland joining the alliance.

The West has provoked conflicts in Ukraine, the Middle East, and other regions around the world while consistently propagating falsehoods. Now they have the audacity to say that Russia harbours intentions of attacking Europe. Can you believe it? We all know that their claims are utterly baseless. And at the same time, they are selecting targets to strike on our territory and contemplating the most efficient means of destruction. Now they have started talking about the possibility of deploying NATO military contingents to Ukraine.

But we remember what happened to those who sent their contingents to the territory of our country once before. Today, any potential aggressors will face far graver consequences. They must grasp that we also have weapons – yes, they know this, as I have just said – capable of striking targets on their territory.

Everything they are inventing now, spooking the world with the threat of a conflict involving nuclear weapons, which potentially means the end of civilisation – don’t they realise this? The problem is that these are people who have never faced profound adversity; they have no conception of the horrors of war. We – even the younger generation of Russians – have endured such trials during the fight against international terrorism in the Caucasus, and now, in the conflict in Ukraine. But they continue to think of this as a kind of action cartoon.

Indeed, just like any other ideology promoting racism, national superiority or exceptionalism, Russophobia is blinding and stupefying. The United States and its satellites have, in fact, dismantled the European security system which has created risks for everyone.

Clearly, a new equal and indivisible security framework must be created in Eurasia in the foreseeable future. We are ready for a substantive discussion on this subject with all countries and associations that may be interested in it. At the same time, I would like to reiterate (I think this is important for everyone) that no enduring international order is possible without a strong and sovereign Russia.

We strive to unite the global majority’s efforts to respond to international challenges, such as turbulent transformation of the world economy, trade, finance, and technology markets, when former monopolies and stereotypes associated with them are collapsing.

For example, in 2028, the BRICS countries, with account taken of the new members, will create about 37 percent of global GDP, while the G7 numbers will fall below 28 percent. These figures are quite telling because the situation was completely different just 10 or 15 years ago. You have heard me say it publicly before. These are the trends, you see. These are the global trends, and there is no escaping them since they are objective reality.

Look, the G7 countries’ share in global GDP in terms of PPP stood at 45.7 percent in 1992, while the BRICS countries (this association did not exist in 1992) accounted for only 16.5 percent. In 2022, though, the G7 accounted for 30.3 percent, while BRICS had 31.5 percent. By 2028, the percentage will shift even more in favour of BRICS, with 36.6 percent, and the projected figure for the G7 is 27.8 percent. There is no getting away from this objective reality, and it will remain that way no matter what happens next, including even in Ukraine.

We will continue to work with friendly countries to create effective and safe logistics corridors, relying on cutting-edge solutions for building a new global financial architecture that would be free from any political interference. This is especially important considering that the West has been undermining its own currencies and banking system by literally sawing off the branch it is sitting on.

The principles of equality and respect for each other’s interests guide us in our interactions with our partners. This is why more and more countries have been proactive in seeking to be part of the activities of the EAEU, the SCO, BRICS and other associations involving Russia. We see a lot of promise in the project to build a Greater Eurasian Partnership and aligning integration processes within the Eurasian Economic Union and China’s Belt and Road Initiative.

There has been positive momentum in Russia’s dialogue with ASEAN. The Russia-Africa summits have been a real breakthrough, with the African continent becoming increasingly assertive in pursuing its interests and enjoying genuine sovereignty. We sincerely support these aspirations.

Russia has long-standing and positive relations with Arab states, which have their own unique and vibrant civilisation spanning across North Africa and the Middle East. It is our belief that we must find new points of convergence with our Arab friends and deepen our partnerships across the board. The same vision will guide our relations with Latin America.

On a separate note, I would like to ask the Government to allocate more funding to international programmes for promoting the Russian language and our multi-ethnic culture, primarily within the CIS space but also across the world.

Incidentally, friends and colleagues, I am sure that many of you have been to the Russia exhibition. People go there to see how rich and vast our homeland is and to show this to their children. The Year of the Family has been launched there. The values of love, mutual support and trust are handed down from generation to generation, just like our culture, traditions, history, and moral principles.

But the main purpose of the family is to have children, to procreate, to bring up children and hence to ensure the survival of our multi-ethnic nation. We can see what is taking place in some countries where moral standards and the family are being deliberately destroyed and entire nations are pushed to extinction and decadence. We have chosen life. Russia has been and remains a stronghold of the traditional values on which human civilisation stands. Our choice is supported by the majority of people in the world, including millions in Western countries.

True, today birth rates are declining in Russia and many other countries. Demographers say that this challenge is related to changes in social, economic, technological, cultural and value perceptions throughout the world. Young people get an education, try to make a career, and improve their living conditions, leaving children for later.

It is obvious that the economy and the quality of the social sector are not the only factors affecting demography and the birth rate. The life choices encouraged in the family and by our culture and education also have a tremendous impact. All levels of government, civil society, and the clergy of all our traditional religions must contribute to this.

Support for families with children is our fundamental moral choice. A multi-child family must become a norm, the underlying social philosophy, and the focus of state strategy. (Applause.) I join your applause.

We must ensure sustainable growth in the birth rate within the next six years. With this aim in view, we will make additional decisions regarding the education system as well as regional and economic development. I will speak about supporting families and improving the quality of their lives in nearly all parts of the Address. Pease bear with me, for I have barely started. Everything I have already said is important too, but now I will speak about the most important issues.

I will begin with a major issue, to put it mildly, which is the low incomes experienced by many large families. In 2000, more than 42 million Russians lived below the poverty line, but the situation has changed dramatically since then. As of the end of last year, the number of people living below the poverty line declined to 13.5 million which is also a lot, though. But we are constantly focused on finding a solution to this problem.

A number of measures have been adopted relatively recently. For example, a single monthly allowance for low-income families was introduced on January 1, 2023. It is payable from the time a mother becomes pregnant until the child reaches 17 years of age. Last year, more than 11 million people received it.

We have drastically simplified the procedure for concluding a social contract, prioritising large families. Now, an application for a social contract can be submitted through the Gosuslugi (government services) website with a minimum set of documents. We will work to expand the availability of this service, which will require extra funding to the tune of 100 billion rubles. This money has already been set aside. In general, all the additional spending I am going to mention has been budgeted.

To reiterate, poverty remains an acute problem which now directly affects more than 9 percent of the population. According to experts, the poverty rate among families with many children is about 30 percent. We must set clear goals and consistently achieve them. By 2030, the overall poverty rate in Russia must be below 7 percent, and for large families, it must be no more than 12 percent, or less than half of today’s 30 percent. That is, we must place special emphasis on the effort to reduce poverty, first and foremost for families with many children.

I know that overcoming poverty is not easy and is an absolutely systemic and multi-vector effort. So, to reiterate, it is important to make sure that everything we do in this area, and every tool we use, is effective and efficient and produces tangible real results for our people and our families.

What we need is an uninterrupted effort aimed at improving the quality of life of families with children and supporting the birth rate. To achieve this goal, we will launch a new national project titled “Family.”

I will now talk about a number of specific initiatives.

First, in addition to federal programmes, Russian regions are implementing their own measures to support families with children. Above all, I would like to thank my colleagues for this work and propose providing additional assistance to the regions where the birth rate is below the national average. This is especially important for central and northwestern Russia. In 2022, 39 regions had a total fertility rate below the national average. By the end of 2030, we will channel at least 75 billion rubles to these regions so that they can increase their family support programmes. The funds will begin to be disbursed next year.

Second, last year, more than 110 million square metres of housing were built in Russia, or 50 percent more than the highest Soviet-era level, which was achieved in 1987. At that time, 72.8 million square metres were built, and now, the result is 110 million.

More importantly, over the past six years, millions of Russian families have moved to bigger or better housing; over 900,000 of them took advantage of the family mortgage programme – the one launched in 2018, for reference. We have been steadily expanding eligibility for this programme over time, from families with two or more children, to families with one child today. The programme will continue until July 2024. I propose further extending it until 2030 while maintaining its basic parameters. Particular attention should be paid to families with children under six; the preferential loan interest rate will remain at six percent for such families.

There is something else. The government currently subsidises 450,000 rubles of a family’s mortgage when they have a third child. I also propose extending this measure until 2030. This year, this support plan will require almost 50 billion rubles; the amount will increase further, but we have the money for this.

Our wider goal is to make the housing that is now under construction more affordable for families, and to ensure a system-wide renewal of the housing stock in the country.

Third, there are over two million families in Russia with three or more children. It goes without saying that we are very proud of these families.

Here is what I wanted to say in this regard. Look at these numbers – these are real-world figures. Between 2018 and 2022, the number of families with many children in Russia increased by 26.8 percent, which is a positive result.

I signed an executive order creating a single national status for families with many children. This is what people have been asking for. We must follow up on its provisions by taking concrete federal and regional decisions in keeping with people’s aspirations, of course.

Families with many children have so many matters they have to take care of, so parents must have more resources on hand to deal with their everyday challenges. I suggest doubling the tax deduction parents get when having their second child to 2,800 rubles per month and increasing this benefit for the third and every consecutive child to 6,000 rubles.

What does this mean? Let me give you an example: this will enable a family with three children to save 1,300 rubles per month. I also suggest increasing the annual income counted towards this deduction from 350,000 to 450,000 rubles. And this support measure must apply automatically without people having to apply for it.

On a separate note, I would like to mention the maternity capital benefit. Today, parents can receive 630,000 rubles when their first child is born, and when the second one arrives, the family gets another 202,000 rubles. We have regularly adjusted this benefit for inflation. For now, the maternity capital programme is set to expire by early 2026, but I suggest extending it until at least 2030.

Colleagues,

I would like to thank charity foundations and community service non-profits which are helping the elderly, people suffering from various diseases and children with disabilities. They have done a great deal to raise the issue of long-term care at the national level. They were the ones who constantly raised these issues.

I believe that we need to allocate more federal funding to this system and follow a single high standard of care. This includes improving its availability for about half a million Russians who are most in need of this kind of assistance.

By 2030, we need to make sure that 100 percent of the people who need this kind of long-term care can benefit from it.

Presently the average life expectancy in Russia has exceeded 73 years. We have returned to the level we were at before the COVID-19 pandemic. By 2030, life expectancy in Russia should be at least 78 years, and in the future, as we planned, we will reach the level of 80 plus.

Particular attention should be paid to rural areas and regions where life expectancy is still lower than the average in Russia. The Long and Active Life national project will focus on achieving these objectives. It is especially important to prolong the healthy and active period in a person’s life, so that he or she can enjoy family activities, be with loved ones, children, and grandchildren.

We will continue to implement federal projects to combat cardiovascular diseases, cancer, and diabetes.

Furthermore, I propose launching a new comprehensive programme to protect motherhood and help children and adolescents maintain good health, including their reproductive health, ensuring that children are born healthy and grow up to be healthy adults, and produce healthy children in the future.

The new programme’s priorities should include expanding the national network of women’s health clinics and upgrading perinatal centres, children’s clinics and hospitals. In total, in the next six years we will additionally allocate more than a trillion rubles for the construction, repair, and equipping of healthcare facilities alone.

Next. The number of Russians who engage in sports activities on a regular basis has increased significantly in recent years. This is one of our major achievements. We need to encourage people who take responsibility for their own health. As early as next year, we will introduce tax deductions for those who regularly undergo scheduled medical examinations, as well as successfully pass the standard GTO physical fitness test.

Do you remember this popular slogan? Everyone remembers that joke: “Stop drinking – start skiing!” Appears to be the case, the time is now. By the way, on the subject of drinking, we have achieved a noticeable, positive result. In fact, we have significantly reduced the consumption of alcohol, primarily strong alcohol, without imposing any extreme restrictions, which should certainly improve the health of the nation.

I suggest channelling federal money into building at least 350 additional sports facilities every year in the regions, primarily in small towns and rural areas. This could include multi-purpose venues, as well as structures that can be erected quickly to be used by children, adults, and families. We will allocate some 65 billion rubles in federal money to this effect over the next six years.

Universities, vocational colleges, schools, and preschool institutions must also create conditions for doing sports. By the way, many of our kindergartens opened back in the Soviet era and need refurbishing. Next year, we will launch a major renovation programme for them. I have been hearing about this issue from the people I talk to all the time.

As for the schools, about 18,500 buildings need major repairs. We will help the regions deal with their backlog of issues in this sector so that they can switch from urgent to planned repairs. Judging by what has been achieved so far, we are on the right track. Overall, we will allocate over 400 billion rubles for undertaking major repairs at kindergartens and schools.

In addition to this, I propose renovating or opening medical rooms in schools that are in need of this type of service. Today, I mean in 2022–2023, only 65 percent out of 39,000 schools we have (and we have 39,440 schools in total), had medical facilities, which means that we have room for improvement here.

There is another important topic. Many big cities are rapidly expanding, which in turn increases the burden on their social services. Many schools have had to switch to double or even triple shifts. Of course, this is a challenge and we must deal with it. We will have to engage federal resources for resolving this issue by building at least 150 schools and over 100 kindergartens in the worst-affected cities facing overcrowded educational institutions.

Colleagues,

The dreams and accomplishments of our ancestors are within our reach and we can take pride in these achievements, while it is the aspirations of our younger generation that will determine the future of our country. Their coming-of-age, their successes, their moral guidelines, which can stand up to any challenge, are the most important guarantees of Russia’s sovereignty and the continuation of our history.

I propose consolidating the positive experience we have achieved with our youth policy and launching a new national project this year, the Youth of Russia. This project should focus on our country’s future and work towards that future. This is what our schoolteachers see as their calling, their grand mission, as they realise that they are responsible for younger generations, and we are grateful to them for their selfless work.

Mentors play a major role in making children feel like they are part of a united team and in providing them support in life. I propose establishing a 5,000 ruble monthly federal benefit for advisors to directors who consult them on child development at schools and colleges, with a launch date of September 1, 2024. This will be a new support measure. I also propose we implement support measure for class teachers at schools, as well as for group supervisors, both at colleges and technical schools, in communities with a population of less than 100,000 people. Such communities need special attention, and in fact, most small towns and villages across Russia fall in this category. So, from March 1, 2024, I propose doubling the federal payment for classroom management and group supervision to eligible education workers to 10,000 rubles.

There is one more thing I would like to add. In 2018, the May executive orders set forth the requirements for the remuneration of teachers and other public sector employees based on an average monthly income from employment in a particular region of Russia. These provisions of the so-called May executive orders must continue to be strictly adhered to. At the same time, we need to improve the system of remuneration in the public sector and to boost the incomes of its employees.

The average pay in the economy differs from region to region, which means that people’s incomes in the public sector are sometimes widely different even in neighbouring entities of the federation. But the jobs of teachers and doctors are difficult and demand that they accept extreme responsibility no matter where they are. Without question, this large difference in salaries between regions is unjust.

I know that it is an old, complicated, and capital-intensive issue, if I may address it this way. I have discussed this with my colleagues from federal agencies, the heads of regions, teachers, doctors, and other professionals. And it is clear we must do something about it.

I will not go into detail now, but it is most certainly a complicated matter. The members of parliament and the Government know what I am talking about. I ask the Government to coordinate in 2025 a new system of payment for public sector employees within existing pilot projects in the regions and to adopt a final decision for the country as a whole in 2026.

A separate issue has to do with creating additional incentives for attracting young professionals to schools where they will see professional and career opportunities. Towards this end, we will approve targeted allocations of over 9 billion rubles from the federal budget for improving the infrastructure of teacher training universities.

Our system of school education has always been famous for its innovative teachers and unique teaching methods. It is teams of such teachers that will take part in creating forward-looking schools. The construction of the first leadership schools of this kind will begin this year in the Ryazan, Pskov, Belgorod, Nizhny Novgorod, and Novgorod regions. They will subsequently be built in all the federal districts, in the Far East, Siberia, and Donbass. Overall, we will open 12 such schools by 2030.

As for educational content, the workload of our children must be reasonable and balanced. And it is definitely not good when children are taught one thing during lessons and asked completely different things during exams. This discrepancy, to put it mildly, between the curriculum and the questions asked during exams, which regrettably happens, is forcing parents to hire private tutors, which not every family can afford. I ask our colleagues in the Government to work together with teachers and parents to settle this most-evident problem.

In this connection I would like to say a few words about the Unified State Exam. which is a matter of broad public discussion and debate, as we all know. It is true that the mechanism of the unified exam must be improved.

What do I suggest at this stage? I propose taking one more step by giving high school graduates a second chance. In particular, they will have an option to re-sit an examination in one of the unified exam subjects before the university enrolment period ends so that they can resubmit their new grades. Such matters may seem mundane, but they are in fact quite important to the people.

Colleagues,

Last year, Russia's economy grew faster than the world economy, and we outperformed not only the leading EU countries, but all G7 economies as well. Here is what I would like to note in this regard: the massive reserves created over the past decades have had much to do with that.

The share of non-commodity industries in the growth structure now stands at well over 90 percent, which means that the economy has become more complex and technological, and thus, much more sustainable. Russia is Europe's largest economy in terms of gross domestic product and purchasing power parity, and the world’s fifth largest economy.

The pace and, most importantly, the quality of growth make it possible to hope and even assert that we will be able to take another step forward in the near future and become the world’s fourth largest economy. This kind of growth should have a direct effect on household incomes.

The share of wages in the national GDP should increase within the next six years. We are adjusting the minimum wage ahead of inflation rates and average wage growth rates in the economy. Starting in 2020, the minimum wage has increased by 50 percent from 12,000 to 19,000 rubles per month. By 2030, the minimum wage will have almost doubled to 35,000 rubles, which will certainly make a difference in the number of social benefits and salaries in the public and economic sectors.

We are aware of the risks and factors that may lead to a slowdown in economic growth and our progress in general. These include, primarily, shortages in skilled personnel and our own advanced technology and even total lack of it in some areas. We need to be proactive in this regard, so I will discuss these two strategically important topics in detail today.

I will start with personnel. Russia has a large young generation. Strangely enough, we are facing demographic issues related to population growth, but still have a fairly large young generation. In 2030, this country will have 8.3 million people aged 20 to 24, and 9.7 million, or 2.4 million more than now, in 2035. Without a doubt, this is the result of the demographic measures in previous years, among other things.

Importantly, today's teenagers should become professionals primed to work in the economy of the 21^st century. This is the focus of the new Personnel national project.

We have been discussing this a lot, but we really need to strengthen the link between all levels of education from school to university. They should work as one for a common result. Of course, the involvement of future employers is important. A career guidance system has been launched in all schools nationwide this year. Sixth-graders and up can get familiar with different specialties.

I am now urging the heads of enterprises, research and medical centres to encourage schoolchildren to visit them. Let them see the workshops, like I was offered to do during one of my trips, the museums, and laboratories. Please make sure to join in this effort.

Promoting close cooperation between educational institutions and the real economy has guided us in the Professionalitet project for promoting vocational training. It enabled us to update educational programmes for the aviation, shipbuilding, pharmaceutical, electronics, and defence industries, among others.

We will have to train about a million highly skilled workers for these sectors by 2028, while making sure that the vocational training system as a whole transitions to these approaches, including in terms of developing human resources for schools, hospitals, outpatient clinics, the services sector, tourism, cultural institutions and creative industries.

On a separate note, I am instructing the Government to work with the regions on a programme to refurbish and equip vocational training institutions. This effort must go beyond renovating educational facilities and also cover athletic facilities, as well as student dormitories serving these vocational training schools and colleges. We will allocate 120 billion rubles in federal funding for these purposes over the next six-year period.

We will also spend an additional 124 billion rubles to carry out major repairs at about 800 university dormitories over the next six years.

As for higher education in general, our task is to develop research and educational centres all across our country. For that, we will build 25 university campuses by 2030. We have already discussed this but it bears repeating. I suggest that we expand this programme to build at least 40 student campuses of that kind.

To do so, we will have to allocate some 400 billion rubles from the federal budget in order to ensure that students, post-graduates, faculty members and young families have all they need to study, work and bring up their children.

Overall, we must sift through all the different situations young mothers or young parents face in their lives and use this information to fine-tune and improve public services, the social sector, healthcare, as well as urban and rural infrastructure. I am asking the Government and the region to take due care when working on this agenda.

Moving on, in last year’s Address, I announced major changes in the way our higher education system operates and talked about the need to use best national practices. The foundation of future success in a profession is laid in the first years of university, when core subjects are taught. I believe that we need to offer those who teach these subjects higher salaries. Therefore, I am asking the Government to suggest specific modalities for making this happen and launch a pilot project beginning September 1.

This will require additional resources. According to preliminary estimates, this would amount to about 1.5 billion this year and 4.5 billion down the road. We have factored these amounts into our projections.

It is important for us to bolster the capabilities and quality of the national higher education system, to support universities that are striving for development. These targets are being met by our Priority 2030 programme. The funding for this has been allocated through the end of this year. I certainly propose extending it for another six years and allocating an additional 190 billion rubles.

The efficiency criteria for participating universities should include personnel and technology projects with Russia’s regions, industries and social sector, the creation of effective innovative companies and start-ups, and the ability to attract foreign students. In addition, we will certainly assess all Russian universities, colleges, and technical schools by the demand for their graduates from the labour market and their pay growth.

Friends,

I would like to say a few words about the technological foundation for development, and here, science is certainly the cornerstone. At a meeting with scientists from the Russian Academy of Sciences, which marked its 300^th anniversary this year, I said that, even during the most difficult periods, Russia has never given up on addressing its fundamental imperatives, has always thought about the future, and we must do the same now. As a matter of fact, we are trying to do exactly that.

For example, no other country in the world has such a range of mega-science facilities as Russia has today. These centres provide unique opportunities for our scientists and for our partners, researchers from other countries, whom we invite for collaboration.

Russia’s scientific infrastructure is our strong competitive advantage, both in the context of fundamental research and in creating innovations for pharmaceuticals, biology, medicine, microelectronics, chemicals, and new materials, as well as for space programmes.

I believe that we should more than double the total public and private investment in research and development, to as much as two percent of GDP by 2030. This should secure Russia’s place as one of the world’s leading scientific powers.

I would like to reiterate that private business should simultaneously increase investment in science, at least doubling the current programmes by 2030. It is understood that these funds should be spent effectively, should be instrumental in achieving a specific result in each specific research project. In this regard, we need to use the positive experience of our federal research programmes in genetics and agriculture, as well as projects promoted by the Russian Science Foundation.

In light of the current goals and challenges, we have adjusted Russia’s Strategy for Scientific and Technological Development which we use as a starting point to launch new technological sovereignty national projects. I will give you a list of the main areas.

First, we must be independent and own all the technological keys in sensitive areas, such as safeguarding public health and ensuring food security.

Second, we need to attain technological sovereignty in critical spheres that determine the resilience of our economy in general, such as means of production and machine tools, robotics, all modes of transport, unmanned aerial, underwater and other systems, data economy, innovative materials and chemistry.

Third, we must create globally competitive products relying on unique domestic innovations, including space, nuclear and new energy technologies. We must start working now to create a legal environment that fosters industries and markets of the future, to generate long-term demand − at least through the end of the current decade − for high-tech products so that companies have consistent rules to play by.

It is also imperative to establish internal cooperative chains and international technological platforms, to launch serial production of our own equipment and components, and to guide geological exploration towards the search for rare-earth materials and other raw materials for the new economy. We have all this.

To reiterate, we are talking about a strategic foothold for the future, so let us use all available development tools and mechanisms to achieve these objectives, and to ensure priority budget financing. I urge the Government and the Federal Assembly to be mindful of this when drafting the budget. Please always treat this as a top priority.

Technological sovereignty projects should become an engine to renew our industry and help the entire economy reach an advanced level of efficiency and competitiveness. I propose setting the goal of increasing the share of domestic high-tech goods and services on the domestic market by 150 percent within the next six years, and increasing the volume of non-commodity and non-energy exports by at least two-thirds.

I will cite a few more figures. In 1999, the share of imports in our country reached 26 percent of GDP meaning that imports accounted for almost 30 percent of our market. Last year, it was 19 percent of GDP, or 32 trillion rubles. Before 2030, we need to reach a level of imports of no more than 17 percent of GDP.

This means that we must produce ourselves many more consumer and other goods, including medicine, equipment, machine tools, and vehicles. We are unable to produce everything, and we do not need to, but the Government knows what it needs to work on.

I would like to point out that in the next six years the gross added value in manufacturing should increase by at least 40 percent compared to 2022. This accelerated industrial development implies the creation of thousands of new enterprises and modern highly paid jobs.

We have already prepared an industrial “menu” of sorts. The companies that implement industrial projects will be able to choose suitable support measures, agreements on investment protection and incentives, special investment contracts, a cluster investment platform, and the like. We have devised and are already implementing a great deal of such instruments. And we will further develop these mechanisms.

In the next six years, we will additionally allocate 120 billion rubles to subsidise corporate R&D projects and to bolster the system of industrial mortgages. We will also use this programme to additionally build and renovate over 10 million square metres of industrial floorspace.

I would like to add the following for the sake of comparison, in addition to the pace we have already achieved.

So, let’s draw some comparisons. Today, in Russia we build about four million square metres of industrial floorspace every year. It is a substantial indicator of the modernisation of our industrial capacities as it is, and we will additionally build 10 million square metres, as I have stated.

Next, we will invest 300 billion rubles in the Industrial Development Fund. We will almost double its capital and will focus its attention on supporting high-tech projects. At least 200 billion rubles will be additionally allocated within the framework of a cluster innovation platform to subsidise interest rates for projects that manufacture prioritised industrial products.

I propose increasing the depreciation calculation base to stimulate the modernisation of industrial facilities in the manufacturing sector. It will amount to 200 percent of spending on Russian-made equipment and R&D. It may sound boring, but I will explain what it means. If a company buys Russian-made lathes for 10 billion rubles, it can reduce its tax base by 20 million rubles. It amounts to substantial assistance.

We will continue to develop industrial technology parks focused on small and medium-sized companies in the priority technological spheres. It is important to make use of the advantages of the cluster approach, when companies grow together with their subcontractors and suppliers, and their cooperation will have a beneficial effect on all parties. I would like to point out to the Government that we must create at least 100 such platforms by 2030. They will act as growth points throughout the national territory and encourage investment.

We have set a goal to add 70 percent to investment in key sectors by 2030. By the way, we have had good dynamics here; very good, I would say in fact. Good.

In 2021, the cumulative growth of investment was 8.6 percent, against a target of 4.5 percent. In 2022, it was 15.9 percent, with a target of 9.5 percent. In the first nine months of 2023, the increase was 26.6 percent, when the plan for the year was 15.1 percent. We must continue to move ahead of the plan.

Our banking system and the stock market must fully ensure the influx of capital into the economy, into the real sector, including through project and equity financing. In the next two years, industrial projects worth more than 200 billion rubles will be supported through equity funds. Essentially, this means that the VEB.RF Development Corporation and several commercial banks will join the share capital of high-tech companies and assist them during the most active growth phase.

I have already issued instructions to introduce a special IPO regime for companies in priority high-tech industries. I would like to point out to my colleagues in the Finance Ministry and the Central Bank that we need to expedite the launch of this mechanism, including compensation for the company’s costs associated with floating securities. This needs to be done without delay.

Again, the Russian stock market needs to play a bigger role as a source of investment. Its capitalisation should double by 2030, from the current level to 66 percent of GDP. At the same time, it is important that individuals have the opportunity to contribute to the nation’s development while also benefiting from investing their savings in low risk projects.

A decision has already been made: voluntary investment in non-state pension funds of up to 2.8 million rubles will be insured by the state, which means a return is guaranteed.

In addition, long-term individual investment accounts will be insured up to 1.4 million rubles. We will extend the unified tax deduction to individual investments in long-term financial instruments up to 400,000 rubles per year.

At the same time, I deem it expedient to launch a new tool known as a savings certificate. By purchasing this product, individuals will deposit their savings in banks for more than three years. The certificate will be irrevocable; therefore, banks will offer their clients a more attractive interest rate. In addition, the holders of savings certificates will have their money insured by the state up to 2.8 million rubles, which is twice as much as regular bank deposit insurance.

I would like to emphasise that all the measures of state support for investment, and the creation and modernisation of industrial facilities, should lead to higher salaries and better working conditions, and social packages for employees.

Of course, as a matter of principle, Russian companies must operate within our national jurisdiction and refrain from moving their funds abroad where, as it turns out, you can lose everything. So now, my colleagues from the business community and I have to hold brainstorming sessions for coming up with ways to help them get their money back. Do not transfer your money there in the first place. This way, we will not have to figure out how to recover it.

Russian businesses must invest their resources in Russia, its regions, in developing companies and staff training. Our strong and sovereign country offers them unrivalled protection for their assets and capital.

An overwhelming majority of business leaders prioritise national interests and are patriots. Therefore, businesses working here in Russia must benefit from the guaranteed inviolability of their property, assets, and new investments. Of course, domestic investment and protecting investment go hand in hand with defending the rights of business owners, and it is our job to make this a reality. This will serve our national interests and society at large, as well as the millions of people who work for private companies, whether they’re large corporations or SMEs.

I have been saying this all along, but let me repeat it: no one, no government official or law enforcement officer, has the right to harass people, break the law or use it for personal, selfish objectives. We must be there for people, for our business owners – I am talking about them right now. They are the ones creating jobs, giving people work and paying their salaries. Being there for others and helping them is what the mission of the government is all about.

Colleagues,

Small and medium-sized enterprises are playing an increasingly important role in driving economic growth. Today, they account for over 21 percent of the manufacturing, tourism, and IT sectors. Hundreds of Russian brands have demonstrated outstanding results. Last year, there were 1.2 million new SMEs registered in Russia.

Let me draw your attention to the fact that this is a five-year high. People want to start their own businesses and believe in themselves, their country, and their success. I would like to emphasise that the number of young entrepreneurs under 25 years old increased by 20 percent in 2023. There are now over 240,000 of them.

We need to make sure to support these creative and result-driven undertakings in order to ensure that the average income for SME workers outpaces GDP growth over the next six years. This means that these businesses must enhance their efficiency and make a qualitative leap forward in their performance.

I have already said that we must eliminate situations where expanding operations becomes a losing proposition for companies because they have to switch from a streamlined tax framework with its beneficial rates to a general tax regime. When this happens it means that the state is basically promoting corporate fragmentation or compelling businesses to use other means for optimising their tax liabilities.

I am asking the Government to work with the parliamentarians on the terms of an amnesty for SMEs which had no other option than to rely on tax optimisation schemes as they expanded their operations.

Importantly, these companies should steer clear of the practice of artificial, essentially fraudulent, splitting of businesses, and embrace civilised and transparent operations. To reiterate, there will be no fines, no penalties, no sanctions, no recomputation of taxes for the earlier periods. This is what the amnesty is all about.

In addition, I hereby instruct the Government to introduce a mechanism for a gradual – not abrupt – increase in the tax burden for companies that are transitioning from the simplified to the general taxation procedure starting next year.

Next, we decided to introduce a temporary moratorium on inspections. This measure has fully justified itself. Companies that guarantee the quality of their products and services and act responsibly with regard to their consumers can and should enjoy our trust.

So, from January 1, 2025, I believe we can rescind temporary moratoriums on business inspections and instead, building on our experience, fully switch to a risk-based approach and enshrine it in the law. If there are no risks, we should use preventive measures and thus minimise the number of inspections.

There is more. I propose granting special credit holidays of up to six months once every five years to small and medium-sized businesses, without impacting their credit history.

Again, we must create proper conditions for small and medium-sized companies to grow dynamically, and to enhance the quality of this growth through high-tech forms of manufacturing. In general, the taxation regime for small and medium-sized manufacturing companies should be relaxed.

I urge the Government to make specific proposals in this regard. We have discussed this many times. Please do that. The proposals have been articulated, in fact.

I would like to emphasise the work of small and medium-sized businesses in rural areas, in the agriculture sector. We are now fully self-sufficient in terms of food, and Russia is the leader on the global wheat market. We are among the top 20 food exporters. I thank agricultural workers, farmers, and specialists engaged in agriculture in general for their impressive performance.

By 2030, the output of the Russian agro-industrial complex should grow by at least a quarter compared to 2021, and exports should increase by 50 percent. We will definitely continue to support the sector and the programme of integrated rural development, including renovation and modernisation of post offices.

We will use a special solution for the development of coastal regions. Let me remind you that we have a “quota for the keel” rule. It must be strictly followed. As some of you here are aware, we are talking about the companies obtaining quotas for seafood production against an obligation to buy new Russian-made fishing vessels and renew the fleet.

At the same time, this year the federal budget received a substantial amount of money – about 200 billion rubles – from selling seafood quotas. Mr Siluanov is here, and we have arrived at an agreement. I propose that part of these funds be earmarked for the social development of municipalities, which form the basis of our fishing industry.

Colleagues,

In today’s conditions, increasing efficiency in all spheres of labour productivity is directly connected with digitalisation and the use of AI technology, as I said. Such solutions enable us to create digital platforms for streamlining interaction between people, businesses and the state in the best possible way.

So, we need to create a platform that will help people use the capabilities of our healthcare system to keep their health in check and remain healthy throughout their life. For example, they will be able to use data from their digital identities to remotely request and receive advice from specialists at federal medical centres, and general practitioners will be able to form a comprehensive picture of a patient’s health, forecast possible illnesses, prevent complications, and choose individual, and thus, more effective treatment.

Everything I am saying is not a picture of a distant future. These practices are being introduced at our leading medical centres today. The goal is to apply them throughout the country and make them accessible to all.

I believe that by 2030 we must formulate digital platforms in every major economic sector and in the social sphere. These and other comprehensive tasks will be addressed within the framework of the new national project The Economy of Data. We will allocate at least 700 billion rubles to implement it in the next six years.

Such technologies and integration platforms offer great opportunities for the economic planning and development of individual sectors, regions, and cities, as well as for the efficient management of our programmes and national projects. The most important thing is that we can continue to focus the efforts of all levels of government on the interests of every individual and every family, and to proactively provide state and municipal services to our people and businesses in a convenient form and as quickly as possible.

Russia is actually one of the world leaders in digital government services already. Many countries, including European ones, have yet to reach our level. But we have no intention of slowing down.

Artificial intelligence is an important element of digital platforms. Here, too, Russia must be self-sufficient and competitive. An executive order has already been signed approving the updated version of the National Strategy for the Development of Artificial Intelligence. The document sets new goals, including the need to ensure technological sovereignty in such revolutionary fields as generative artificial intelligence and large language models. Practical application of such systems promises to produce a real breakthrough in the economy and social sphere, and so it shall. For this we need to increase our computing resources. By 2030, the total capacity of domestic supercomputers should be at least 10 times greater. This is a completely realistic goal.

We need to upgrade the entire infrastructure of the data economy. I would like to ask the Government to propose specific measures to support companies and start-ups that manufacture data storage and processing equipment and develop software. Investment in domestic IT should grow at least twice as fast as overall economic growth.

Conditions need to be created to allow Russians to take advantage of digital technology not only in megacities, but also in smaller towns, in rural communities and in remote areas, along federal and regional thoroughfares, as well as local roads. I am referring to the need to provide access to high-speed internet almost everywhere in Russia within the next decade. To address this task, we will need to considerably expand our satellite constellation, for which we will be allocating 116 billion rubles.

Colleagues,

At this point, I would like to dwell on regional development. What are my suggestions on this matter? Our priority is to lower the debt burden of the Russian regions. I believe that we must write off two thirds of the debt regions owe under so-called budget loans. According to our projections, this will allow them to save about 200 billion rubles annually between 2025 and 2028.

Let me draw your attention to the fact that these savings must be used for a specific purpose – the regions should channel them into support for investment and infrastructure projects. Colleagues, I would like to draw your attention to this point.

Moving on, in 2021, we launched a programme worth 500 billion rubles to issue infrastructure budget loans and went on to expand it to one trillion rubles. As you remember, the regions benefit from a 3 percent interest rate on these loans with a term of up to 15 years. What a great development tool. These funds go towards development projects, and the regions have appreciated this mechanism for its effectiveness. There will be no write-offs for these loans, but this year the regions will start repaying them. I suggest re-investing the money they return to the federal budget in the regions by issuing new infrastructure budget loans. Overall, we will expand our infrastructure loan portfolio for Russia’s regions starting in 2025 by at least 250 billion rubles per year.

I also believe that the regions must have more leverage when it comes to managing the funds at their disposal for fulfilling national projects.

Let me give you an example: a region upgrades an outpatient clinic and does a good job refurbishing it. If it did not spend all the funds allocated for this, it would not have to return the remainder to the federal budget. Instead, it can use them to buy equipment for the renovated clinic or for other purposes.

Of course, we will support the regions to enable them to unlock their potential by launching projects in the real economy and infrastructure development as development drivers for these territories.

Today, ten regions of the Federation that have low fiscal capacity are carrying out tailor-made socioeconomic development programmes. I am asking the Government to renew these programmes for another six-year term.

By 2030, all our regions must achieve economic self-sufficiency. Let me repeat that this is a matter of justice and offering people equal opportunities, as well as guaranteeing high living standards across the country.

Colleagues,

As you can see, big plans call for big spending. Large-scale social, demographic and economic investments will be made, as well as science, technology, and infrastructure investments.

In this regard, I would like to discuss the taxation system. It goes without saying that it must ensure the flow of resources to address national goals and to implement regional programmes. It is designed to reduce inequality not only in society, but in the socioeconomic development of the constituent entities of the Federation as well, and to take into account individual incomes and corporate revenues.

I suggest developing approaches to modernising the fiscal system and more fairly distributing the tax burden towards those with higher individual incomes and corporate revenues.

Conversely, we need to reduce the tax burden on families, including through deductions, which I mentioned earlier today. We need to incentivise businesses that invest in growth and in infrastructure and social projects. It is likewise important to close loopholes that are used by some companies to avoid taxes or underreport their taxable revenue. I urge the State Duma and the Government to submit a specific set of proposals to address these matters soon. In the future, taking into account the adopted changes, I propose locking in key tax parameters until 2030 to ensure a stable and predictable environment for implementing any, including long-term, investment projects. This is what the business community is asking for during our direct contacts.

Colleagues,

Decisions regarding financial support for the regions and economic growth should be designed to improve the quality of life in all constituent entities of the Federation. We have already renewed until 2030 special programmes for the development of the regions such as the North Caucasus and the Kaliningrad Region, Donbass and Novorossiya, Crimea and Sevastopol, the Arctic and the Far East. Master development plans have been drafted for 22 Far Eastern cities and metropolitan areas, and the same work is underway for Arctic communities.

Now we have to take the next step. I propose making a new list of more than 200 cities and towns, with a master plan to be developed and implemented for each of them. Overall, the development programme should span about 2,000 communities, including villages and small towns. Every policy to support the regions that I mentioned today, including infrastructure loans, should apply in these cases.

I would like to address the heads of the regions now. These resources should be used, among other things, to expand the capabilities of the municipalities. I remember meeting with the heads of some municipalities at their forum here in Moscow. The local level of government has a special role and responsibility. It includes the agencies and bodies where Russians go with their daily needs. I would like to thank our mayors, heads of districts, and local deputies for their work, for their attention to people’s needs. And I would like to specially recognise the staff of the municipalities working in the immediate vicinity of the combat zone and sharing all the adversities with the local residents.

Local residents should in fact be co-creators of their local urban development plans. Municipalities need to step up the use of mechanisms where residents can vote for projects, facilities or problems that require priority financing. I propose increasing the federal and regional co-financing of people’s projects like this.

We will also extend, until 2030, the national competition for best projects to create a comfortable urban environment in small towns and historical communities.

In total, we will improve more than 30,000 public spaces in Russia in the next six years. I would like to ask the Government to provide additional support to the regions that are renovating local embankments, parks, gardens and historical downtown areas. We will allocate 360 billion rubles for major landscaping and improvement projects like this.

Old buildings, estates and churches are the visible embodiment of our national identity, an inextricable link between generations. I would like to ask the Government, parliament and relevant State Council commissions to involve the public and review the regulatory framework for the protection and use of cultural heritage sites. Any obviously redundant or contradictory requirements need to be eliminated. In some cases, a piece of cultural heritage may be crumbling right before our eyes, but formally, such imperfect regulations make it impossible to take prompt measures to save it.

I suggest developing a long-term programme for preserving Russia’s cultural heritage sites, and I hope it will cover a 20-year period and include support measures for people, companies, and public associations willing to invest their work, time and money into restoring landmarks.

This year, we will test these mechanisms as part of a pilot project carried out by DOM.RF Development Institution covering five regions: the Trans-Baikal Territory, Novgorod, Ryazan, Smolensk and Tver regions. Our goal is to repair at least a thousand cultural heritage sites across the country by 2030, giving them a new lease on life so they can serve people and embellish our cities and village.

We will make sure to keep major culture-related projects running by continuing to fund them. We will undertake infrastructure upgrades for museums, theatres, libraries, clubs, arts schools and cinemas. Creative cinematic, online and social-media projects in education, awareness building, history and other areas will receive over 100 billion rubles over the next six years.

I suggest expanding the Pushkin Card programme, which enables school students and young people to access film screenings, museums, theatres and exhibitions for free, while offering cultural institutions an incentive to expand their operations and launch new projects, including by reaching out to the private sector. I am asking the Government to draft additional proposals to this effect.

In addition to this, we will launch a programme called the Rural Cultural Worker in 2025 along the same lines as the Rural Teacher and the Rural Doctor programmes. People keep raising this issue during our meetings. A specialist who moves to a rural area or a small town will be entitled to a non-recurring grant of 1 million rubles or twice as much, i.e., 2 million rubles, when moving to Russia’s Far East, Donbass or Novorossiya.

There is another additional decision we need to work on and adopt. I am asking the Government to offer special lending terms for family mortgages in small towns, as well as in regions that do not build many blocks of flats or none at all. We need to do this as quickly as possible and define the main terms for these loans, including the down payment and interest rates. I am asking you to keep this on your radar; I look forward to your proposals.

Moving on, we will renew targeted mortgage lending programmes with a 2 percent interest rate for Russia’s Far East, the Arctic, Donbass and Novorossiya. Special military operation participants and veterans will also be entitled to these subsidised loans.

We will provide separate support for the integrated development areas, the construction of residential areas replete with the infrastructure in the regions with inadequate levels of socioeconomic development, where many of our usual proposals do not work. For these territories, we will set aside an additional 120 billion rubles.

In this regard, we are faced with another system-wide challenge. With the federal backup, many regions have significantly increased the pace of relocating residents from dilapidated blocks of flats. A total of 1.73 million people have moved into new flats over the past 16 years, and it is important not to lose this momentum in the next six years. I urge the Government to draft and launch a new programme for relocating residents from dilapidated and structurally unsafe buildings.

With regard to housing and utilities, we will step up the pace of updating the utilities infrastructure. A total of 4.5 trillion rubles, including private funds, will be allocated for these purposes until 2030.

We will continue to implement the Clean Water Project. Clean water is a top priority for many of our urban and rural areas. We are primarily talking about a reliable supply of high-quality drinking water.

Gas distribution is a separate subject. Our plans include providing this environmentally friendly fuel to towns and districts in Yakutia and Buryatia, as well as the Khabarovsk, Primorye and Trans-Baikal territories, the Murmansk and Amur regions, the Jewish Autonomous Area, Karelia, and the major Russian city of Krasnoyarsk. We will also supply LNG to the Kamchatka Territory and certain other regions.

Naturally, this will make it possible to expand the social gas supply programme which was already used to build the gas distribution infrastructure free of charge to the property lines of 1.1 million land plots. Applications continue to be accepted, and we are helping entitled groups of citizens, including the families of those in the special military operation, install gas lines within their plots of land.

On a separate note, there are horticultural non-commercial partnerships within the boundaries of many communities outfitted with gas grids. For years, sometimes from generation to generation, people have been tending to their land plots, and are now building houses suitable for year-round living, but they are unable to hook up to the grid because these partnerships are not included in the Social Gas Infrastructure Development programme.

This problem affects millions of households and must be resolved in the interests of our citizens, meaning that the social gas infrastructure development programme should be expanded to include them, and the grid should be extended to the boundaries of the partnerships.

Residents in remote northern and far eastern territories, where grid gas will not be available any time soon, will also be supported. Today, they heat their homes with coal or wood. Now, with the state subsidies, they will be able to purchase modern and domestically produced, environmentally safe equipment. The neediest families should be supported first. We will allocate an additional 32 billion rubles for these purposes.

We will develop public transport considering today’s environmental standards and lower its average age. The Russian regions will receive an additional 40,000 buses, trolleybuses, trams, and electric buses by 2030. We will allocate an additional 150 billion rubles from the federal budget for this public transport renewal programme.

We will also replace the school bus fleet at a rate of at least 3,000 vehicles per year, which is especially important for small towns and rural areas. Both residents and heads of municipalities and regions are talking about this. This programme is indeed very important. Therefore, we will allocate an additional 66 billion rubles for the purchase of school buses. And, of course, they must either be entirely made in Russia or with a high degree of localisation.

As you know, we have managed to reduce harmful emissions in the atmosphere in 12 industrial centres of Russia as part of the Clean Air project, with 29 more cities having joined it last year. The volume of harmful emissions into the atmosphere across the country must be halved. We will move towards this goal step by step. A comprehensive environmental quality monitoring system will be created to assess the results.

Over the last five years, thousands of kilometres of rivers and banks have been cleaned, and dirty runoff into the Volga has been almost halved. Now I propose setting a goal of halving the pollution of Russia’s main bodies of water.

Over the last five years, 128 large landfills in cities and 80 sites of accumulated environmental damage that were literally poisoning the lives of people in 53 regions of Russia have been cleared. The territories of the Krasny Bor landfill, the Baikal Pulp and Paper Mill and Usolye-Sibirskoye have been brought to a safe state.

In this regard, colleagues, I would like to emphasise that only the most urgent measures have been carried out so far at these sites, but that is far from the end. Under no circumstances should they be left in the condition as they are now. We must complete this work and create all the necessary infrastructure there.

Overall, we will continue clearing the most hazardous sites of accumulated environmental damage. In the next six years, at least 50 of these sites must be cleared.

It is necessary to create incentives for businesses, introduce green technologies, and switch to a circular economy. Moreover, we have in fact created an advanced waste management industry from scratch: 250 enterprises have been built to process and dispose of waste. The goal by 2030 is to sort all solid waste and everything that needs to be sorted and reuse at least a quarter of it. We will allocate additional financing for these projects, and together with businesses we will build about 400 new waste management facilities and eight eco-industrial parks.

What else do I want to say? At meetings in the Far East, Siberia and other regions, people spoke a lot about the need to preserve our wealth of forestland, deal with illegal logging and protect our forests. This issue hugely resonates with the public. It is important to almost every person. All of us are pooling efforts here and the situation is gradually changing.

A very important milestone – since 2021, Russia has been restoring more forestland than it clears. I would like to thank all the volunteers, school and university students and everyone who planted trees and took part in environmental activities, and, of course, businesses that supported such projects. We will certainly continue restoring forests, parks and gardens, including those surrounding metropolitan areas and industrial centres.

I suggest making a separate decision on increasing salaries of specialists engaged in the forest industry, meteorology and environmental protection – all those dealing with the most important issues of environmental sustainability. We must admit frankly that they are doing vital work but their pay is very modest.

To support civil environmental protection initiatives, I believe it is necessary to establish a fund for ecological and environmental projects. It will start off with grants totaling one billion rubles a year.

We will continue working to preserve specially protected natural areas, as well as protect and restore populations of rare and endangered species of flora and fauna. I suggest considering the opening of a network of centres for rehabilitating injured and confiscated wild animals.

By 2030, we will create infrastructure of environmental tourism in all national parks of the country, including eco-trails and tourist hiking routes, weekend tours for schoolchildren, outdoor recreation areas, museums and visit centres.

We will build modern safe facilities near bodies of water as well, including Lake Baikal. A year-round resort will open there by 2030. It is important to strictly adhere to the zero pollution principle, that is, to ensure that no waste or untreated sewage of any kind enters the lake. The construction of the Baikal resort will be part of the large project of the Five Seas.

Modern hotel complexes will also appear on the coasts of the Caspian Sea, the Baltic Sea, the Sea of Azov, the Black Sea and the Sea of Japan. This project alone will make it possible to add another 10 million tourists a year.

Tourism numbers are expected to practically double to 140 million people a year by 2030 in the country as a whole, considering the dynamic development of such tourist centres as Altai, Kamchatka, Kuzbass, the North Caucasus, Karelia and the Russian North. Importantly, the contribution of tourism to Russia’s GDP will also double to five percent. We will soon draft additional decisions on this issue.

Transport infrastructure is crucial for the development of tourism and the region as a whole. High-speed auto traffic between Moscow and Kazan has already opened; this year, we are going to extend the route to Yekaterinburg, and next year, to Tyumen. In the future, a modern and safe transport artery will cross the entire country to Vladivostok.

Also, more than 50 city bypass highways should be built in Russia in the next six years. Another significant road project is certainly the Dzhubga-Sochi motorway. It will cut travel time from the M-4 Don to Sochi by three quarters – up to an hour and a half – and will promote Black Sea coast development.

I must say this at the outset – I have reached an agreement with the Government, and I want to say this publicly – that this is a complex and very capital-intensive project. It includes many tunnels and bridges; it is an expensive project. Nevertheless, I would like to ask the Government to develop a funding arrangement for it. Work it out.

We have already repaired Russia’s federal roads and almost 85 percent of roads in major metropolitan areas. It is essential that we keep this up. At the same time, in the coming years, we will place special emphasis on the improvement of regional roads.

Air travel should become more affordable. We need to increase Russians’ so-called air mobility. By 2030, air service volumes in Russia should increase 50 percent compared to last year.

To this end, we plan to expedite the development of intra- and interregional air travel. In this regard, the Government has very specific instructions: to modernise the infrastructure of at least 75 airports, which is more than a third of Russia’s airports, over the next six years, allocating at least 250 billion rubles in direct budget financing for this purpose.

The air fleets of our airlines definitely need upgrades by adding our own Russian-made aircraft. These new planes must meet all modern requirements for quality, convenience and safety, which is a challenging task. We used to buy too many planes abroad instead of developing our own domestic production.

Advanced Russian developments in mechanical engineering, construction, communications and digital systems will also be highly needed in building high-speed railways. I would like to say a few words on this.

The first high-speed rail line between Moscow and St Petersburg will pass through Tver and our ancient capital, Veliky Novgorod. Later, we will build similar lines to Kazan and the Urals, to Rostov-on-Don, to the Black Sea coast, to Minsk, our fraternal Belarus, and other popular destinations.

The all-out modernisation of the Central Transport Hub will continue. The Moscow Central Diameters, the new surface metro lines will become part of a network connecting the Moscow Region with the Yaroslavl, Tver, Kaluga, Vladimir and other regions by modern high-speed routes.

It is also imperative to upgrade the network of major inland waterways. This should ensure additional economic effects with regard to tourism, industry, as well as the development of certain sensitive regions that are very important for us, including the regions of the Far North.

What can I add to this? Modern infrastructure offers added value and increases market capitalisation for all national assets and regions serving transit tourist flows, while also helping develop manufacturing and agricultural facilities and encouraging people to build single-family homes for their households and create a better living environment for them. This also means new business opportunities, including on foreign markets.

In this context, there is a special matter we discussed during one of the meetings I had. I am talking about the waiting times at border checkpoints. This has become an urgent matter in Russia’s Far East. Customs clearance must take 19 minutes according to our standards, but in reality truck drivers usually have to wait for hours to cross the border.

Our colleagues from the Ministry of Transport have a specific objective to reduce customs clearance times for freight transport on the border so that it does not exceed 10 minutes. The latest technological solutions can make this happen.

These requirements are also essential for the North-South transport corridor to be effective. This route will link Russia to countries in the Middle East and Asia, and will rely on motorways, as well as seamless rail connections, from our ports in the Baltic and Barents seas all the way to the Persian Gulf and the Indian Ocean. We will also increase the carrying capacity of our southbound railways to make better use of our ports in the Azov and Black seas.

The effort to expand the Eastern Operating Domain covers the Baikal-Amur Mainline and the Trans-Siberian Railway. We are about to launch the third stage. We slacked off at one point, if you will excuse this expression. In fact, we failed to act when we should have, but that’s okay – we now have to catch up, and catch up we will. These two railways will increase their annual throughput capacity from 173 to 210 million tonnes by 2030. At the same time, there will be an effort to expand the Vanino and the Sovetskaya Gavan ports.

Northern Sea Route development deserves special attention. We invite foreign logistics companies and foreign countries to use this global transport corridor. Last year, freight volumes along this route reached 36 million tonnes. Colleagues, I would like to draw your attention to the fact that this exceeds the Soviet-era maximum five times over. We will make the Northern Sea Route operational year-round and will expand our northern ports, including the Murmansk transport hub. This includes an effort to expand our Arctic fleet, of course.

The Severny Polyus (North Pole), a unique research icebreaking platform, sailed last year. This year, the Baltic Shipyard started building the Leningrad, a new nuclear icebreaker. Next year, we will start building the Stalingrad, which belongs to the same class of ships. As for the Zvezda Shipyard in Russia’s Far East, it is building the Lider (Leader), a new-generation icebreaker that will have double the power of its predecessors.

Russia’s shipyards will upgrade much of our commercial fleet, including tankers, gas carriers and container ships. This effort is expected to enable Russian businesses to streamline their trade operations considering the changing logistics environment and radical shifts in the global economy.

Fellow citizens, friends,

I would like to make special mention of something. I meet regularly with participants in the special military operation, including career military personnel and volunteers, as well as people of civilian professions who were mobilised for military service. All of them took up arms and rose in defence of our Motherland.

You know, I look at these courageous men, sometimes very young men and, without exaggeration, I can say that my heart overflows with pride for our people, our nation and these people in particular. Without a doubt, people like them will not back down, fail or betray.

They should take leading positions in the system of education and upbringing of young people, in public associations, state-run companies and privately held businesses, federal and municipal administration. They should head regions and enterprises, as well as major national projects. Some of these heroes and patriots are quite low-key and reserved in everyday life. They do not brag about their accomplishments, or talk big. But at pivotal moments in history, such people come to the fore and take responsibility. People who think about the country and live as one with it can be entrusted with the future of Russia.

You know that the word “elite” has lost much of its credibility. Those who have done nothing for society and consider themselves a caste endowed with special rights and privileges – especially those who took advantage of all kinds of economic processes in the 1990s to line their pockets – are definitely not the elite. To reiterate, those who serve Russia, hard workers and military, reliable, trustworthy people who have proven their loyalty to Russia by deeds, in a word, dignified people are the genuine elite.

In this regard, I would like to announce a new decision which, I believe, is important. Starting tomorrow, March 1, 2024, the veterans of the special military operations, as well as soldiers and officers who are currently fighting in active units, will be able to apply to be in the first class of a special personnel training programme. Let us call it Time of Heroes. Truth be told, this idea came to me when I met with the St Petersburg students who served in the special military operation. This programme will be built according to the standards of our best projects, namely, the Higher School of Public Administration, also known as the “school of governors,” and the Leaders of Russia contest. Their graduates tend to reach high positions in many spheres, and even become ministers and heads of regions.

Active military members and veterans with university degrees and managerial experience will be welcome to enroll, regardless of their rank or position. What matters is that those individuals have shown their best qualities, have shown that they know how to lead their comrades.

The course of study will begin in the coming months. The first cohort of participants will be mentored by senior officials from the Government, the Presidential Executive Office, federal ministries and agencies, heads of regions and our largest companies. In the future, we will expand such personnel training programmes, launch management courses at the Presidential Academy of National Economy and Public Administration, and I deem it expedient to raise the status of the Academy at the legislative level.

In addition, veterans and participants of the special military operation will have priority entitlement to join higher education programmes in civilian specialties at our leading universities.

I would like to ask the Defence Ministry and all unit commanders to support their soldiers and officers’ interest in joining the new personnel training programme, to give them the opportunity to apply and to physically attend classes. I would like to note that the special military operation participants, including privates, sergeants and combat officers, are already the backbone of our Armed Forces. And, as I have said, those who intend to continue their military careers will receive priority promotion, enrollment in command courses, military schools and academies.

Friends,

Independence, self-sufficiency and sovereignty must be proven and reaffirmed every day. This is our responsibility for Russia’s present and future, something no else can do but us. This is about our Motherland, the Motherland of our ancestors, and no one will ever need it and treasure it the way we do – except our descendants, to whom we must pass on a strong and prosperous country.

Over the past few years, we have successfully built a management system, and implemented our national projects relying on large amounts of data and modern digital technologies. This has enabled us to increase efficiency, manage risks, build on the entire amount of available information, and continuously fine-tune our projects and programmes while relying on feedback from our people.

I would like to thank my colleagues from the Government, agencies and regions that were meticulously building this system all these years – during the pandemic and in the face of the sanctions aggression against Russia. I know that this was a challenging and difficult job, but the main point is that it is already paying off. We are seeing this in the results.

We will continue following precisely this logic. It is necessary to endorse and coordinate with each other all the national projects I spoke about today. I would like to emphasise again that these are not projects of separate departments. They should work for common system-wide objectives and for our national development goals. That said, I would like to ask the Russian Popular Front to continue monitoring the implementation of decisions at all levels of government.

I would like to stress that the main result of our programmes is measured not in tonnes, kilometres or money spent. The main thing is that people see changes for the better in their life. The scale of historical challenges facing Russia requires extremely clear, coordinated work of the state, civil society and the business community.

I consider it necessary to not only prepare a draft budget for the next three years but also to plan all major spending and investment further on, up to 2030. In other words, we must draft a perspective six-year plan for our national development that we will definitely supplement with new initiatives. Naturally, life will make its own adjustments to it.

We are mapping out long-term plans despite this complicated period, despite the current trials and difficulties. The programme that I set out in the address today is based on facts and tackles fundamental matters. This is a programme of a strong sovereign country looking to the future with confidence. We have both resources and enormous opportunities to achieve the goals we set ourselves.

But now I will emphasise the main thing. Today, making good on all these plans directly depends on our soldiers, officers and volunteers – all military personnel that are now fighting at the front. It depends on the courage and resolve of our comrades-in-arms that are defending the Motherland, going on the offensive, moving forward under fire and sacrificing themselves for the sake of us, for the sake of the Fatherland. It is our fighters that are creating today the absolutely essential conditions for the future of the country and its development.

You have our deepest respect, guys.

I would like to thank all of you, colleagues, and all citizens of Russia for their solidarity and reliability. We are one big family; we stand together and for this reason we will do everything we plan and desire and dream.

I have faith in our victories, successes and the future of Russia!

Thank you.

(National Anthem of the Russian Federation plays.)

Presidential Address to Federal Assembly

2023-02-28T14:06:55+04:00

Vladimir Putin delivered his Address to the Federal Assembly. The ceremony took place in Gostiny Dvor, Moscow.

President of Russia Vladimir Putin: Good afternoon,

Members of the Federation Assembly – senators, State Duma deputies,

Citizens of Russia,

This Presidential Address comes, as we all know, at a difficult, watershed period for our country. This is a time of radical, irreversible change in the entire world, of crucial historical events that will determine the future of our country and our people, a time when every one of us bears a colossal responsibility.

One year ago, to protect the people in our historical lands, to ensure the security of our country and to eliminate the threat coming from the neo-Nazi regime that had taken hold in Ukraine after the 2014 coup, it was decided to begin the special military operation. Step by step, carefully and consistently we will deal with the tasks we have at hand.

Since 2014, Donbass has been fighting for the right to live in their land and to speak their native tongue. It fought and never gave up amid the blockade, constant shelling and the Kiev regime’s overt hatred. It hoped and waited that Russia would come to help.

In the meantime, as you know well, we were doing everything in our power to solve this problem by peaceful means, and patiently conducted talks on a peaceful solution to this devastating conflict.

Behind our backs, a very different plan was being hatched. As we can see now, the promises of Western leaders, their assurances that they were striving for peace in Donbass turned out to be a sham and outright lies. They were simply marking time, engaged in political chicanery, turning a blind eye to the Kiev regime’s political assassinations and reprisals against undesirable people, their mistreatment of believers. They increasingly incited the Ukrainian neo-Nazis to stage terrorist attacks in Donbass. The officers of nationalist battalions trained at Western academies and schools. Weapons were also supplied.

I would like to emphasise that, prior to the special military operation, Kiev held negotiations with the West about the delivery of air-defence systems, warplanes and other heavy equipment to Ukraine. We also recall the Kiev regime’s vain attempts to obtain nuclear weapons; they discussed this issue publicly.

The United States and NATO quickly deployed their army bases and secret biological laboratories near Russian borders. They mastered the future theatre of war during war games, and they prepared the Kiev regime which they controlled and Ukraine which they had enslaved for a large-scale war.

Now they admit this publicly and openly, and they feel no shame about it. They seem to be proud and even to be revelling in their own perfidy, while calling the Minsk Agreements and the Normandy Format a diplomatic show and a bluff. It turns out that all this time, while Donbass was ablaze, while blood was being spilled, and while Russia sincerely made every effort to achieve a peaceful solution (I want to emphasise the word “sincerely”), they gambled on people’s lives, and in effect, were playing with marked cards, as they say in certain circles.

This appalling method of deception has been tried and tested many times before. They behaved just as shamelessly and duplicitously when destroying Yugoslavia, Iraq, Libya, and Syria. They will never be able to wash off this shame. The concepts of honour, trust, and decency are not for them.

Over the long centuries of colonialism, diktat and hegemony, they got used to being allowed everything, got used to spitting on the whole world. It turned out that they treat people living in their own countries with the same disdain, like a master. After all, they cynically deceived them too, tricked them with tall stories about the search for peace, about adherence to the UN Security Council resolutions on Donbass. Indeed, the Western elites have become a symbol of total, unprincipled lies.

We firmly defend our interests as well as our belief that in today’s world there should be no division into so-called civilised countries and all the rest and that there is a need for an honest partnership that rejects any exclusivity, especially an aggressive one.

We were open and sincerely ready for a constructive dialogue with the West; we said and insisted that both Europe and the whole world needed an indivisible security system equal for all countries, and for many years we suggested that our partners discuss this idea together and work on its implementation. But in response, we received either an indistinct or hypocritical reaction, as far as words were concerned. But there were also actions: NATO’s expansion to our borders, the creation of new deployment areas for missile defence in Europe and Asia – they decided to take cover from us under an ‘umbrella’ – deployment of military contingents, and not just near Russia’s borders.

I would like to stress –in fact, this is well-known – that no other country has so many military bases abroad as the United States. There are hundreds of them – I want to emphasise this – hundreds of bases all over the world; the planet is covered with them, and one look at the map is enough to see this.

The whole world witnessed how they withdrew from fundamental agreements on weapons, including the treaty on intermediate and shorter-range missiles, unilaterally tearing up the fundamental agreements that maintain world peace. For some reason, they did it. They do not do anything without a reason, as we know.

Finally, in December 2021, we officially submitted draft agreements on security guarantees to the USA and NATO. In essence, all key, fundamental points were rejected. After that it finally became clear that the go-ahead for the implementation of aggressive plans had been given and they were not going to stop.

The threat was growing by the day. Judging by the information we received, there was no doubt that everything would be in place by February 2022 for launching yet another bloody punitive operation in Donbass. Let me remind you that back in 2014, the Kiev regime sent its artillery, tanks and warplanes to fight in Donbass.

We all remember the aerial footage of airstrikes targeting Donetsk. Other cities also suffered from airstrikes. In 2015, they tried to mount a frontal assault against Donbass again, while keeping the blockade in place and continuing to shell and terrorise civilians. Let me remind you that all of this was completely at odds with the documents and resolutions adopted by the UN Security Council, but everyone pretended that nothing was happening.

Let me reiterate that they were the ones who started this war, while we used force and are using it to stop the war.

Those who plotted a new attack against Donetsk in the Donbass region, and against Lugansk understood that Crimea and Sevastopol would be the next target. We realised this as well. Even today, Kiev is openly discussing far-reaching plans of this kind. They exposed themselves by making public what we knew already.

We are defending human lives and our common home, while the West seeks unlimited power. It has already spent over $150 billion on helping and arming the Kiev regime. To give you an idea, according to the Organisation for Economic Cooperation and Development, the G7 countries earmarked about $60 billion in 2020–2021 to help the world’s poorest countries. Is this clear? They spent $150 billion on the war, while giving $60 billion to the poorest countries, despite pretending to care about them all the time, and also conditioning this support on obedience on behalf of the beneficiary countries. What about all this talk of fighting poverty, sustainable development and protection of the environment? Where did it all go? Has it all vanished? Meanwhile, they keep channelling more money into the war effort. They eagerly invest in sowing unrest and encouraging government coups in other countries around the world.

The recent Munich Conference turned into an endless stream of accusations against Russia. One gets the impression that this was done so that everyone would forget what the so-called West has been doing over the past decades. They were the ones who let the genie out of the bottle, plunging entire regions into chaos.

According to US experts, almost 900,000 people were killed during wars unleashed by the United States after 2001, and over 38 million became refugees. Please note, we did not invent these statistics; it is the Americans who are providing them. They are now simply trying to erase all this from the memory of humankind, and they are pretending that all this never happened. However, no one in the world has forgotten this or will ever forget it.

None of them cares about human casualties and tragedies because many trillions of dollars are at stake, of course. They can also continue to rob everyone under the guise of democracy and freedoms, to impose neoliberal and essentially totalitarian values, to brand entire countries and nations, to publicly insult their leaders, to suppress dissent in their own countries and to divert attention from corruption scandals by creating an enemy image. We continue to see all this on television, which highlights greater domestic economic, social and inter-ethnic problems, contradictions and disagreements.

I would like to recall that, in the 1930s, the West had virtually paved the way to power for the Nazis in Germany. In our time, they started turning Ukraine into an “anti-Russia.” Actually, this project is not new. People who are knowledgeable about history at least to some extent realise that this project dates back to the 19^th century. The Austro-Hungarian Empire and Poland had conceived it for one purpose, that is, to deprive Russia of these historical territories that are now called Ukraine. This is their goal. There is nothing new here; they are repeating everything.

The West expedited the implementation of this project today by supporting the 2014 coup. That was a bloody, anti-state and unconstitutional coup. They pretended that nothing happened, and that this is how things should be. They even said how much money they had spent on it. Russophobia and extremely aggressive nationalism formed its ideological foundation.

Quite recently, a brigade of the Armed Forces of Ukraine was named Edelweiss after a Nazi division whose personnel were involved in deporting Jews, executing prisoners of war and conducting punitive operations against partisans in Yugoslavia, Italy, Czechoslovakia and Greece. We are ashamed to talk about this, but they are not. Personnel serving with the Armed Forces of Ukraine and the Ukrainian National Guard are particularly fond of chevrons formerly worn by soldiers from Das Reich, Totenkopf (Death’s Head) and Galichina divisions and other SS units. Their hands are also stained with blood. Ukrainian armoured vehicles feature insignia of the Nazi German Wehrmacht.

Neo-Nazis are open about whose heirs they consider themselves to be. Surprisingly, none of the powers that be in the West are seeing it. Why? Because they – pardon my language – could not care less about it. They do not care who they are betting on in their fight against us, against Russia. In fact, anyone will do as long as they fight against us and our country. Indeed, we saw terrorists and neo-Nazis in their ranks. They would let all kinds of ghouls join their ranks, for God’s sake, as long as they act on their will as a weapon against Russia.

In fact, the anti-Russia project is part of the revanchist policy towards our country to create flashpoints of instability and conflicts next to our borders. Back then, in the 1930s, and now the design remains the same and it is to direct aggression to the East, to spark a war in Europe, and to eliminate competitors by using a proxy force.

We are not at war with the people of Ukraine. I have made that clear many times. The people of Ukraine have become hostages of the Kiev regime and its Western handlers, who have in fact occupied that country in the political, military and economic sense and have been destroying Ukrainian industry for decades now as they plundered its natural resources. This led to social degradation and an immeasurable increase in poverty and inequality. Recruiting resources for military operations in these circumstances was easy. Nobody was thinking about people, who were conditioned for slaughter and eventually became expendables. It is a sad and dreadful thing to say, but it is a fact.

Responsibility for inciting and escalating the Ukraine conflict as well as the sheer number of casualties lies entirely with the Western elites and, of course, today’s Kiev regime, for which the Ukrainian people are, in fact, not its own people. The current Ukrainian regime is serving not national interests, but the interests of third countries.

The West is using Ukraine as a battering ram against Russia and as a testing range. I am not going to discuss in detail the West's attempts to turn the war around, or their plans to ramp up military supplies, since everyone is well aware of that. However, there is one circumstance that everyone should be clear about: the longer the range of the Western systems that will be supplied to Ukraine, the further we will have to move the threat away from our borders. This is obvious.

The Western elite make no secret of their goal, which is, I quote, “Russia’s strategic defeat.” What does this mean to us? This means they plan to finish us once and for all. In other words, they plan to grow a local conflict into a global confrontation. This is how we understand it and we will respond accordingly, because this represents an existential threat to our country.

However, they too realise it is impossible to defeat Russia on the battlefield and are conducting increasingly aggressive information attacks against us targeting primarily the younger generation. They never stop lying and distorting historical facts as they attack our culture, the Russian Orthodox Church and other traditional religious organizations in our country.

Look what they are doing to their own people. It is all about the destruction of the family, of cultural and national identity, perversion and abuse of children, including pedophilia, all of which are declared normal in their life. They are forcing the priests to bless same-sex marriages. Bless their hearts, let them do as they please. Here is what I would like to say in this regard. Adult people can do as they please. We in Russia have always seen it that way and always will: no one is going to intrude into other people’s private lives, and we are not going to do it, either.

But here is what I would like to tell them: look at the holy scripture and the main books of other world religions. They say it all, including that family is the union of a man and a woman, but these sacred texts are now being questioned. Reportedly, the Anglican Church is planning, just planning, to explore the idea of a gender-neutral god. What is there to say? Father, forgive them, for they know not what they do.

Millions of people in the West realise that they are being led to a spiritual disaster. Frankly, the elite appear to have gone crazy, and it looks like there is no cure for that. But like I said, these are their problems, while we must protect our children, which we will do. We will protect our children from degradation and degeneration.

Clearly, the West will try to undermine and divide our society and to bet on the fifth columnists who, throughout history, and I want to emphasise this, have been using the same poison of contempt for their own Fatherland and the desire to make money by selling this poison to anyone who is willing to pay for it. It has always been that way.

Those who have embarked on the road of outright betrayal, committing terrorist and other crimes against the security of our society and the country’s territorial integrity, will be held accountable for this under law. But we will never behave like the Kiev regime and the Western elite, which have been and still are involved in witch hunts. We will not settle scores with those who take a step aside and turn their back on their Motherland. Let this be on their conscience, let them live with this – they will have to live with it. The main point is that our people, the citizens of Russia, have given them a moral assessment.

I am proud, and I think we are all proud that our multi-ethnic nation, the absolute majority of our citizens, have taken a principled stance on the special military operation. They understand the basic idea of what we are doing and support our actions on the defence of Donbass. This support primarily revealed their true patriotism – a feeling that is historically inherent in our nation. It is stunning in its dignity and deep understnding by everyone – I will stress, everyone – of the inseparable link between one’s own destiny and the destiny of the Fatherland.

My dear friends, I would like to thank everyone, all the people of Russia for their courage and resolve. I would like to thank our heroes, soldiers and officers in the Army and the Navy, the Russian Guards, the secret services staff, and all structures of authority, the fighters in Donetsk and Lugansk corps, volunteers and patriots who are now fighting in the ranks of the BARS combat army reserve.

I would like to apologise that I will not be able to mention everyone during today’s speech. You know, when I was drafting this speech, I wrote a very long list of these heroic units but then removed it from my text because, as I said, it is impossible to mention everyone, and I was afraid to offend anyone I might leave out.

My deepest gratitude to the parents, wives and families of our defenders, the doctors and paramedics, combat medics and medical nurses that are saving the wounded; to the railway workers and drivers that are supplying the front; to the builders that are erecting fortifications and restoring housing, roads and civilian facilities; to the workers and engineers at defence companies, who are now working almost around-the-clock, in several shifts; and to rural workers who reliably ensure food security for the country.

I am grateful to the teachers who sincerely care for the young generations of Russia, especially those that are working in very difficult, almost front-line conditions; the cultural figures that are visiting the zone of hostilities and hospitals to support the soldiers and officers; volunteers that are helping the front and civilians; journalists, primarily war correspondents, that are risking their lives to tell the truth to the world; pastors of Russia’s traditional religions and military clergy, whose wise words support and inspire people; government officials and business people – all those who fulfill their professional, civil and simply human duty.

My special words go to the residents of the Donetsk and Lugansk people’s republics, and the Zaporozhye and Kherson regions. You, my friends, determined your future at the referendums and made a clear choice despite the neo-Nazis’ threats and violence, amid the close military actions. But there has been nothing stronger than your intent to be with Russia, with your Motherland.

(Applause)

I want to emphasise that this is the reaction of the audience to the residents of the Donetsk and Lugansk people’s republics, and the Zaporozhye and Kherson regions. Once again, our deepest respect for them all.

We have already begun and will expand a major socioeconomic recovery and development programme for these new regions within the Federation. It includes restoring production facilities, jobs, and the ports on the Sea of Azov, which again became Russia’s landlocked sea, and building new, modern road,s like we did in Crimea, which now has a reliable land transport corridor with all of Russia. We will definitely implement all of these plans together.

Russia’s regions are currently providing direct assistance to the cities, districts and villages in the Donetsk and Lugansk people’s republics and the Zaporozhye and Kherson regions. They are doing it sincerely, like true brothers and sisters. We are together again, which means that we have become even stronger, and we will do everything in our power to bring back the long-awaited peace to our land and ensure the safety of our people. Our soldiers, our heroes are fighting for this, for their ancestors, for the future of their children and grandchildren, for uniting our people.

Friends, I would like to ask you to pay your respects to our fellow soldiers who were killed in the attacks of neo-Nazis and raiders, who gave up their lives for Russia, for civilians, the elderly, women and children.

(A minute of silence)

Thank you.

We all understand, and I understand also how unbearably hard it is for their wives, sons and daughters, for their parents who raised those dignified defenders of the Fatherland – like the Young Guard members from Krasnodon, young men and women who fought against Nazism and for Donbass during the Great Patriotic War. Everyone in Russia remembers their courage, resilience, enormous strength of spirit and self-sacrifice to this day.

Our duty is to support the families that have lost their loved ones and to help them raise their children and give them an education and a job. The family of each participant in the special military operation must be a priority and treated with care and respect. Their needs must be responded to immediately, without bureaucratic delays.

I suggest establishing a dedicated state fund for bringing targeted, personalised assistance to the families of fallen fighters, as well as veterans of the special military operation. This entity will be tasked with coordinating efforts to offer social, medical support and counselling, and also address matters related to sending them to health resorts and providing rehabilitation services, while also assisting them in education, sports, employment and in acquiring a new profession. This fund will also have an essential mission to ensure long-term home care and high-technology prosthetics for those who need that.

I am asking the Government to work with the State Council Commission on Social Policy and with the regions to resolve the organisational matters as quickly as possible.

The state fund must be transparent in its work, while streamlining assistance and operating as a one-stop-shop, free from red tape or administrative barriers. Every family without exception, and every veteran will have their personal social worker, a coordinator, who will be there for them in person to resolve in real time any issue they might face. Let me emphasise that the fund must open its offices in all regions of the Russian Federation in 2023.

We already have measures in place for supporting Great Patriotic War veterans, combat veterans, as well as participants in local conflicts. I believe these essential elements will be added to the state fund’s mission moving forward. We need to explore this possibility, and I am asking the Government to do so.

Make no mistake: the fact that we are establishing a state fund does not mean that other institutions or officials at other levels of government will be relieved of their responsibility. I expect all federal agencies, regions and municipalities to stay focused on veterans, on service personnel and their families. In this context, I would like to thank the senior regional officials, mayors, and governors who routinely meet with people, including by visiting the line of contact, and support their fellow countrymen.

On a special note, let me say that today, career service personnel, mobilised conscripts, and volunteers all share frontline hardships, including in terms of provisions, supplies and equipment, remuneration, and insurance payments to the wounded, as well as healthcare services. However, there are complaints that make it all the way to my office, as well as to the governors, as they have been telling me, and to the military prosecutor’s office and the Human Rights Commissioner, showing that some of these issues have yet to be resolved. We need to get to the bottom of each complaint on a case-by-case basis.

And one more thing: everyone understands that serving in the special military operation zone causes immense physical and mental stress, since people risk their lives and health every day. For this reason, I believe that the mobilised conscripts, as well as all service personnel, and all those taking part in the special military operation, including volunteers, must benefit from a leave of absence of at least 14 days every six months without counting the time it takes them to travel to their destination. This way, every fighter will be able to meet family and spend time with their loved ones.

Colleagues, as you are aware, a 2021–2025 plan for building and developing the Armed Forces was approved by a Presidential Executive Order and is being implemented and adjusted as necessary. Importantly, our next steps to reinforce the Army and the Navy and to secure the current and future development of the Armed Forces must be based on actual combat experience gained during the special military operation, which is extremely important, I would even say absolutely invaluable to us.

For example, the latest systems account for over 91 percent, 91.3 percent, of Russia's nuclear deterrence forces. To reiterate, based on our newly acquired experience, we must access a similarly high quality level for all other components of the Armed Forces.

Officers and sergeants who act as competent, modern and decisive commanders, and they are many, will be promoted to higher positions as a matter of priority, sent to military universities and academies, and will serve as a powerful personnel reserve for the Armed Forces. Without a doubt, they are a valuable resource in civilian life and at governments at all levels. I just want our colleagues to pay attention to that. It is very important. The people must know that the Motherland appreciates their contribution to the defence of the Fatherland.

We will widely introduce the latest technology to ensure high-quality standards in the Army and Navy. We have corresponding pilot projects and samples of weapons and equipment in each area. Many of them are significantly superior to their foreign counterparts. Our goal is to start mass production. This work is underway and is picking up pace. Importantly, this relies on domestic research and the industrial base and involves small- and medium-sized high-tech businesses in implementation of the state defence order.

Today, our plants, design bureaus and research teams employ experienced specialists and increasing numbers of talented and highly skilled young people who are oriented towards breakthrough achievements while remaining true to the tradition of Russian gunsmiths, which is to spare no effort to ensure victory.

We will certainly strengthen the guarantees for our workforce, in part concerning salaries and social security. I propose launching a special programme for low-cost rental housing for defence industry employees. The rental payments for them will be significantly lower than the going market rate, since a significant portion of it will be covered by the state.

The Government reviewed this issue. I instruct you to work through the details of this programme and start building such rental housing without delay, primarily, in the cities that are major defence, industrial and research centres.

Colleagues,

As I have already said, the West has opened not only military and informational warfare against us, but is also seeking to fight us on the economic front. However, they have not succeeded on any of these fronts, and never will. Moreover, those who initiated the sanctions are punishing themselves: they sent prices soaring in their own countries, destroyed jobs, forced companies to close, and caused an energy crisis, while telling their people that the Russians were to blame for all of this. We hear that.

What means did they use against us in their efforts to attack us with sanctions? They tried disrupting economic ties with Russian companies and depriving the financial system of its communication channels to shutter our economy, isolate us from export markets and thus undermine our revenues. They also stole our foreign exchange reserves, to call a spade a spade, tried to depreciate the ruble and drive inflation to destructive heights.

Let me reiterate that the sanctions against Russia are merely a means, while the aim as declared by the Western leaders, to quote them, is to make us suffer. “Make them suffer” – what a humane attitude. They want to make our people suffer, which is designed to destabilise our society from within.

However, their gamble failed to pay off. The Russian economy, as well as its governance model proved to be much more resilient than the West thought. The Government, parliament, the Bank of Russia, the regions and of course the business community and their employees all worked together to ensure that the economic situation remained stable, offered people protection and preserved jobs, prevented shortages, including of essential goods, and supported the financial system and business owners who invest in their enterprises, which also means investing in national development.

As early as in March 2022, we launched a dedicated assistance package for businesses and the economy worth about a trillion rubles. I would like to draw your attention to the fact that this has nothing to do with printing money. Not at all. Everything we do is solidly rooted in market principles.

In 2022, there was a decline in the gross domestic product. Mr Mishustin called me to say, “I would like to ask you to mention this.” I think that these data were released yesterday, right on schedule.

You may remember that some predicted that the economy would shrink by 20 to 25 percent, or maybe 10 percent. Only recently, we spoke about a 2.9 percent decline, and I was the one who announced this figure. Later it came down to 2.5 percent. However, in 2022, the GDP declined by 2.1 percent, according to the latest data. And we must be mindful of the fact that back in February and March of last year some predicted that the economy would be in free fall.

Russian businesses have restructured their logistics and have strengthened their ties with responsible, predictable partners – there are many of them, they are the majority in the world.

I would like to note that the share of the Russian ruble in our international settlements has doubled as compared to December 2021, reaching one third of the total, and including the currencies of the friendly countries, it exceeds half of all transactions.

We will continue working with our partners to create a sustainable, safe system of international settlements, which will be independent of the dollar and other Western reserve currencies that are bound to lose their universal appeal with this policy of the Western elite, the Western rulers. They are doing all this to themselves with their own hands. We are not the ones reducing transactions in dollars or other so-called universal currencies – they are doing everything with their own hands.

You know, there is a maxim, cannons versus butter. Of course, national defence is the top priority, but in resolving strategic tasks in this area, we should not repeat the mistakes of the past and should not destroy our own economy. We have everything we need to both ensure our security and create conditions for confident progress in our country. We are acting in line with this logic and we intend to continue doing this.

Thus, many basic, I will stress, civilian industries in the national economy are far from being in decline, they have increased their production last year by a considerable amount. The scale of housing put into service exceeded 100 million square meters for the first time in our modern history.

As for agricultural production, it recorded two-digit growth rates last year. Thank you very much. We are most grateful to our agricultural producers. Russian agrarians harvested a record amount – over 150 million tonnes of grain, including over 100 million tonnes of wheat. By the end of the agricultural season, that is, June 30, 2023, we will bring our grain exports to 55–60 million tonnes.

Just 10 or 15 years ago, this seemed like a fairy tale, an absolutely unfeasible plan. If you remember, and I am sure some people do remember this – the former Deputy Prime Minister and the Minister of Agriculture are here – just recently, agrarians took in 60 million tonnes overall in a year, whereas now 55–60 million is their export potential alone. I am convinced we have every opportunity for a similar breakthrough in other areas as well.

We prevented the labour market from collapsing. On the contrary, we were able to reduce unemployment in the current environment. Today, considering the major challenges coming at us from all sides, the labour market is even better than it used to be. You may remember that the unemployment rate was 4.7 percent before the pandemic, and now, I believe, it is 3.7 percent. What is the figure, Mr Mishustin? 3.7 percent? This is an all-time low.

Let me reiterate that the Russian economy has prevailed over the risks it faced – it has prevailed. Of course, it was impossible to anticipate many of them, and we had to respond literally on the fly, dealing with issues as they emerged. Both the state and businesses had to move quickly. I will note that private actors, SMEs, played an essential role in these efforts, and we must remember this. We avoided having to apply excessive regulation or distorting the economy by giving the state a more prominent role.

What else there is to say? The recession was limited to the second quarter of 2022, while the economy grew in the third and fourth quarters. In fact, the Russian economy has embarked on a new growth cycle. Experts believe that it will rely on a fundamentally new model and structure. New, promising global markets, including the Asia-Pacific, are taking precedence, as is the domestic market, with its research, technology and workforce no longer geared toward exporting commodities but manufacturing goods with high added value. This will help Russia unleash its immense potential in all spheres and sectors.

We expect to see a solid increase in domestic demand as early as this year. I am convinced that companies will use this opportunity to expand their manufacturing, make new products that are in high demand, and to take over the market niches vacated or about to be vacated by Western companies as they withdraw.

Today, we clearly see what is going on and understand the structural issues we have to address in logistics, technology, finance, and human resources. Over the past years, we have been talking a lot and at length about the need to restructure our economy. Now these changes are a vital necessity, a game changer, and all for the better. We know what needs to be done to enable Russia to make steady progress and to develop independently regardless of any outside pressure or threats, while guaranteeing our national security and interests.

I would like to point out and to emphasise that the essence of our task is not to adapt to circumstances. Our strategic task is to take the economy to a new horizon. Everything is changing now, and changing extremely fast. This is not only a time of challenges but also a time of opportunities. This is really so today. And our future depends on the way we realise these opportunities. We must put an end – and I want to emphase this – to all interagency conflicts, red tape, grievances, doublespeak, or any other nonsense. Everything we do must contribute to achieving our goals and delivering results. This is what we must strive to achieve.

Enabling Russian companies and small family-run businesses to successfully tap the market is a victory in itself. Building cutting-edge factories and kilometres of new roads is a victory. Every new school, every new kindergarten we build is a victory. Scientific discoveries and new technologies – these are also victories, of course. What matters is that all of us contribute to our shared success.

What areas should we focus the partnership of the state, the regions and domestic business on?

First, we will expand promising foreign economic ties and build new logistics corridors. A decision has already been made to extend the Moscow-Kazan expressway to Yekaterinburg, Chelyabinsk and Tyumen, and eventually to Irkutsk and Vladivostok with branches to Kazakhstan, Mongolia and China. This will, in part, allows us to considerably expand our ties with Southeast Asian markets.

We will develop Black Sea and Sea of Azov ports. We will pay special attention to the North-South international corridor, as those who work on this every day know. Vessels with a draft of up to 4.5 meters will be able to pass through the Volga-Caspian Sea Canal this year. This will open up new routes for business cooperation with India, Iran, Pakistan, and the Middle Eastern countries. We will continue developing this corridor.

Our plans include expedited modernisation of the eastern railways – the Trans-Siberian Railway and the Baikal-Amur Railway (BAM) – and building up the potential of the Northern Sea Route. This will create not only additional freight traffic but also a foundation for reaching our national goals on developing Siberia, the Arctic and the Far East.

The infrastructure of the regions and the development of infrastructure, including communications, telecommunications and railways will receive a powerful impetus. Next year, 2024, we will bring to a proper condition at least 85 percent of all roads in the country’s largest metropolises, as well as over half of all regional and municipal roads. I am sure we will achieve this.

We will also continue our free gas distribution programme. We have already made the decision to extend it to social facilities – kindergartens and schools, outpatient clinics and hospitals, as well as primary healthcare centres. This programme will now be permanent for our citizens – they can always request a connection to the gas distribution system.

This year, we will launch a large programme to build and repair housing and utility systems. Over the next ten years, we plan to invest at least 4.5 trillion rubles in this. We know how important this is for our people and how neglected this area has been. It is necessary to improve this situation, and we will do it. It is important to give the programme a powerful start. So, I would like to ask the Government to ensure stable funding for this.

Second, we will need to significantly expand our economy’s production capabilities and to increase domestic industrial capacity.

An industrial mortgage tool has been created, and an easy-term loan can now be taken out not only to purchase production facilities, but also to build or upgrade them. The size of such a loan was discussed many times and there were plans to increase it. It is a decent amount for a first step: up to 500 million rubles. It is available at a rate of 3 or 5 percent for up to seven years. It sounds like a very good programme and should be put to good use.

New terms for industrial clusters took effect this year, including a lower fiscal and administrative burden on resident companies, and long-term state orders and subsidies to support demand for their innovative products, which are just entering the market.

According to estimates, these measures will generate high-demand projects worth over 10 trillion rubles by 2030. Investment is expected to reach about 2 trillion this year alone. Please note that these are not forecasts, but existing benchmarks.

Therefore, I would like the Government to expedite the launch of these projects, give a hand to businesses and come up with systemic support measures, including tax incentives. I am aware that the financial bloc does not like to provide incentives, and I partly share this approach: the taxation system must be consistent and without niches or exemptions, but this particular case calls for a creative approach.

So, starting this year, Russian companies will be able to reduce their revenue taxes if they purchase advanced domestic IT solutions and AI-enhanced products. Moreover, these expenses will be credited at one and a half times the actual cost, meaning that every ruble invested in purchasing such products will result in a tax deduction of 1.5 rubles.

I propose extending these deductions to purchases of all kinds of Russian high-tech equipment. I would like the Government to come up with a list of such equipment by specific industry and with the procedure for granting deductions. This is a good solution to reinvigorate the economy.

Third, a crucial issue on our economic development agenda to do with the new sources of funding investment, which we have been talking about a lot.

Thanks to our strong payments balance, Russia does not need to borrow funds abroad, kowtow and beg for money, and then hold long discussions on what, how much and on what conditions we would pay back. Russian banks are working stably and sustainably and have a solid margin for security.

In 2022, the volume of bank loans for the corporate sector increased, I repeat, increased. There was considerable concern about that, but we have reported growth, an increase of 14 percent, or more than we reported in 2021, before the miliary operation. In 2021, the figure was 11.7 percent; last year, it was 14 percent. The mortgage portfolio went up by 20.4 percent. We are growing.

Last year, the banking sector as a whole operated at a profit. It was not as large as in the preceding years, but it was considerable nevertheless: 203 billion rubles. This is another indicator of the stability of the Russian financial sector.

According to our estimates, inflation in Russia will approach the target figure of 4 percent in the second quarter this year. I would like to remind you that the inflation rate has reached 12, 17 and 20 percent in some EU countries. Our figure is 4 or 5 percent; the Central Bank and the Finance Ministry are still discussing the figure, but it will be close to the target. Given these positive dynamics and other macroeconomic parameters, we are creating objective conditions for lowering long-term interest rates in the economy, which means that loans for the real economic sector will become more affordable.

Individual long-term savings are a vital source of investment resources around the world, and we must also stimulate their attraction into the investment sphere. I would like the Government to expedite the submission of draft laws to the State Duma to launch the relevant state programme as soon as this April.

It is important to create additional conditions to encourage people to invest and earn at home, in the country. At the same time, it is necessary to guarantee the safety of people’s investment in voluntary retirement savings. We should create a mechanism here similar to the one used for insuring bank deposits. I would like to remind you that such savings, worth up to 1.4 million rubles, are insured by the state on guarantee deposits. I propose doubling the sum to 2.8 million rubles for voluntary retirement savings. Likewise, we must protect people’s investment in other long-term investment instruments, including against the possible bankruptcy of financial brokers.

Separate decisions must be taken to attract funds to rapidly growing and high-tech businesses. We will approve support for the placement of their shares on the domestic stock market, including tax benefits for both the companies and the buyers of their stock.

Freedom of enterprise is a vital element of economic sovereignty. I will repeat: against the backdrop of external attempts to contain Russia, private businesses have proven their ability to quickly adapt to the changing environment and ensure economic growth in difficult conditions. So, every business initiative aimed at benefiting the country should receive support.

I believe it is necessary to return, in this context, to the revision of a number of norms of criminal law as regards the economic elements of crime. Of course, the state must control what is happening in this area. We should not allow an anything-goes attitude here but we should not go too far, either. It is necessary to move faster towards the decriminalisation I mentioned. I hope the Government will consistently and seriously conduct this work together with Parliament, the law-enforcement bodies and business associations.

At the same time, I would like to ask the Government to suggest, in close cooperation with Parliament, additional measures for speeding up the de-offshorisation of the economy. Businesses, primarily those operating in key sectors and industries should operate in Russian jurisdiction – this is a fundamental principle.

Colleagues, in this context I would like to make a small philosophical digression. This is what I would like to single out.

We remember what problems and imbalances the Soviet economy faced in its later stages. This is why after the collapse of the Soviet Union and its planned system, in the chaos of the 1990s, the country began to create its economy along the lines of market relations and private ownership. Overall, this was the right thing to do. The Western countries were largely an example to follow in this respect. As you know, their advisers were a dime a dozen, and it seemed enough to simply copy their models. True, I remember they still argued with each other – the Europeans argued with the Americans on how the Russian economy should develop.

And what happened as a result? Our national economy was largely oriented to the West and for the most part as a source of raw materials. Naturally, there were different nuances, but overall, we were seen as a source of raw materials. The reasons for this are also clear – naturally, the new Russian businesses that were taking shape were primarily oriented toward generating profit, quick and easy profit in the first place. What could provide this? Of course, the sale of resources – oil, gas, metals and timber.

Few people thought about other alternatives or, probably, they did not have the opportunity to invest long-term. This is the reason other, more complex industries did not make much headway. It took us years – other governments saw this clearly – to break this negative trend. We had to adjust our tax system and make large-scale public investments.

We have achieved real and visible change. Indeed, the results are there, but, again, we should keep in mind the circumstances in which our major businesses developed. Technologies were coming from the West, cheaper sources of financing and lucrative markets were in the West, and capital started flowing to the West as well. Unfortunately, instead of expanding production and buying equipment and technology to create new jobs in Russia, they spent their money on foreign mansions, yachts and luxury real estate.

They began to invest in the economy later, but initially the money flowed rapidly to the West for consumption purposes. And since their money was there, that is where their children were educated, where their life was, their future. It was very difficult and almost impossible for the state to track and prevent these developments, because we lived in a free market paradigm.

Recent events have clearly shown that the image of the West as a safe haven for capital was a mirage. Those who failed to understand this in time, who saw Russia only as a source of income and planned to live mostly abroad, have lost a lot. They just got robbed there and saw even their legitimate money taken away.

At some point I made a joke – many may still remember it – I told Russian businesspeople that they will make themselves sick running from courtroom to courtroom and from office to office in the West trying to save their money. That is exactly how it turned out.

You know, I will say something that is quite simple, but truly important. Trust me, not a single ordinary citizen in our country felt sorry for those who lost their assets in foreign banks, lost their yachts or palaces abroad, and so on. In their conversations around the kitchen table, people have all recalled the privatisation of the 1990s, when enterprises that had been built by our entire nation were sold for next to nothing and the so-called new elites flaunted their lavish lifestyle.

There are other key aspects. During the years that followed the breakup of the Soviet Union, the West never stopped trying to set the post-Soviet states on fire and, most importantly, finish off Russia as the largest surviving portion of the historical reaches of our state. They encouraged international terrorists to assault us, provoked regional conflicts along the perimeter of our borders, ignored our interests and tried to contain and suppress our economy.

I am saying this because big business in Russia controls strategic enterprises with thousands of workers that determine the socioeconomic well-being of many regions and, hence, the overall state of affairs. So, whenever leaders or owners of such businesses become dependent on governments that adopt policies that are unfriendly to Russia, this poses a great threat to us, a danger to our country. This is an untenable situation.

Yes, everyone has a choice. Some may choose to live in a seized mansion with a blocked account, trying to find a place for themselves in a seemingly attractive Western capital, a resort or some other comfortable place abroad. Anyone has the right to do that, and we will never infringe on it. But it is time to see that in the West these people have always been and will always remain second class strangers who can be treated any way, and their money, connections and the acquired titles of counts, peers or mayors will not help at all. They must understand that they are second class people there.

There is another option: to stay with your Motherland, to work for your compatriots, not only to open new businesses but also to change life around you in cities, towns and throughout your country. We have quite a few businesspeople like this, real fighters in our business community, and we associate the future of our business with them. Everyone must know that the sources of their prosperity and their future can only be here, in their native country Russia.

If they do, we will create a very strong and self-sufficient economy that will not remain aloof in the world but will make use of all its competitive advantages. Russian capital, the money earned here, must be put to work for the country, for our national development. Today, we see huge potential in the development of infrastructure, the manufacturing sector, in domestic tourism and many other industries.

I would like those who have come up against the predatory mores of the West to hear what I have to say: running around with cap in hand, begging for your own money makes no sense, and most importantly, it accomplishes nothing, especially now that you realise who you are dealing with. Stop clinging to the past, resorting to the courts to get at least something back. Change your lives and your jobs, because you are strong people – I am addressing our businesspeople now, many of whom I have known for years, who know what is what in life.

Launch new projects, earn money, work hard for Russia, invest in enterprises and jobs, and help schools and universities, science and healthcare, culture and sports. In this way, you will increase your wealth and will also win the respect and gratitude of the people for a generation ahead. The state and society will certainly support you.

Let us consider this as a message for our business: get moving in the right direction.

Colleagues,

Russia is an open country and at the same time, a distinct civilisation. There is no claim to exclusivity or superiority in this statement, but this civilisation of ours – that’s what matters. Our ancestors passed it to us and we must preserve it for our descendants and pass it on to them.

We will develop cooperation with friends, with all those who are ready to work with us. We will adopt the best practices but will primarily rely on our own potential, on the creative energy of Russian society, on our traditions and values.

Here I would like to mention the character of our people who have always been distinguished by their generosity, magnanimity, mercy and compassion, and Russia, as a country, fully reflects these traits. We know how to be good friends, how to stand by one’s word. We will never let anyone down and will always support those in a difficult situation without hesitation.

Everyone remembers that during the pandemic we were actually the first to support some European countries, including Italy and other states when they were going through the most difficult weeks of the COVID outbreak, and let’s not forget how we are helping Syria and Turkiye after a devastating earthquake.

It is the people of Russia that are the foundation of our national sovereignty and our source of power. The rights and freedoms of our citizens are immutable – they are guaranteed by the Constitution and we will not depart from this despite the external challenges and threats.

I would like to emphasise in this context that elections to local and regional government bodies next September and the presidential elections in 2024 will take place in strict accordance with the law and observance of all democratic, constitutional provisions.

Elections always reveal different approaches to resolving social and economic goals. That said, the leading political forces are consolidated and united in the main idea – the security and wellbeing of the people; our sovereignty and our national interests override everything else for us.

I would like to thank you for this responsible, firm position and recall the words of Pyotr Stolypin, a patriot and a proponent of a strong Russian state. He said this in the State Duma over a hundred years ago, but it is still consonant with our times. He said: “In the cause of defending Russia, all of us must unite and coordinate our efforts, our commitements and our rights for supporting one historical supreme right – the right of Russia to be strong.”

Volunteers at the frontline include deputies of the State Duma and regional parliaments, representatives from different levels of executive government bodies, municipalities, cities, districts and rural areas. All parliamentary parties and leading public associations are taking part in collecting humanitarian aid to help at the front.

Thank you once again – thank you for such a patriotic stand.

Local governments as a public authority closest to the people play a huge role in strengthening civil society and solving everyday problems. People’s trust in the state as a whole, social welfare of the country’s citizens and their confidence in the successful development of the country depends on how they work.

I would like to ask the Presidential Executive Office and the Government to submit proposals on creating tools of direct support for the best managerial teams and practices in large, medium-sized and small municipalities.

The free development of society means being ready to take responsibility for yourself and your loved ones, for your country. These qualities must be encouraged from a young age in the family. Of course, the system of education and our national culture are extremely important for strengthening our common values and our national identity.

The state will use the resources of the Presidential Grants Foundation, the Foundation for Cultural Initiatives, the Institute for Internet Development and other instruments to support all forms of creative endeavour, such as contemporary and traditional art, realism and avant-garde, classical and innovative works. It is not genres or trends that matter. Culture must serve the good, beauty and harmony, ponder some very complicated and contradictory issues in life, but its main mission is not to tear down society but to nurture the best human qualities.

Cultural development will be a priority of rebuilding peaceful life in Donbass and Novorossiya. We will have to rebuild, repair and provide equipment to hundreds of cultural facilities there, including museum collections and buildings, which help people feel the connection between the past and the present and create a link to the future, to feel their affiliation with the common cultural, historical and educational space of the centuries-old great Russia.

We must work together with our teachers, academics and professionals to seriously improve the quality of school and university textbooks, first of all in the humanities – history, social science, literature and geography – so that our young people learn as much as possible about Russia, its great past, its culture and traditions.

We have brilliant, talented young people who are willing to work for the benefit of our country in areas like scientific research, culture, the social sphere, business and public administration. The Leaders of Russia competition, as well as the Leaders of Revival competition currently taking place in the new constituent entities of the Federation, are opening up new horizons for career growth for these very people.

Notably, a number of winners and finalists in these competitions have voluntarily joined military units. Many of them are now working in the liberated territories helping rebuild economic and social life, and they are acting professionally, decisively and courageously.

Generally speaking, nothing can replace the school of war. People return entirely different, and they are ready to lay down their lives for the Fatherland, wherever they may be working.

Let me stress that it’s precisely those who were born and raised in Donbass and Novorossiya, who have fought for them, they will be and should form the foundation of our joint effort to develop these regions. I want them to hear me: Russia is counting on you.

With the ambitious tasks facing our country in mind, we must seriously revise our approaches to the system of professional education, to our science and technology policy.

At the recent meeting of the Council for Science and Education, we discussed the need to prioritise our efforts, to concentrate resources on obtaining specific and fundamentally meaningful scientific results, primarily in areas where we have done a fair amount of work and which are of critical importance to our country, including transport, energy, housing and utilities, public healthcare, agriculture, and the manufacturing industry.

Innovative technology invariably relies on existing fundamental research. Here, just like in culture – and I want to emphasise this – we must give researchers greater freedom for creativity. We should not have everyone just focused on the results that we will need tomorrow. Fundamental science makes its own rules.

Also, setting and fulfilling ambitious goals is a powerful incentive for young people to choose science as their field and a chance to prove their leadership skills and being the best in the world. Our research teams have much to be proud of.

Last December, I met with some of our young researchers. One of their questions concerned housing. A mundane, but important issue. Housing certificates for young researchers are already available. Last year, an additional one billion rubles was set aside for these purposes. I hereby instruct the Government to identify reserves to expand this programme.

In recent years, the prestige of secondary vocational education has grown significantly. The demand for graduates of technical schools and colleges is just huge, colossal. You see, if our unemployment has fallen to a historic low of 3.7 percent, it means that people are working, new personnel is needed.

I believe that we should significantly expand the Professionalitet project, under which educational and industrial clusters are created, the educational base is updated, and enterprises and employers develop educational programmes based on the needs of the economy in close contact with colleges and technical schools. And of course, it is very important for mentors with experience in real, complex production to join in.

The task is clear: in the next five years we need to train about a million specialists of working professions for the electronics industry, the robotics industry, mechanical engineering, metallurgy, pharmaceuticals, agriculture and the defence industry, construction, transport, nuclear and other industries that are key to ensuring the security, sovereignty and competitiveness of Russia.

Finally, a very important question is about our higher education. Significant changes are also overdue here, considering the new requirements for specialists in the economy, social sectors, and in all spheres of life in our country. What we need here is a synthesis of all the best that was in the Soviet system of education and the experience of recent decades.

In this regard, the following is proposed.

First, to return to the basic training of specialists with higher education, which is traditional for our country. The term of study can be four to six years. At the same time, programmes can be offered that differ in terms of training, depending on the specific profession, industry and labour market demand even within the same specialty and one university.

Second, if a profession requires additional training or niche specialisation, in this case a young person will be able to continue education by doing a master’s degree or choosing residency training.

Third, postgraduate studies will be made into a separate level of professional education, the task of which is to train personnel for scientific and teaching professions.

I want to emphasise that the transition to the new system should be smooth. The Government, together with parliamentarians, will need to make numerous amendments to legislation on education, on the labour market, and so on. Here you need to think everything through, work out every detail. Young people, our citizens should have new opportunities for quality education, employment and professional growth. I repeat: opportunities, not problems.

And I would like to specifically note that those students who are studying now will be able to continue their education under existing programmes. And also, the level of training and higher education diplomas of citizens who have already completed studies under current undergraduate, specialist or master’s programmes are not subject to revision. They must not lose their rights. I ask the Russian Popular Front to take all issues related to changes in the field of higher education under special control.

This year was declared the Year of the Teacher and Mentor in Russia. Teachers are directly involved in building the country’s future, and it is important to raise the social status of their work. Parents should talk to their children more about gratitude for their teachers, and teachers should instil in children respect and love for their parents. Let’s always remember this.

I will talk about support for children and Russian families in a minute.

I would like to note that the so-called children’s budget, or budget allocations to support families in Russia, has increased manifold rather than by a small percent over the past few years. These expenses are the fastest growing part of the country’s main financial document – the budget, the law on the budget. I would like to thank the parliament members and the Government for their uniform, consolidated understanding of our national priorities.

On February 1, the maternity capital in Russia was again adjusted for inflation. As we promised, it was adjusted by last year’s inflation rate, that is, by 11.9 percent. Russian citizens – residents of the new regions of the Federation – are also entitled to this support now. I suggest granting maternity capital to families in the Donetsk and Lugansk people’s republics and the Zaporozhye and Kherson regions where children were born starting from 2007, that is, when this programme was launched throughout Russia. I will recall that at one time we made a similar decision for the residents of Crimea and Sevastopol.

We will continue implementing large-scale programmes aimed at improving the living standards of Russian families.

I would like to emphasise that the Government and the regions of the Federation have been given a practical goal – to ensure noticeable, tangible growth in real wages in Russia.

As we all know, an important indicator, a starting point here is the minimum wage. We raised it twice last year, almost by 20 percent overall.

We will continue raising the minimum wage, doing it at a rate that is higher than the inflation rate and the real wage growth rate. Since the start of this year, the minimum wage was adjusted by 6.3 percent.

I suggest supplementing the planned increase by an additional 10 percent starting January 1, 2024. Thus, the minimum wage will have grown by 18.5 percent to constitute 19,242 rubles.

Now I would like to mention adjustments to the taxation system for the benefit of Russian families. Starting last year, families with two or more children have been relieved of paying tax on the sale of housing if they are purchasing a new, bigger flat or house.

It is necessary to make better use of these instruments – they have proven to be in demand. Families should have more money in their family budgets to be able to resolve their most important and urgent problems.

I suggest increasing the amount of social tax deductions: for children’s education costs – from current 50,000 rubles to 110,000 rubles per year, and for costs on personal education, medical treatment or purchase of medications – from current 120,000 to 150,000 rubles. The state will reimburse the 13 percent income tax paid on these increased amounts.

Naturally we need not only to increase this deduction, but also to make this benefit easily available to people. This deduction should be granted proactively, quickly and online. This process should be easy for applicants.

Next. The well-being, the quality of life of Russian families, and therefore the demographic situation, depend directly on the state of things in the social sphere.

I know that many regions of the Federation are ready to significantly speed up renovation of social infrastructure, cultural and sports facilities, relocation of people from dilapidated housing, and comprehensive development of rural areas. This attitude will certainly be supported.

We will use the following mechanism here: the regions will be able to receive now and use the funds that have been set aside in the 2024 federal budget for national projects, through interest-free treasury loans – they will be automatically repaid in April of 2024. It is a good tool.

We will keep this issue under constant review, and I ask the State Council Commission On Economy and Finance to become involved in this work.

However, we don't need to rush and chase after numbers, especially to the detriment of the quality of the facilities being built. Additional financial resources must be used efficiently to give a high return.

This is particularly vital for the modernisation of primary health care, a large-scale programme that we launched in 2021. I ask the Government and regional leaders not to forget that the benchmark – I have said this many times – is not the numbers in reports, but concrete, visible, tangible progress in the availability and quality of medical care.

I also instruct the Government to adjust the regulatory framework for organising the procurement of ambulances with diagnostic equipment. They allow for medical check-ups and preventive examinations to be carried out directly at enterprises, schools, offices and in remote communities.

We have launched a large-scale school renovation programme. By the end of this year, a total of almost 3,500 school buildings will have been renovated. I would like to point out that most of them are in rural areas and we have done this on purpose. This year such work is also being carried out in the Donetsk and Lugansk people's republics, in the Kherson and Zaporozhye regions. It is meaningful and visible, people really see what is happening. This is very good.

From 2025 onwards, federal funds will be regularly and systematically allocated to the regions for repairing and renovating kindergartens, schools, vocational schools and colleges so as to avoid situations where buildings are in dilapidated condition.

Next, we have set a major goal, to build more than 1,300 new schools between 2019 and 2024. Of these, 850 are now open. Another 400 will open this year. I want the regions to stay on track to meet these objectives. The amount of federal funding for this 2019–2024 programme is almost 490 billion rubles. We will not cut these costs, we will keep this amount intact.

This year, we increased the amount of infrastructure budget loans. We are sending additional funds, not as previously planned, but an additional 250 billion rubles for expanding transport, utility and other infrastructure in the regions.

I hereby instruct the Government to allocate, in addition to these funds, an additional 50 billion rubles – which will be purposefully used to upgrade public transport in the constituent entities of the Federation this year. This upgrade will be used for the latest technology. Please pay special attention to small towns and rural areas.

We have decided to extend the Clean Air project through 2030. The goal is to improve the environment in major industrial centres. I want industrial companies and regional and local authorities to keep in mind that a significant reduction in harmful emissions remains on the agenda.

In addition, we have accomplished much in reforming the waste management industry. We are building up recycling and sorting capacity which will help us build a closed-loop economy. Further elimination of old landfills and hazardous material sites is our top priority. I want the Government, in conjunction with the regions, to draft a list of harmful sites that will be eliminated upon the completion of this programme.

We will continue to restore unique water bodies, including Lake Baikal and the Volga River. In the medium term, we will extend this work to other rivers such as the Don, Kama, Irtysh, Ural, Terek, Volkhov and Neva rivers, and Lake Ilmen. We must not forget about medium and small rivers. I want all levels of government to pay attention to this.

As part of an earlier instruction, a draft law on promoting tourism in specially protected nature areas has been submitted. It was recently discussed at a meeting with the Government. It should clearly define what can be built and where and what cannot, and generally set forth the principles of the ecotourism industry. This is a critically important issue for our country. I ask the State Duma to speed up consideration of this draft law.

Now I will say a few words about what is happening around us.

Colleagues, I will talk about one more issue.

In early February, the North Atlantic alliance made a statement with actual demand to Russia, as they put it, to return to the implementation of the Strategic Arms Reduction Treaty, including admission of inspections to our nuclear defence facilities. I don’t even know what to call this. It is a kind of a theatre of the absurd.

We know that the West is directly involved in the Kiev regime’s attempts to strike at our strategic aviation bases. The drones used for this purpose were equipped and updated with the assistance of NATO specialists. And now they also want to inspect our defence facilities? In the current conditions of confrontation, it simply sounds insane.

I would like to draw your attention specifically to the fact that they are not letting us conduct full-scale inspections under this treaty. Our repeated applications to inspect different facilities remain unanswered or are rejected under formal pretexts, and we cannot verify anything on the other side.

I would like to stress that the United States and NATO are openly saying that their goal is to inflict a strategic defeat on Russia. And what, after such statements they are supposed to tour our defence facilities, including the latest ones, as if nothing happened? A week ago, I signed an executive order putting new land-based strategic systems on combat duty. Are they going to poke their nose there as well? Do they think we will let them go there just because?

Having made this collective statement, NATO actually claimed to be a participant in the Treaty on Strategic Offensive Arms. We agree with this, please go ahead. Moreover, we believe this framing of the issue is long overdue. Let me recall that the US is not the only nuclear power in NATO. Britain and France also have nuclear arsenals. They are developing and upgrading them and these arsenals are also directed against us – they are also directed against Russia. The latest statements by their leaders merely confirm it – listen for yourselves.

We cannot just ignore this and have no right to do so especially now. Nor can we forget that the Soviet Union and the United States initially signed the first Treaty on Strategic Offensive Arms in 1991 in a completely different situation – in conditions of abating tensions and growing mutual trust. Subsequently, our relations reached a level that allowed Russia and the US to say they no longer considered each other enemies. Wonderful, everything was going very well.

The Treaty of 2010 that is in force contains critically important provisions about indivisible security and the direct link between strategic offensive and defensive arms. All of that has long been forgotten. The United States withdrew from the ABM Treaty. It is now a thing of the past. Importantly, our relations have degraded which can be credited entirely to the United States.

After the Soviet Union broke up, they began to revise the outcomes of World War II and to build an American-style world ruled by one master. To do this, they began to rudely destroy the foundations of the international order laid down after WWII in order to cross out the legacy of the Yalta and Potsdam conferences. Step by step, they proceeded to revise the existing international order, to dismantle security and arms control systems, and plotted and carried out a series of wars around the world.

To reiterate, all of that was done for the sole purpose of dismantling the post-WWII architecture of international relations. This is not a figure of speech. This is how it all unfolded in reality. After the Soviet Union collapsed, they sought to perpetuate their global dominance regardless of the interests of modern Russia or other countries for that matter.

Sure enough, the international situation changed after 1945. New centres of growth and influence have been formed and are rapidly expanding. This is a natural and objective process that cannot be ignored. But the United States trying to refashion the international order to suit exclusively its own needs and selfish interests is unacceptable.

Now, they are using NATO to give us signals, which, in fact, is an ultimatum whereby Russia should, no questions asked, implement everything that it agreed to, including the New START Treaty, whereas they will do as they please. As if there is no connection between strategic offensive weapons and, say, the conflict in Ukraine or other hostile Western actions against our country. As if there are no vociferous claims about them seeking to inflict a strategic defeat on us. This is either the height of hypocrisy and cynicism, or the height of stupidity, but they are not idiots. They are not stupid after all. They want to inflict a strategic defeat on us and also to get to our nuclear sites.

In this regard, I am compelled to announce today that Russia is suspending its membership in the New START Treaty. To reiterate, we are not withdrawing from the Treaty, but rather suspending our participation. Before we come back to discussing this issue, we must have a clear idea of what NATO countries such as France or Great Britain have at stake, and how we will account for their strategic arsenals, that is, the Alliance's combined offensive capabilities.

Their statement comes, in fact, as a request to join this process. Well, come onboard, we do not mind. Just try not to lie to everyone this time and present yourselves as champions of peace and detente. We know the truth. We are aware of the fact that certain types of US nuclear weapons are reaching the end of their service life. In this regard, we know for certain that some politicians in Washington are already pondering live nuclear tests, especially since the United States is developing innovative nuclear weapons. There is information to that effect.

Given these circumstances, the Defence Ministry and Rosatom must make everything ready for Russia to conduct nuclear tests. We will not be the first to proceed with these tests, but if the United States goes ahead with them, we will as well. No one should harbour dangerous illusions that global strategic parity can be disrupted.

Colleagues, citizens of Russia,

Today, we are together living through challenging times and overcoming all difficulties together as well. It could not have been otherwise because we have been raised on the example of our great ancestors and must be worthy of their behests that are passed down from generation to generation. We are moving only forward owing to our devotion to our Motherland, our will and our unity.

This cohesion was on display from the first days of the special military operation – hundreds of volunteers, representatives of all ethnicities of our country came to recruitment offices. They decided to stand by the defenders of Donbass, to fight for their native land, for their Fatherland, for the truth and justice. Today, warriors from all regions of our multi-ethnic Motherland are fighting shoulder to shoulder on the frontlines. They pray in different languages, but they all pray for victory, for their fellow soldiers and for the Motherland. (Applause.)

Their difficult military labour, their exploits are finding a powerful response all over Russia. People are supporting our fighters. They don’t want to stay on the sidelines. The front is now passing through the hearts of our people in their millions. They are sending medicine, communication devices, transport, warm clothes and camouflage nets, to name a few – everything that helps protect the lives of our fighters.

I know the comfort letters from children and schoolkids give to our soldiers at the front. They take them into battle as a cherished possession because the sincerity and purity of children’s wishes bring tears to their eyes. They feel more forcefully for whose sake they are fighting and whom they are defending.

Warriors, their families and civilians greatly appreciate the care with which volunteers are surrounding them. They have been acting boldly and decisively from the very start of the special military operation. Under fire and shelling they are leading children, elders and all those in trouble out of basements; they were and still are bringing food, water and clothes to hot spots; they are setting up humanitarian aid centres for refugees and helping doctors in field hospitals and on the combat contact line; they continue to risk their lives to save others.

The Russian Popular Front alone raised over five billion rubles as part of the All for Victory initiative. The flow of donations does not stop. Every contribution is important and this applies to those made by large companies and businesspeople. But especially touching and inspiring are the donations of people with modest incomes, which are contributing part of their savings, salaries and pensions. This coming together to help our warriors, civilians in the zone of hostilities and refugees is worth a lot.

Thank you for this sincere support, cohesion and mutual aid. It is impossible to overstate their importance.

Russia will meet any challenges because we are all one country, a big and united nation. We are confident in ourselves and confident in our strength. The truth is on our side. (Applause.)

Thank you.

The Anthem of the Russian Federation plays.

Presidential Address to the Federal Assembly

2021-05-13T10:49:59+04:00

The President of Russia delivered the Address to the Federal Assembly. The ceremony took place at the Manezh Central Exhibition Hall.

The ceremony was attended by the senators of the Russian Federation, State Duma deputies, members of the Government, the heads of the Constitutional and Supreme courts, regional governors, speakers of regional legislatures, the heads of traditional religious denominations and public activists.

* * *

President of Russia Vladimir Putin: Members of the Federation Council, State Duma deputies,

Citizens of Russia,

Today’s Presidential Address to the Federal Assembly will be dedicated mostly to internal issues. These include, naturally, healthcare, social policy and the economy. Of course, I will say a few words about external affairs and literally a few words about security issues.

It stands to reason that I will begin with last year’s events, when our country and, actually, the entire world faced a new, previously unknown and extremely dangerous infection.

It that period, including during our meetings with experts and conversations with the leaders of many states, I often heard the following description of the situation: we are faced with total uncertainty. And this is how it really was.

I could see this from the information I received from the regions. The number of people who contracted the disease and needed to be rushed to hospital kept growing. Actually, all of you are very well aware of this. Many hospitals were filled to capacity and reported that they could run out of oxygen soon, including in intensive care units. Ventilators, protective masks and PPE were actually distributed by the piece. Shops were running out of basic products, such as cereals, butter and sugar, due to increased demand.

The epidemic was on the offensive. But although there was great concern, I personally had no doubt that we would pull through.

Citizens, society and the state acted responsibly and in unison. We rallied, managed to take preventive action, to create conditions that would reduce the risk of infection, and to provide medical personnel and citizens with personal protective equipment. We increased the number of hospital beds for coronavirus patients more than five times over, to 280,000 beds.

The brief outline of measures conceals the tremendous and intensive work of millions of people in all regions of the Russian Federation. I would like to cordially thank all of you for this. Everyone worked quickly, efficiently and conscientiously.

At that time and later on, we were analysing the situation practically non-stop. I recall vividly my visit to the hospital in Kommunarka. It was necessary to experience, to see at first hand the danger facing us and to assess the working conditions of medical specialists. They immediately found themselves in the thick of events and fought for every life, while risking their own.

Today, doctors, paramedics, medical nurses and members of ambulance teams are sitting here in this hall. Once again my heartfelt thanks to you and your colleagues from all the Russian regions.

Russian researchers made a real breakthrough, and Russia now has three reliable coronavirus vaccines. These and many other achievements of the past few years highlight the country’s growing science and technological potential.

I would like to thank everyone, every person who contributed to the fight against infection, including the workers at the plants manufacturing medications, medical equipment, personal protective equipment, and enterprises working 24 hours a day, housing and utility agencies, trade companies, the Russian business community that quickly converted entire sectors so that they could manufacture essential goods, civilian and military builders, agriculture workers who gathered a record-breaking harvest, one of the biggest in the country’s history, that is, over 130 million tonnes.

The personnel of law enforcement agencies and the special services continued to carry out their duty, and the Russian Armed Forces reliably ensured our country’s security.

I would like to underscore the selfless behaviour of people working for social services, orphanages, boarding schools, retirement homes and hospices who stayed and who continue to stay with their charges. You will certainly agree with me that, while analysing developments at these institutions, one feels proud of people who are carrying out their duty there in such a responsible manner. It could move you to tears. I would like to thank them once again.

I would also like to convey my sincere gratitude to school teachers and the lecturers at universities and other education institutions. You did everything possible to enable your students and pupils to gain knowledge and successfully pass their exams, with the involvement and support of their parents.

Russia’s cultural life continued unabated. Theatres, museums and concert halls remained open to audiences online thanks to modern technology. Everyone who works in this crucial sphere rose to the occasion.

Our people showed discipline and managed to observe, let’s face it, quite exhausting, but vital precautions. Thus, acting together, we have put up an effective barrier to the pandemic.

The people’s solidarity showed in concrete actions, in caring for the loved ones and in willingness to help people in need. Millions became volunteers and engaged in building person-to-person help routes. The nationwide We Are Together campaign brought together people from different walks of life and ages. As always during challenging times, our traditional religions stepped up to provide spiritual support to the society. I see the leaders of our religions here and I would like to bow deeply to you, thank you very much

Throughout history, our people have come out victorious and overcome trials thanks to unity. Today, family, friendship, mutual assistance, graciousness and unity have come to the fore as well.

Spiritual and moral values, which are already being forgotten in some countries, have, on the contrary, made us stronger. And we will always uphold and defend these values.

Colleagues,

The pandemic broke out at a time when the aftermath of the demographic shocks of the 1940s and 1990s converged. We realise that the current demographic situation is an emergency. Unfortunately, this is how things are. We must accept and admit it and do something about it based on our understanding of this situation.

Saving the people of Russia is our top national priority. This priority underlies the stipulations of the updated Constitution concerning the protection of the family, the important role parents play in bringing up their children, strengthening social guarantees, and further developing the economy, education and culture.

Our strategy is to return to sustainable population growth to make sure that the average life expectancy in Russia increases to 78 years in 2030.

Unfortunately, the statistics show us sad and disappointing numbers. We are even seeing a certain decline. It is clear what is happening because of the pandemic, but we will keep our strategic goals in this critical sphere unchanged.

I fully realise that this is no small feat, the more so as the coronavirus has not yet been completely defeated and remains a direct threat. We see the dramatic developments in many countries where the cases of infection continue to grow. We need to keep in check the defence barriers designed to slow down the spread of the virus along our external borders and within our country.

I would like to address all citizens of Russia once again. Friends, please stay alert. I am asking you to take care of yourselves and your loved ones and to comply with the doctors’ and sanitary services’ recommendations as closely as possible.

Vaccination is of crucial importance. I would like to ask the Government, the Healthcare Ministry and the heads of the regions to monitor this process on a daily basis. The opportunity to take the jab must be available everywhere, so that we achieve the so-called herd immunity by the autumn.

The attainment of this goal depends on everyone, on all our citizens. Please, I am asking all citizens of Russia once again to get vaccinated. This is the only way to stop this deadly epidemic. There is no alternative. The other choice is much worse: to contract the disease with unpredictable consequences.

I would like to say once again that the disease is still with us. But we must start thinking already now about healing the wounds it has inflicted and restoring people’s health.

During the peak periods, our hospitals and outpatient clinics had to reduce or even suspend scheduled visits. This increased the risk of the aggravation of chronic illnesses or the risk of missing the first signs of or correctly diagnosing new illnesses.

I would like to ask the Government, the Healthcare Ministry and the constituent entities of the Russian Federation to expand the system of medical check-ups and periodic screenings, taking into account the current epidemiological situation, and to relaunch them in full measure on July 1, 2021 for people of all ages. They must involve the largest number of people possible. This is why we will increase the supply of mobile medical diagnostic systems to the regions in the near future.

One of the targets of the coronavirus is the cardiovascular system. These diseases have always been the leading cause of death. Therefore, special attention during periodic screenings must be given to people with cardiovascular diseases. I would like to instruct the Government to take additional measures to prevent the diseases that are the main causes of premature death. As I have already mentioned, these are cardiovascular diseases plus malignant tumours and respiratory system diseases.

Hepatitis C claims many young lives. Decisions must be made to reduce this threat to the health of the nation to a minimum within 10 years.

To ensure that as many people as possible can restore their health at sanatoriums and health resorts, I propose that the 20 percent rebate programme for domestic travel is extended at least until the end of the year.

Children’s health is our special priority. Indeed, the foundation for good health for many years to come is laid during childhood. Children's rest and recreation activities must be made as affordable as possible. In this regard, this year, I propose reimbursing half of what parents spend on their children’s summer camps.

In addition, we need to expand opportunities for student tourism. Already this year, we must launch several pilot projects, including accommodation on university campuses and in dormitories in other regions for students who travel around the country during the summer.

And, of course, we must reward the young people who have done well in academic competitions and in volunteer and creative initiatives as well as the projects operated by the Russia – Land of Opportunity platform. For them, the partial reimbursement programme for tourist vouchers will remain valid during the holidays, aka the high season. This is a ground-breaking decision.

I wish to thank all the parliamentary groups which supported the decision on the taxation of high incomes, or rather, a portion of high incomes. These proceeds will go to the dedicated Circle of Kindness fund and have already been released to help children affected by rare and serious diseases, to purchase expensive medicines and medical equipment, and to cover the costs of surgeries.

On April 28, we will celebrate Ambulance Worker Day which was established as a show of respect to those who arrive first to save lives. These specialists must be provided with all necessary supplies. Within the next three years, we will make another 5,000 new ambulances available to rural communities, urban-type localities and small towns, which will replace the ambulance fleet almost in full.

I want to emphasise that public healthcare authorities in many leading countries – we are well aware of it and, in fact, they themselves are saying so – were unable to deal with the challenges of the pandemic as effectively as we did in Russia. At the same time, global health care is on the cusp of a genuine revolution. This must be recognised and clearly seen. We cannot miss it.

The pandemic has exponentially sped up the introduction of telemedicine, artificial intelligence and new approaches in diagnostics, surgery, rehabilitation and the production of medicines everywhere. We must put these technologies at the service of the people of our country.

We must build our healthcare system around this ground-breaking technology, and keep an eye on pressing everyday problems in the process. As we are all aware, they abound, mostly in primary care. There must be no such thing as waiting lines, no hassle making a diagnostics appointment or a specialist doctor appointment, or obtaining prescriptions and sick leaves, for that matter. This has often come up in our discussions lately. The funds have been set side and allocated. It is time to move quickly and efficiently to make it happen.

We have a backlog to deal with in healthcare and other social sectors, including many technical, financial and managerial challenges. However, what people need is qualified and timely medical help. I propose reviewing public healthcare problems from this perspective at an expanded meeting of the State Council some time soon. We will prepare for it and hold it shortly.

I repeat: we have gained some fundamentally new experience in fulfilling our social commitments. During the pandemic, we made direct payments to families bringing up almost 28 million children, and they received their benefits without any unnecessary paperwork or other kinds of red tape – they got the money they needed and were entitled to automatically. I know Government members have been working on this, focusing deliberately, not without some failures, but they have made every effort to accomplish this task, and coped with it. This is great, this is a good example. This approach should become the norm at all levels of government.

This is the essence of the National Social Initiative, which was discussed at a recent joint meeting of the State Council Presidium and the Agency for Strategic Initiatives.

I am calling on the regional governors: it is your direct responsibility to organise the work of local clinics, daycare nurseries and schools, and employment centres, based on the daily needs of families, of each and every person. In many regions, I have seen with my own eyes that such work has already been launched in certain areas. This needs to be done everywhere and in all social sectors.

As soon as in 2022, we must introduce the ‘social treasury’ principles. This means that all federal benefits, pensions and other social payments and services will be provided and paid in a one-stop mode, without having to visit dozens of different agencies, but simply upon marriage, the birth of a child, retirement or other life milestones. Within three years, the vast majority of public and municipal services should be provided to Russian citizens remotely, 24 hours a day, seven days a week, that is, on an ongoing basis.

Separately, we will have to discuss child-support payments, which are a sensitive topic for many families. Unfortunately, this is a problem in our country. This procedure should not be humiliating for anyone. Most issues here need to be resolved remotely and, most importantly, in the interests of the affected party. A mother with a child should not have to camp on the doorstep of various authorities to collect official documents, carrying her baby in her arms, and this is what usually happens. A system of interagency communication needs to be built, with banks included, in such a way as to ensure the unconditional execution of court decisions on the recovery of child-support payments. The state is obliged to protect the rights of the child; this is what we are talking about. I will return to this topic again later.

Colleagues,

We understand the heavy toll that the pandemic has taken on people’s welfare. Statistics show the aggravating effects of this outbreak on social inequality and poverty. It has been a challenge for all countries around the world – remember, all countries, not only Russia, are experiencing the same consequences. Certainly, we should be primarily concerned about the situation in our own country.

We are now facing price hikes that are undercutting people’s incomes. Some urgent decisions have been made, of course, but we cannot solely rely on targeted and essentially directive measures. We remember potential outcomes. Back in the late 1980s and the 1990s in the Soviet Union, they resulted in empty store shelves. But today, even when the pandemic was at its worst, we did not allow the same thing to happen.

The Government’s goal is to create conditions that will be long-term and which, I want to stress this part, colleagues, can, thanks to market mechanisms (which we have), guarantee the predictability of prices and quality replenishment of the domestic market. Nobody is saying that we will be setting prices from the top. There’s no need to muddy the waters and scare people. There are market regulatory mechanisms and they must be employed – promptly and to the extent required and appropriate to a specific situation in the economy and social sphere. We need to stimulate investment activity by reducing business risks. The two are not mutually exclusive.

Surely, the main goal right now is to ensure that people’s real incomes grow – that is, to restore them and secure their further growth. As I said, we need tangible changes in our fight against poverty.

Before anything else, the Government must provide direct support to families with children who are experiencing hardships. This has been our consistent policy and we will continue to pursue it.

We already have a system of benefits paid to parents of one or two children from the time the children are born and until they reach the age of three. Families with incomes below two subsistence minimums per family member are entitled to such benefits. The average monthly amount paid across the country is 11,300 rubles per child. Seventy-eight Russian regions pay benefits for the third child, also 11,300 rubles on average.

Please note that we are making consistent progress in this area, step by step. Last year, we introduced benefits for children aged three to seven. They range from 5,650 to 11,300 rubles per month depending on the region.

I instruct the Government to develop, by July 1, a comprehensive system of support for families with children. Our goal is to minimise the risk of poverty for such families.

But a number of new decisions need to be taken immediately, already today. It is always difficult for a single parent to raise a child. There are plenty of reasons for that. And this is not about the reasons but about supporting children. It is particularly difficult when a single-parent family is having financial problems, especially when children start going to school and family expenses objectively rise.

In particular, we must support single-parent families, where a mother or a father is bringing up a child alone, and only one of the parents is registered on the birth certificate – sorry to be speaking of such mundane things, but this is a fact of life – or the parents have divorced and one of them has the right to child-support payments. Therefore, as of July 1 this year, all children in such families aged between 8 and 16, inclusively, will receive a benefit. The national average of such benefit will be 5,650 rubles.

Of course, we must also help women who are expecting a baby and who have financial problems. It is extremely important for a mother-to-be to get support from the state and society, so that they can keep their pregnancy and know that they will receive help in raising and bringing up their child.

I propose approving a monthly subsidy for women who register at a maternity centre during early pregnancy and who have financial problems. The average subsidy for them will be 6,350 rubles a month.

Next, the sick pay for taking care of a child who falls ill depends on the employment record, which is correct, on the whole, and fair. However, young women receive much smaller sick leave payments. We have discussed this issue at the State Council, and it has been raised by the United Russia. We need to adopt legal decisions on this matter without delay, so that payments for taking care of a sick child aged up to 7 years inclusively are approved at 100 percent of the parent’s salary as soon as this year.

You understand what this means. The majority of those in this room know that the longer the employment record the larger the sick pay. Women who have a long work record usually receive full sick pay, but they usually do not have children at their age. Those who have children do not receive full pay. We must definitely help those who are expecting a baby.

I would also like to remind you that we have expanded and extended the maternity capital programme up until 2026. This benefit will now be paid already for the first child. We could not afford this before. The maternity capital has been adjusted to inflation and is almost 640,000 rubles

Free hot meals for all primary school children were approved as of January 1, 2020, and this measure has become a great help for families.

I would like to point out that all our decisions were designed to support our people. I know that many and very many people have financial problems now. The labour market and real disposable income of the people will be certainly restored, and we will move on. This has not happened yet. Therefore, I suggest approving one more one-off payment for the families that have school children, namely, 10,000 rubles per schoolchild. Moreover, this payment will also be made for the children who will only start school this year. We will transfer the money in mid-August, so that parents can get their children ready for school.

The updated Constitution of Russia includes clauses on demographic development, and protection of the family and childhood. They should be implemented in practice at all levels of government. I propose including a section aimed at supporting young people in each national project.

Friends,

During the pandemic, many young doctors and nurses, recent graduates as well as residents and students of medical universities worked courageously in the so-called red zones, joining their senior colleagues. In that extraordinary situation, teachers, schoolchildren, college and university students continued to teach and study, to have exams. Young family members supported their parents and older relatives. The youth of Russia proved to be extremely worthy during that period of trials. We can be proud of them.

We will do everything to open up as many life opportunities as possible for the younger generation. Their journey certainly begins at school, and I am sure that school will always be a second home for children; a new home, comfortable and modern.

Under the existing federal programme and with additional resources provided by the VEB Development Bank, we will build at least 1,300 new schools for more than a million children by the end of 2024. We will also purchase at least 16,000 school buses over the next four years. All school buses must be modern and safe.

Classroom teachers have been receiving a monthly addition to their salaries since last year. A very necessary and, I am sure, fair decision. I remember how we held discussions on this matter last year.

However, I have received requests, letters from teachers in secondary vocational institutions who say they have been forgotten. This is actually true. Justice must be restored. We have to fix this and establish the same additional payment of 5,000 rubles for supervisors of educational groups at technical schools and colleges.

I propose allocating an additional 10 billion rubles in the next two years for major repairs and technical equipment of our pedagogical universities. I ask the Government to pay close attention to up-to-date training of future teachers. The future of Russia largely depends on them.

Furthermore, school teaching teams should be expanded with teaching assistants, mentors and counsellors, whose job will be to organise exciting projects for children at schools.

It is very important that our young people should look to and be inspired by the achievements and victories of our outstanding ancestors and contemporaries, by their love for our Motherland and aspiration to make a personal contribution to its development. Children should have the opportunity to explore the national history and the multinational culture, our achievements in science and technology, literature and art in advanced formats. You know, I still open certain school textbooks occasionally and am surprised at what I see there – as if what is written there has nothing to do with us at all. Who writes such textbooks? Who approves them? It is unbelievable. They mention everything, the ‘second front’ and a lot of other facts, but not the Battle of Stalingrad – how is that possible? Amazing! I do not even want to comment.

I propose allocating an additional 24 billion rubles within the next three years to renovate cultural centres, libraries and museums in rural areas and small historical towns. This is another crucial area.

It is important to resume the activities of the Knowledge Society – we all remember well what it is – based on a modern digital platform. It seems to have been operational lately, but no one seems to notice it is there, either. Also, in order to support projects in culture, art and creative activities, we will set up a Presidential fund for cultural initiatives. Already this year, we will use its competitive grants to finance over 1,500 creative teams.

Colleagues,

A month from now, 11^th grade students will be taking exams. Based on the results, most of them, about 60 percent, will enrol in universities and have their tuition covered from the budget. It can be safely stated that practically no country in the world apart from Russia has this kind of broad and free access to higher education.

In the next two years, we will make an additional 45,000 state-funded places available at our universities. At least 70 percent of them will go to the regions which need university graduates.

Starting this year, at least 100 universities in the constituent entities of our Federation will receive grants in the amount of 100 million rubles or more for opening student technoparks and business incubators, upgrading academic and laboratory facilities, and running training programmes. All state universities will be eligible for this support, including the ones that train future teachers, medical doctors, transport and culture workers. I am confident that the young generation of Russians, Russian scientists, will make their names known in the meaningful research projects that are yet to come.

This year was declared Science and Technology Year in our country. We realise that science is absolutely key in the modern world. Until 2024, Russia will allocate 1.63 trillion rubles from the federal budget alone for civil, including fundamental, research. But that is not all.

We are about to launch ground-breaking programmes in areas that are critical to our country. They will be given the status of nationwide projects. I would like to discuss some of them separately just to give you a sense.

First, we must have a solid and reliable shield to give us sanitary and biological safety. We now understand what it is about. It is imperative to ensure Russia’s independence in the production of the entire range of vaccines and pharmaceutical substances, including medications against infections that are resistant to the current generation of antibiotics. Importantly, this must be achieved with the maximum engagement of Russian-made equipment and domestic components.

In the event of an infection as dangerous as the coronavirus, or, God forbid, even more dangerous, Russia must be prepared to develop its own test systems within four days, precisely four days, and to create an efficacious domestic vaccine and start its mass production as soon as possible. These are the goals that we are setting for ourselves. The timeframe for achieving these goals is 2030. But the sooner we get there, the better.

Second, we need new comprehensive approaches to the development of our energy sector, including new solutions for nuclear generation in the promising areas of hydrogen energy and energy storage.

Third, we must find answers to the climate change challenges, adjust our agriculture, industry, the housing and utilities sector and the entire infrastructure to them, create a carbon utilisation sector, bring down emissions and introduce strict control and monitoring measures.

Over the next 30 years, the cumulative emissions in Russia must be smaller than in the EU. It is an ambitious goal, considering the size of our country and the specific features of its geography, climate and economic structure. However, I have no doubt whatsoever that it is a perfectly realistic goal in light of our research and technological potential.

Our new energy and pharmaceutical sectors and the solution of climate problems must provide a powerful boost to a comprehensive modernisation of all economic sectors and the social sphere. It is a direct path to the creation of modern and well-paid jobs.

The efforts taken by each level of government, business, development institutions and the Russian Academy of Sciences must have in view the main, central task: to improve the quality of life for our people. I would like to point out that our position on environmental protection is a matter of principle in this respect, and it will definitely remain unchanged.

The dangers of the alternative position have been recently exemplified by the events in Norilsk, Usolye-Sibirskoye and several other places. We will certainly help the people who live there, but we must also preclude a repetition of such environmental disasters.

I would like to ask those responsible to accelerate the adoption of a law on the financial responsibility of enterprise owners for clearing up the accumulated pollution and for the reclamation of industrial sites. This is a very simple approach. Here it is: if you have benefited from polluting the environment, clean up after yourself. We must act harshly. Rosprirodnadoz [the Federal Service for Supervision of Natural Resources] and other regulatory authorities must do their jobs.

I would like to add that the “polluter pays” principle must also be employed in full in the waste disposal sector to ensure transition to the so-called closed-loop economy. With this aim in view, we must launch a mechanism of extended producers and importers’ responsibility for the management of products and packaging wastes as soon as this year.

I also propose marking environmental payments to the federal budget. I know that experts and financial specialists do not like such special marks, but I see this as a vital sphere of our activity. We can make an exception in this case, and invest these funds in clearing up accumulated pollution and improving the environment.

Also, as I said, the amount of hazardous emissions in Russia’s 12 largest industrial centres must be reduced by 20 percent by 2024. We have already discussed this. Obviously, this goal must be accomplished through a comprehensive modernisation of the industrial sector, the housing and utilities sector, transport and energy.

Moreover, I propose expanding the emission quota system to all Russian cities with major air quality problems and introduce strict liability for non-compliance with environmental regulations. Of course, this requires transparent monitoring.

We will definitely support the efforts of businesses to upgrade their facilities up to current environmental standards. For example, upgrading will begin this year at aluminium plants in Bratsk, Irkutsk, Krasnoyarsk and Novokuznetsk based on the state guarantee mechanism. I will later name other cities and towns in other contexts but it does not mean that our work is limited to those areas. They only serve as examples.

Colleagues,

Last year, we allocated unprecedented resources for supporting the economy. Among other things, we managed to preserve over 5 million jobs through subsidised loans for wage payments. I want to stress that this programme succeeded but it succeeded precisely because businesses acted responsibly and did everything they could to keep their employees. We could see that.

Unfortunately, it was not possible to prevent layoffs completely. I understand how hard it is for those who lost their jobs. The Government was instructed to ensure that the labour market recovers by the end of the year. Still, this problem must be solved sooner so that people can have a stable income again. The Government will be encouraging entrepreneurial initiatives and stimulate private investments that create new jobs.

As you know, last year, social insurance contributions for small and medium-sized businesses were reduced by half, from 30 to 15 percent. This decision will remain in force permanently and is not subject to review.

I instruct the Government to present, within the next month, additional proposals on supporting small and medium-sized businesses, such as tax incentives, accessible loans and expanding product distribution and sales, including to major state-run companies.

As for other decisions in the economic sphere, I would like to mention the following.

First, we have already scrapped many archaic norms and requirements in construction and other fields and discontinued many unnecessary control inspections, but we also need to increase the momentum to achieve substantive, clear and tangible results in improving the business climate. For example, building a turnkey factory in Russia should be faster, more economically efficient and easier than in other regions of the world, including countries with developed economies.

Furthermore, we need to simplify the working conditions for non-commodity exporters. We have certainly been pursuing this policy line for a few years now, but we still need to remove all excessive restrictions in forex control for these exporters. This is one of the problems. The new procedure should start functioning in July. We have discussed this matter more than once. All amendments to the legislation must be adopted as quickly as possible during the spring session.

Secondly, the talent of an entrepreneur is primarily the talent of a creator, an aspiration to change life for the better, to create new jobs. The state will definitely support this attitude.

In the modern world where the market situation sometimes changes almost every day, businesses have to deal with high risks, especially when investing in long-term projects. To address this, we will be adjusting the entire private investment support system. We will evaluate how effective the projects are by the new products, services, and technologies they provide people with and how they improve the potential of Russia and each individual region.

The Special Investment Contract mechanism has already been improved; we have implemented a new instrument – Investment Protection and Promotion Agreements. We have consolidated development institutions on the basis of VEB. Their job is to reduce the risks for investing private capital, to help in the creation of new markets and investment mechanisms, the same as with the Project Finance Factory mechanism already in place. It is currently supporting more than 40 commercial projects with a total investment of 3 trillion rubles.

I am waiting for proposals from the Government on the implementation of the ideas proposed in March at a meeting with Russian businesses. Colleagues, you are well aware of this.

Third, we are making all major decisions concerning the economy through a dialogue with the business community. This is the practice established over many years. Of course, we have the right to expect that the auxiliary financial instruments and support mechanisms will bring the most desired result, which is converting profit into investment and development.

There is an important thing I want to say although it is nothing new to businesses. They know it already. The corporate sector is expected to make a record profit this year, despite all the problems that we are dealing with. Despite these problems, this is the real picture. We will take note of how this profit will be used and, based on the annual results, we may decide to calibrate the tax legislation. I want to see specific proposals from the Government. Off the record, I should note: some withdraw dividends while others invest in the development of their companies and entire industries. We will be encouraging those who invest.

Last year, we substantially increased budget expenditure while managing to maintain the stability of state finances. The Government and the Central Bank must continue to pursue a responsible financial policy. Ensuring macroeconomic stability and containing inflation within set parameters is an extremely important task. I assume that it will definitely be accomplished.

At the same time, thanks to our budget capacity and our reserves, we can allocate more funds to support investment in infrastructure and provide regions with new development instruments. Launching these instruments will require the law to be amended. I expect that all parliamentary parties – A Just Russia, the Liberal Democratic Party, the Communist Party and United Russia – will uphold these amendments.

In this regard, I want to thank all constructive public forces in the country for their responsible and patriotic attitude during this difficult epidemic. These are not just meaningless words because it was this attitude and its practical significance that helped all of us preserve the balance and stability of Russia’s government and political system. This is always important but it is especially relevant because we are preparing for the elections to the State Duma and other government bodies, considering the extensive work we will have to carry out. I hope that this competitive mindset that unites us in the face of common goals will persist.

Colleagues,

The country is developing and moving forward, but this is only taking place when the regions of the Russian Federation are developing. A striving of the heads of constituent entities to make their regions successful and self-sufficient must be and will be encouraged in every way.

We will support those who assume responsibility and launch constructive projects. I am confident that every Russian region has huge potential. To help make positive and productive use of this potential, what must we reduce first of all? The governors know what I am referring to: we must reduce the debt burden. These topics must be thoroughly discussed once again.

I ask the Government to submit by June 1 the proposals on ensuring long-term stability of regional and municipal finance and on increasing the regions’ self-sufficiency. We will discuss them in summer at a State Council meeting, and we will do so with due regard for the priority decisions about which I will tell you now.

First of all, we must help regions with large commercial debts. Here is what I suggest: the amount of a region’s commercial debt that exceeds 25 percent of the given region’s own revenues will be replaced with budgetary loans that will mature in 2029.

In addition, I propose restructuring the budgetary loans, yes, budgetary loans that were issued to the regions last year for taking measures to combat the pandemic. I believe that this would be fair. I would like to remind everyone that these loans will mature in two months, on July 1. I suggest extending them to 2029 as well.

I would like to emphasise that the restructuring of accumulated debts should be used as a mechanism of increasing the self-sufficiency of regional economies, especially considering that we will be offering a fundamentally new development tool to our constituent entities. I am referring to the so-called budgetary infrastructure loans with an interest rate of not more than 3 percent per annum and with maturity in 15 years. We intend to allocate a total of at least 0.5 trillion rubles, that is, 500 billion rubles of such infrastructure loans by the end of 2023.

Regional debt restructuring must be based on the concept of justice, which has always been the case, actually. Some constituent entities have large accumulated commercial debts, while other entities did not take out many loans. The latter may feel neglected in this case. This will not do, and we will not permit this. We will support those who have always pursued and continue to pursue a balanced financial policy. The principle of the distribution of infrastructure loans will be as follows: the fewer debts a region had, the more it will be able to receive in infrastructure loans.

We are one country. All levels of government and business must work to one end. Debt restructuring and an innovative investment resource in the form of infrastructure loans will allow us to expand the planning horizon and to launch new solutions that are tied in with the implementation of national projects, sector-specific strategies and a comprehensive plan for upgrading the backbone infrastructure.

Federal infrastructure loans are a powerful resource, but whether they will help us get ahead or attract private investment hugely depends on what regional management teams do and on their ability to conduct an open and candid dialogue with businesses, investors, and, of course, primarily, individuals.

The infrastructure projects in the regions must be implemented, primarily, in the interests of the people, and serve as investment in the creation of new jobs and in promoting the well-being of millions of Russian households and securing the future of our children. The priorities will be building motorways and bypasses in urban areas, upgrading the housing and utilities sector infrastructure and the public transport system, as well as conducting integrated development of territories and building tourist facilities.

Please note that the infrastructure and budget loans will be fully under the control of the Federal Treasury and will be provided exclusively for specific projects that have been thoroughly analysed by experts at the federal level. While we are at it, I would like to say something to regional leaders and the Government: listen, let's work in a rhythmic and business-like manner. I do not want to use harsh or rude language at this rostrum, but things must be done on time and projects must be prepared, not just pictures shown to the Government. In turn, the Government must quickly process the projects and help the regions deal with things they have problems dealing with. You must help your colleagues, you understand that? Not trash what they have brought to you and say they did a bad job. Some of them are unable to do what you ask of them. Help them, and then things will be on the path forwards.

The scale of the projects may vary, but most importantly, as I said, they must benefit our people and open up new opportunities. For example, in conjunction with our major companies and using the proposed mechanism, the Yamalo-Nenets Autonomous Area will begin the construction of the Northern Latitudinal Railway. This is the railway that will spur the development of the richest resources of the Arctic. This project has been in the works for a long time now, and it's time to launch it, since we can do so now. For example, as a result, Nizhny Novgorod will be able to continue building the metro and to start renovating the city centre. Chelyabinsk, another city with a million-plus residents, will also have the opportunity to upgrade its transport system through a long-standing metro construction project. I am aware of other similar projects in Krasnoyarsk and other regions.

And, of course, the construction of new facilities must be at a qualitatively higher level. I want the Government to draft a clear step-by-step plan for the end-to-end and widespread use of digital design, and the production and introduction of cutting-edge energy-efficient materials. This is also important if we want to tackle the climate and environmental challenges.

Large-scale infrastructure development sets fundamentally new tasks before the construction industry. In the difficult past year, it worked smoothly and built over 80 million square metres of housing. This is a good result. The more we build, the more affordable housing will there be for Russian families.

Therefore, we have an ambitious goal. We have already discussed it as well and this ambitious goal has not disappeared– we plan to build 120 million square metres of housing every year. That said, we must certainly envisage a special mechanism for supporting private housing construction.

As for large-scale construction, the DOM.RF development institute will attract financial resources through the placement of bonds. This is a tried and tested mechanism that generally works well. These resources must go to developers as targeted loans.

I would like to emphasise that federal budget subsidies will allow DOM.RF to issue loans to developers at a minimal annual rate of about 3–4 percent. The construction of residential neighbourhoods in Tula, Tyumen, the Sakhalin Region and Kuzbass will be pilot projects for developing this model.

Improvement of cities and towns and housing construction growth play a major role in the development of the regions. We must take care of the urgent, daily problems of local residents. Quite a few Russian families live in areas connected to gas networks but their homes still have no access to gas for some reason. It seems the pipe is there but there is no gas at home.

I would like to ask the Government to work out, in cooperation with the regions, a clear-cut plan for bringing gas to such households. In this context, I support United Russia’s initiative, notably, that people do not have to pay for laying gas pipes directly to the border of their land plots in a residential area.

As I have already said, the Government must analyse all details in cooperation with Gazprom and other companies and agencies that work in this area to prevent any setbacks. Otherwise, I will say something from this rostrum and people will be waiting for it but because you don’t put some squiggles or commas in the right place everything will get bogged down again. This is unacceptable, and I will check on it myself, so please pay attention. Mosoblgaz and other companies must understand what they must do, in what timeframe and how much money they have at their disposal.

The goal is certainly more extensive. We must offer every region our solutions on public access to reliable and clean energy sources. This may be electricity, including from renewable sources, or environmentally friendly use of coal, which is also an option in the modern world, pipeline or liquefied gas. I instruct the regional heads to prepare, in coordination with the Government, detailed plans of action and start implementing them next year.

For example, in Kamchatka we must envisage the creation of local gas-receiving infrastructure to ensure reliable long-term gas supplies to the residents and companies of the Kamchatka Territory.

Colleagues,

We will not only give fundamentally new development tools to the regions, but will also directly invest federal resources into the settlement of the worst systemic problems, which will have a compound effect on boosting the regions’ growth and improving the quality of people’s lives.

We will begin with allocations from the National Welfare Fund for building mainline motorways. First of all, we should finance the ongoing construction of the Moscow-Kazan high-speed road and, more than that, extend it all the way to Yekaterinburg, completing this project within three years.

This way, together with the existing Moscow-St Petersburg high-speed road and the Central Ring Road, this will ensure safe high-speed motorway transit across the entire European part of Russia, from the Baltic Sea to the Urals, by 2024.

However, it is not enough to simply connect the end-of-line destinations. What good will this do, if it does not change anything about life in villages or small towns but only gives the people there an opportunity to watch high-speed trains and vehicles rush past? The backbone infrastructure must definitely lead to the development of all the territories where it has been built, giving rise to the development of a modern regional network.

The constituent entities will now be able to use infrastructure loans to speed up the implementation of these construction projects. But in their development plans, our colleagues should remember and take into account that the federal and regional mainlines must function as a unified system in the interests of our citizens, businesses and regions. In this way, the infrastructure loans and the resources of the National Welfare Fund will be working for the benefit of all Russian regions.

The same goes for our new national project in the tourist sphere. A programme of easy loans will be launched soon to finance the construction and renovation of hotels and other tourist infrastructure. The interest rate on these loans will be 3–5 percent as well, and the loans will mature in 15 years.

There are many other pilot projects. I will only mention some of them: the development of Sheregesh, the leading mountain ski resort in Kuzbass; the creation of a yachting resort in the Bay of Balaklava in Sevastopol; and the development of the tourist industry on the Altai and in the Kaliningrad Region.

The infrastructure loans project will give a new impetus to entire tourist clusters. In particular, several regions in Central Russia will be able to modernise and expand the Golden Ring route at a fundamentally new level, realising the tourist potential of small towns such as Tarusa, Palekh, Murom, Gorokhovets, Tutayev and Borovsk. Development projects will be launched in the Volga Region cities, the Crimean resorts, the Black Sea and Pacific coast areas, as well as in our resort towns such as Staraya Russa in the Novgorod Region and Kavkazskiye Mineralnye Vody in the Caucasus, including its gem, Kislovodsk.

Russia is a hospitable country that is open to its good friends. You surely remember what happened during the 2018 football championships. As soon as the epidemiological situation allows, we will lift the remaining restrictions and millions of tourists from all over the world will come to Russia again. We have a practical task at hand: to ensure that e-visas for travel to Russia are available remotely and without undue formalities within a matter of four days in the majority of countries.

Colleagues,

The meaning and purpose of Russia's policy in the international arena – I will just say a few words about this to conclude my address – is to ensure peace and security for the well-being of our citizens, for the stable development of our country. Russia certainly has its own interests we defend and will continue to defend within the framework of international law, as all other states do. And if someone refuses to understand this obvious thing or does not want to conduct a dialogue and chooses a selfish and arrogant tone with us, Russia will always find a way to defend its stance.

At the same time, unfortunately, everyone in the world seems to be used to the practice of politically motivated, illegal economic sanctions and to certain actors’ brutal attempts to impose their will on others by force. But today, this practice is degenerating into something even more dangerous – I am referring to the recently exposed direct interference in Belarus in an attempt to orchestrate a coup d’état and assassinate the President of that country. At the same time, it is typical that even such flagrant actions have not been condemned by the so-called collective West. Nobody seemed to notice. Everyone pretends nothing is happening.

But listen, you can think whatever you like of, say, Ukrainian President [Viktor] Yanukovych or [Nicolas] Maduro in Venezuela. I repeat, you can like or dislike them, including Yanukovych who almost got killed, too, and removed from power via an armed coup. You can have your own opinion of President of Belarus Alexander Lukashenko’s policy. But the practice of staging coups d’état and planning political assassinations, including those of high-ranking officials – well, this goes too far. This is beyond any limits.

Suffice it to mention the admission made by the detained participants in the conspiracy about a planned siege of Minsk, including plans to block the city infrastructure and communications, and a complete shutdown of the entire power system in the capital of Belarus! This actually means they were preparing a massive cyberattack. What else could it be? You know, you cannot just do it all with one switch.

Clearly, there is a reason why our Western colleagues have been stubbornly rejecting Russia’s numerous proposals to establish an international dialogue on information and cyber security. We have come up with these proposals many times. They avoid even discussing this matter.

What if there had been a real attempt at a coup d’état in Belarus? After all, this was the ultimate goal. How many people would have been hurt? What would have become of Belarus? Nobody is thinking about this.

Just as no one was thinking about the future of Ukraine during the coup in that country.

All the while, unfriendly moves towards Russia have also continued unabated. Some countries have taken up an unseemly routine where they pick on Russia for any reason, most often, for no reason at all. It is some kind of new sport of who shouts the loudest.

In this regard, we behave in an extremely restrained manner, I would even say, modestly, and I am saying this without irony. Often, we prefer not to respond at all, not just to unfriendly moves, but even to outright rudeness. We want to maintain good relations with everyone who participates in the international dialogue. But we see what is happening in real life. As I said, every now and then they are picking on Russia, for no reason. And of course, all sorts of petty Tabaquis are running around them like Tabaqui ran around Shere Khan – everything is like in Kipling's book – howling along in order to make their sovereign happy. Kipling was a great writer.

We really want to maintain good relations with all those engaged in international communication, including, by the way, those with whom we have not been getting along lately, to put it mildly. We really do not want to burn bridges. But if someone mistakes our good intentions for indifference or weakness and intends to burn or even blow up these bridges, they must know that Russia's response will be asymmetrical, swift and tough.

Those behind provocations that threaten the core interests of our security will regret what they have done in a way they have not regretted anything for a long time.

At the same time, I just have to make it clear, we have enough patience, responsibility, professionalism, self-confidence and certainty in our cause, as well as common sense, when making a decision of any kind. But I hope that no one will think about crossing the “red line” with regard to Russia. We ourselves will determine in each specific case where it will be drawn.

I will now say, just as I always do during the annual addresses to the Federal Assembly, that the improvement and qualitative strengthening of Russia’s Armed Forces continues on a regular basis. In particular, special attention will be given to the development of military education both at military school and academies and at military training centres at civilian universities.

By 2024, the share of modern weapons and military equipment in the armed forces will reach nearly 76 percent, which is a very good indicator. This share in the nuclear triad will be over 88 percent before this year is out.

Standing on combat duty are the latest Avangard hypersonic intercontinental missile systems and the Peresvet combat laser systems, and the first regiment armed with Sarmat super-heavy intercontinental ballistic missiles is scheduled to go on combat duty in late 2022.

The number of combat air systems with Kinzhal hypersonic missiles, and warships armed with precision hypersonic weapons such as Kinzhal that I mentioned, and with the Kalibr missiles, is increasing. The Tsirkon hypersonic missiles will be put on combat duty soon. Work is underway on other modern combat systems, including Poseidon and Burevestnik, in accordance with the development plans of the Armed Forces.

As the leader in the creation of new-generation combat systems and in the development of modern nuclear forces, Russia is urging its partners once again to discuss the issues related to strategic armaments and to ensuring global stability. The subject matter and the goal of these talks could be the creation of an environment for a conflict-free coexistence based on the security equation, which would include not only the traditional strategic armaments, such as intercontinental ballistic missiles, heavy bombers and submarines, but – I would like to emphasise this – all offensive and defensive systems capable of attaining strategic goals regardless of the armament.

The five nuclear countries bear special responsibility. I hope that the initiative on a personal meeting of the heads of state of the permanent members of the UN Security Council, which we proposed last year, will materialise and will be held as soon as the epidemiological situation allows.

Russia is always open to broad international cooperation. We have consistently advocated the preservation and strengthening of the key role of the United Nations in international affairs, and we try to provide assistance to the settlement of regional conflicts and have already done a great deal to stabilise the situation in Syria and to launch a political dialogue in Libya. As you know, Russia played the main role in stopping the armed conflict in Nagorno-Karabakh.

It is on the basis of mutual respect that we are building relations with the absolute majority of the world’s countries: in Asia, Latin America, Africa and many European countries. We are consistently expanding as a priority contacts with our closest partners in the Shanghai Cooperation Organisation, BRICS, the Commonwealth of Independent States, and our allies in the Collective Security Treaty Organisation.

Our common projects in the Eurasian Economic Union are aimed at ensuring economic growth and the wellbeing of our people. There are new, interesting projects here, such as the development of transport-and-logistics corridors. I am sure they will become a reliable infrastructure backbone for large-scale Eurasian partnership. The Russian ideas of this broad, open association are already being put into practice, in part, via alignment with other integration processes.

All these projects are not just geopolitical ideas but strictly practical instruments for resolving national development tasks.

Colleagues,

I began today’s Address with urgent healthcare issues, and concluding it, I would like to say the following. Nobody in the world knew what misfortune we would have to face. However, we, citizens of Russia, have already done much and will do all we can to counter the threat of the epidemic. Our country has reliable resources for this. We created them in healthcare, science, education and industry in previous years.

However, we must definitely move forward. We have mapped out national development tasks. Naturally, the challenge of the epidemic has made objective adjustments to our work. Today’s Address contains instructions on demography and family support, as well as on efforts to fight poverty, increase incomes, create jobs, improve the business environment and raise state management to a new level.

I would like to ask the Government to focus on these tasks in preparing new initiatives on Russia’s socioeconomic development and instruct it to present them by July 1 of this year.

What do I have in mind? Doing everyday work, we must certainly not forget about our strategic development goals and our national development goals, and we must improve the mechanisms for reaching them.

We will discuss the Government’s proposals with the participation of the relevant State Council commissions, our business associations, experts and the Civic Chamber. Following such a broad discussion, we will make final decisions on further financial and organisational actions at the meeting of the Council for Strategic Development and National Projects.

Now I would like to address all citizens of Russia once again to say that we will do everything in our power to achieve the goals set. I am sure we will move forward together and accomplish all the tasks that we have set for ourselves.

Thank you very much for your attention.

The National Anthem of the Russian Federation is played.

Presidential Address to the Federal Assembly

2020-02-18T17:47:47+04:00

The President of Russia delivered the Address to the Federal Assembly. The ceremony took place at the Manezh Central Exhibition Hall.

About 1,300 people have been invited to attend the ceremony, including members of the Federation Council, State Duma deputies, members of the Government, the heads of the Constitutional and Supreme courts, regional governors, speakers of regional legislatures, the heads of traditional religious denominations, public activists, the heads of regional civic chambers and the heads of major media outlets.

* * *

President of Russia Vladimir Putin: Members of the Federation Council, State Duma deputies, fellow Russians,

The Presidential Address to the Federal Assembly is delivered at the very beginning of the year for the first time. We need to address large-scale social, economic and technological tasks facing the country more quickly and without delay.

Their content and guidelines are reflected in the national projects, whose implementation will require a new quality of state governance and work on the part of the Government and state bodies at all levels, as well as direct dialogue with citizens.

Our society is clearly calling for change. People want development, and they strive to move forward in their careers and knowledge, in achieving prosperity, and they are ready to assume responsibility for specific work. Quite often, they have better knowledge of what, how and when should be changed where they live and work, that is, in cities, districts, villages and all across the nation.

The pace of change must be expedited every year and produce tangible results in attaining worthy living standards that would be clearly perceived by the people. And, I repeat, they must be actively involved in this process.

Colleagues,

Russia’s future and historical perspective depend on how many of us there are (I would like to start the main part of my Address with demography), how many children are born in Russian families in one, five or ten years, on these children’s upbringing, on what kind of people they become and what they will do for the country, as well as on the values they choose as their mainstay in life.

There are nearly 147 million of us now. But we have entered a difficult, a very difficult demographic period. The measures we took starting in the mid-2000s have had a positive effect on demography. We have even reached a stage of natural increase. This is why we have more children at schools now.

However, new families are being created now by the small generation of the 1990s. And the birth rate is falling again. This is the main problem of the current demographic period in Russia.

The aggregate birth rate, which is the key index showing the number of births per woman, was only 1.5 in 2019, according to tentative estimates. Is this few or many? It is not enough for our country. It is approximately equal to the figure reported in many European countries. But it is not enough for Russia.

I can tell you by way of comparison that the figure was 1.3 in 1943, during the Great Patriotic War. It was only lower in the 1990s: 1.16 in 1999, lower even than during the Great Patriotic War. There were very few families with two children, and some couples had to put off starting a family.

I want to say once again that we are alarmed by the negative demographic forecasts. It is our historic duty to respond to this challenge. We must not only get out of this demographic trap but ensure a sustainable natural population growth by 2025. The aggregate birth rate must be 1.7 in 2024.

Demography is a sector where universal or parochial solutions cannot be effective. Each step we take and each new law or government programme we adopt must be scrutinised from the viewpoint of our top national priority – the preservation and increase of Russia’s population.

As we build a long-term policy to support families, it must be based on specific life situations. We need to look closely at difficulties faced by new families, families with many children or single-parent families.

The most sensitive and crucial issue is the opportunity to enrol one’s child in a day nursery. Earlier, we allocated funds from the federal budget to help the regions create 255,000 new places in day nurseries by the end of 2021. However, in 2018 to 2019, instead of 90,000, 78,000 new places were created, out of which only 37,500 places can actually be provided to kids. Other places are unavailable simply because an educational licence is still not obtained. This means that these nurseries are not ready to enrol children.

Governors, heads of other constituent entities, my dear colleagues, this is not how work is done. Come on! It means we have created 77,700 places that are still not fully available. Half of them cannot operate – and we must create 177,300 by 2021. I am asking you to do everything (although it will be very difficult now, however, it needs to be done) to close this gap. Once again, we must work across all areas of family support.

But there is a daunting challenge that directly threatens our demographic future and it is the low income of a significant part of our citizens and families.

According to various estimates, roughly 70 to 80 percent of low-income families are families with children. You are well aware of this. It often happens that even when not one but both parents work, the income of such a family is still very modest.

What decisions have already been made? From January 2020, families with incomes below two subsistence minimums per person will receive monthly benefits for their first and second child. Moreover, these benefits will be paid until the child reaches the age of three rather than 18 months as was the case before. The benefit amount will depend on the subsistence minimum in a specific region. The nationwide average is over 11,000 rubles per child per month. Once again, this is an average and depends on a specific region.

Additionally, with the support of the federal budget we have started paying benefits for the third child and subsequent children in 75 constituent entities, now including all regions in the Urals, Siberia and the Far East.

All of this amounts to substantial support. But the following thought has crossed my mind, and I believe that you also realise this. Parents stop receiving payments when their child turns three, and this means that their family can immediately face financial problems. To be honest, this is happening already. We must prevent this, especially since I realise that mothers often find it hard to combine working and caring for their children before they start school.

We know from the experience of our own children and grandchildren that they often fall ill. Their mothers are therefore unable to work. In this connection, I suggest we introduce monthly payments for children aged between three and seven starting already from January 1, 2020.

Who will be covered by this measure, and how is it supposed to function?

Families whose incomes do not exceed per-capita subsistence minimum will receive these payments. That is, it concerns families facing a very difficult situation.

To obtain these payments, they will only have to file an application and list their official legal incomes. I would like to note that this procedure must become as convenient and simple as possible, so that people would be able to apply without queuing and clearing hurdles. Or they should do this online on the relevant state website.

As I have already said, incomes may vary from region to region. First stage payments will amount to 5,500 rubles, or 50 percent of the subsistence minimum. But that is not all. We will have to analyse and assess the operation of this system. And we will take the next step, if we see that some families are unable to achieve the subsistence minimum while receiving 5,500 rubles. From 2021, we will pay the subsistence minimum in full, or over 11,000 rubles, that will vary from region to region. I repeat, the specific sums will vary, but on average it will amount to 11,000 rubles per child per month.

We will need substantial resources for implementing the proposed measure, and we will also have to adjust the federal budget. I ask the Government and members of the Parliament to do this as quickly as possible. The regions should also complete their share of regulatory work.

What else should we do equally quickly?

In my Address last year I said that we should expand the system of social contracts. It should become an individual programme whereby every low-income family will be able to increase their income and enhance their quality of life. Under these contracts, the state will make regular payments to such families, finance retraining and advanced training and help them to find employment or start a small business.

While providing comprehensive assistance to low-income people, society and the state have a right to expect them to take steps as well to deal with their problems, including finding employment and taking a responsible attitude to their children and other family members.

The regions are already introducing the mechanism of social contracts. But it is not sufficiently effective yet, and it is not helping much to fight poverty or to increase family incomes.

Therefore, first of all I would like to ask the Government to analyse the experience of the pilot projects and revise the principles of social contracts. Second, we must increase financial assistance to the regions so that all of them introduce this mechanism in 2021.

I would like all our colleagues, including the regional heads, to note that we will assess their performance not by the number of social contracts signed but by poverty decline figures.

Colleagues,

Back in 2006, I said the following in my Address to the Federal Assembly: “And now for the most important matter. Indeed, what I want to talk about is love.” It was then that I proposed launching the maternity capital programme aimed at helping the families that decided to have their second child.

This programme will expire on December 31, 2021. I know than many people wonder what the state will do after that. We will extend this programme to December 31, 2026 at the least. We must do this without fail. But this measure only is no longer enough.

We must support young people who are starting their families and, I am sure, dreaming about having children. In this sense, I would like to introduce new, additional decisions concerning the maternity capital, which should also come into effect on January 1, 2020.

Even when the first child is born, the family will have the right to the full amount of the maternity capital, which is 466,617 rubles after the indexation in January 2020. This is the sum that was paid when the second or the next child was born. This support will give families a chance to prepare for the birth of their second child.

But I believe that this is still not enough in today’s conditions, considering the demographic challenges Russia is facing. We can and must do even more. I suggest increasing the maternity capital by a further 150,000 rubles. Families will have the right to this additional money for the maternity capital when their second child is born.

This means that the total amount of the maternity capital for a family with two children will amount to 616,617 rubles. It will be indexed annually in the future.

At the same time I believe that if a family already has a child, we must provide the new, increased maternity capital when the second child is born, which is, as I have already said, 616,617 rubles.

Let me add that we have already made the decision that when the third child is born, the government pays 450,000 rubles towards the family’s mortgage loan. This means that overall a family with three children will be able to invest over one million rubles to solve their housing problems with the help of the government. In many regions, cities, and even regional capitals this amounts to almost half of the cost of a house or a flat.

Let me also remind you that a reduced mortgage interest rate, six percent per year, for families with two or more children has been extended for the entire time of the loan, which resulted in the number of people using this support measure growing almost 10-fold at once.

A social programme for young families has been launched in the Far East: mortgage loans at 2 percent interest rate. I ask the banks, and not just the banks with state capital, to become more actively involved in its implementation.

And here is another highly important matter. I have already mentioned a new payment for children aged between three and seven. But this is not all that we can and must do. Yes, when children start attending school, their parents, especially mothers, get more opportunities to work and earn an additional income. However, families have to pay more in order to send their children to school, they face extra problems, and we have to support them at that stage. In this connection, I suggest providing free hot meals to all primary school students from grade one through four.

I will not conceal the fact that we have had heated discussions on this subject. On the whole, some colleagues do not object, but they say that it would not be very fair that people with decent incomes and low incomes should receive the same amount of support from the state. They are not saying this because they do not want to support the children. Indeed, this argument has its own logic. But there is another logic that prevails in our society: everyone must have equal opportunities, and children and their parents who are often demeaned by the current situation must not think that they are even unable to feed their children.

I believe that this is very important for our society. Yes, they tell me that these benefits were not available even during the Soviet period, when there was large-scale social support for the people. But there was no great social stratification at that time either. I believe that this measure will be justified.

In order to provide free hot and, most importantly, healthy meals, I suggest channelling funding from three sources: the federal, regional and local budgets. But money is not the only thing that matters. We need to create the required infrastructure at schools, set up cafeterias and lunchrooms and put in place a system for supplying high-quality food. I would like to note that this was not done even during Soviet times, as I have already said. This, of course, will require time. But free hot meals must be provided starting from September 1, 2020 in those regions and schools that have the required level of technical equipment. I ask our colleagues to expedite this work. Primary school students must start receiving high-quality hot meals free of charge in all regions from September 1, 2023.

So colleagues, here is the point I want to make, in short. I would like to emphasise – all the steps we are taking are aimed at creating a streamlined, large-scale and, most importantly, an effectively working family support programme, so that people’s incomes, especially for those raising children, are high enough for a decent life.

Secondly, what I said at the beginning of the Address: the steps that we took in previous years in the field of demographic development have already brought results. They have yielded results back then: a large generation is growing up in Russia. I am referring to children who are in preschool and primary school now. It is very important that they adopt the true values of a large family – that family is love, happiness, the joy of motherhood and fatherhood, that family is a strong bond of several generations, united by respect for the elderly and care for children, giving everyone a sense of confidence, security, and reliability. If the younger generations accept this situation as natural, as a moral and an integral part and reliable background support for their adult life, then we will be able to meet the historical challenge of guaranteeing Russia’s development as a large and successful country.

Colleagues,

Supporting families and family values is always a forward-looking strategy addressing the generations that are to live in an age of tremendous technological and social changes, and something that will determine Russia’s fate in the 21^st century. So, to have these new generations participate in creating this future even now, to have them fully reveal their potential, we must create the necessary conditions for them, primarily for every child in every region of Russia to get a good education.

In the middle of the coming decade, Russia will have about 19 million schoolchildren, which is 6 million more than in 2010. Some say it is too difficult to influence objective demographic processes, so it is unadvisable to channel large resources for demographic development. However, in reality, we can see direct evidence of the opposite: family support policies are working, and sometimes their results even exceed our wildest expectations. It is great that there are so many children in our schools again. On the other hand, this situation should not affect the comfort and quality of their learning.

I ask the Government to coordinate with the regions, consider the demographic and other factors, estimate how many more children the schools need to serve, and make the necessary changes to the Education National Project. That will require flexible solutions: not only to build more schools, but also to efficiently use the entire educational and other infrastructure we have for these purposes, as well as the benefits of modern technology for education.

Almost all schools in Russia have internet access now. In 2021, they should no longer just be connected, but have high-speed internet access to fully embrace the digital transformation in national education; teachers and students should have access to advanced educational programmes; individual approach to teaching should be practiced to reveal each child’s talents.

Our network of extracurricular technology and engineering centres is developing dynamically. Our children should also benefit from a modern environment for practicing music, art, and other forms of creativity.

Russia is allocating more than 8 billion rubles for equipment and musical instruments for children's art schools as part of the Culture National Project. But the problem is much wider. More than 1,000 art school premises are dilapidated and not fit for use as intended. I would like to ask the Government to help the regions improve them. And I ask the regional authorities not to forget that this is their responsibility.

Furthermore, a modern school implies forward-looking teaching staff enjoying high social status and prestige. By the middle of the next decade, the national professional advancement system should canvas at least half of the country's teachers, in the future including additional professional training, along with general education workers.

Class teachers are closest to their pupils. Their ongoing daily work including mentoring children and teaching them the right ways is a huge responsibility, and definitely requires special training and special support for these mentors. In this regard, I consider it necessary to introduce, from September 1, at least 5,000 rubles in additional payment to them financed from the federal budget.

There is a lot of controversy about this decision, because this is actually the responsibility of the regions. Those present in this room are well aware of this. But what is a class teacher? A mentor and supervisor, and those are federal functions.

But, of course, I would like to point this out: all current regional payments to class teachers should continue, colleagues; I am calling your attention to this. And I will definitely look at what will be happening in practice, in real life.

I pointed out more than once that the pay parameters for teachers, doctors and other public sector employees set out in the May 2012 Executive Orders must be strictly complied with. There is a reason why I keep returning to this subject. If we slacken control of this matter, this will create the temptation to neglect these provisions, as many of those present here know. This must not be allowed. I would like to emphasise that the issue concerns professionals working in the spheres of vital significance for society and the country, and they must receive good and fair pay for their work.

The number of school graduates will be increasing in the next few years. In light of this, we must ensure equal and fair access to free intramural university education. Therefore, I suggest that the number of university scholarships be increased every year. Moreover – what I am going to say next is very important, the priority in this matter must be given to regional universities, especially the regions that are lacking doctors, teachers and engineers.

Of course, we must not simply enrol more students but boost the development of regional universities with support from businesses and employers. In particular, we must strengthen their training, research and social infrastructure, as well as improve the system of training and advanced training of teachers for regional universities so that students receive up-to-date knowledge and can have successful careers in their regions.

The employment market is changing rapidly, with new professions appearing and higher requirements made to the existing ones. Our universities must be able to respond to these changes flexibly and quickly. I believe that third-year students must be offered an opportunity to choose a new path or curriculum, including related professions. This is not easy to do, but we must indeed do this. To ensure that talented and decent people play a major or leading role in our national development, we have launched the Russia – Land of Opportunity project. Over 3.5 million people have taken part in its competitions and Olympiads. We will continue to improve this system.

Colleagues,

Last year life expectancy in Russia exceeded 73 years for the first time, which is eight years longer than in 2000. This is the result of social and economic changes in Russia, the development of mass sports and promotion of healthy lifestyles. And, of course, the entire healthcare system made a significant contribution, especially the programmes of specialised, including high-tech aid, as well as maternity and childhood welfare and protection of health of mother and child.

The rate of infant mortality has reached a historic low. This indicator is even better than in some European countries. I am well aware that the public in many developed countries is very critical of the state of their national healthcare system, and you also know this. In fact, almost everywhere – no, everywhere – people criticise their healthcare system, however well organised it looks from here.

Still our achievements in this area show that if we set certain goals, we can achieve results. However, let me repeat this, people do not judge the healthcare system by figures and indicators. A person who has to travel dozens of kilometres to a polyclinic or spend a whole day waiting in line for an appointment with a specialist is not very interested in how life expectancy has grown on the average. People think about their lives, their health, about how to get high-quality and timely medical aid without obstacles and when they need it. This is why now we must focus our efforts on primary care, which all people and all families have to deal with. This is where we have the worst and most sensitive problems.

This year we are to fully complete the creation of a network of rural paramedic centres, as stipulated in the related national project. This does not mean, however, that all the problems of these rural paramedic centres have been settled. I would like to point out that the mission of these centres is not to make out prescriptions or refer patients to regional medical centres. Local specialists must be able to really help people by using modern equipment and high-speed internet. I would like to ask the Russian Popular Front to monitor the provision of equipment, construction and repair of rural paramedic centres.

On July 1 we will also launch a programme to modernise the system of primary healthcare. We will have to repair and provide new equipment to outpatient clinics, rural hospitals and first-aid stations in all our regions. We have allocated an additional 550 billion rubles for this purpose, more than 90 percent of which will come from the federal budget.

At the same time, I ask the regional authorities to find additional funds for providing housing to doctors and paramedics, in particular in villages, settlements and small towns, and to use all the available instruments towards this end, including employer-rented housing and private housing projects.

Training and recruitment are key elements of medical education. By 2024, all levels of healthcare, but first of all the primary healthcare level, must have the necessary number of specialists. In this connection, I suggest that the admission procedure to medical universities be changed significantly. For example, 70 percent of scholarships in the field of general medicine and 75 percent in paediatrics will be awarded to prospective students who will return to their native regions upon graduation. The quotas will be distributed based on requests filed by the regions, which must subsequently provide employment to the graduates who must be able to work where people need their services.

As for residency training, I suggest that almost 100 percent of scholarships be given to medical graduates in critically important spheres. Priority during enrolment will be given to those with practical experience in the field of primary healthcare, especially in rural areas. This system should be also stipulated for federal medical centres.

And lastly, just as we agreed, a new system of remuneration will be gradually introduced in healthcare starting this year. It is based on clear, fair and understandable rules, with a fixed share of salary in the overall income and a uniform list of compensation payments and commercial incentives for all regions.

I am aware that the implementation of all these goals requires extensive resources. If you go back to where I started, every goal needs a great deal of money. In this regard, I ask the Government to once again consider identifying priorities for our development while retaining the budget’s stability. This is an advantage we have achieved in the past few years, and we must maintain it.

I know that last year a number of regions saw a disruption in medication supplies as the regions’ purchases were not made, with certain officials treating it as if it were some sort of office supplies purchases claiming it was not a big deal and new tenders would be announced. But people were left without essential and vitally important medications. I should point out that such cases must never happen again.

This year, efforts will be made to launch an integrated comprehensive register of recipients of medications that are provided to citizens free of charge or with a considerable discount through a federal or regional subsidy to avoid any confusion in this regard in the future.

Also, certain legislative decisions have already been adopted that will allow for official and centralised imports of certain medications to Russia that are yet to receive regulatory approval. I ask the Government to promptly organise this work so that people, particularly the parents of sick children, do not find themselves in a desperate situation when they cannot legally find the necessary medications.

Control over pharmaceutical drugs will also significantly change. It will be tightened both at pharmaceutical companies and during all stages of medication circulation, including at pharmacy networks.

Colleagues,

In recent years, we have focused on strengthening macroeconomic sustainability, and it is something I just mentioned. The federal budget has had a surplus again. Our government reserves confidently cover our gross external debt. And here I am not talking about some abstract or theoretical indicators – I would like to emphasise that these figures are directly influencing the life of each and every person in our country, and have to do with the fulfilment of our social commitments. We can see the problems, even shocks that citizens of other states face, where government had no such cash cushion and their financial position turned out to be unstable.

The consistent work of the Government and the Bank of Russia has led to a stabilisation of prices. Last year, inflation stood at 3 percent, which is below the target level of 4 percent. True, the prices of certain goods and services have risen slightly, but overall, I repeat, inflation is at a predictably low level. The situation fundamentally differs from what it was five or ten years ago, when double-digit inflation was a tax on all citizens of the country, being an especially hard burden for those on a fixed salary or pension – retired people and workers in the public sector.

Now, relying on a stable macroeconomic foundation, we need to create conditions for a substantial increase in people’s real incomes. Again, this is the most important responsibility of the Government and the Central Bank. To meet it, the national economy needs structural changes and higher efficiency. In 2021, Russia's GDP growth rates should be higher than the global ones.

To have this kind of dynamics, it is necessary to launch a new investment cycle, to seriously increase investment in the creation and upgrading of jobs, in infrastructure, in the development of industry, agriculture and the services sector. Starting this year, annual investment growth should be at least 5 percent, and investment share in the country's GDP, 25 percent by 2024 from the current 21 percent.

What needs to be done to encourage investment?

First of all, we agreed not to change the tax treatment for businesses over a period of the next six years and thus provide a wider horizon for investment planning. The deputies and the Government should speed up the adoption of a package of draft laws on protecting and promoting investment. As you are well aware, tax treatment for major important projects should remain unchanged for up to 20 years, and the requirements and standards for building production sites should remain the same for three years. These investor guarantees should become standard law.

Of course, in addition to major projects, small- and medium-sized businesses’ initiatives should be supported as well. Today, the regions are entitled to provide an investment-based tax deduction and a three-year revenue tax break, but they rarely use them. It is clear why: they do so because regional budgets thus lose revenue. In this regard, we would like federal funds to compensate the regions for two-thirds of the lost revenue stemming from the use of an investment-related tax deduction.

Second, the reform of the oversight and supervisory activities must be completed in 2020, and businesses should thus see improvements in their operating environment.

Third, I have already submitted to the State Duma the amendments to remove vague criminal law provisions in part related to so-called frauds. Thus, entrepreneurs have repeatedly mentioned Article 210 of the Criminal Code, under which any company whose senior executives violated the law could qualify as an organised criminal group, meaning that almost all of its employees were liable. Tougher restrictive measures and punishment were put in place. Law enforcement agencies will henceforth be required to prove that an organisation or a company was initially deliberately created with an illegal purpose in mind.

Fourth. It is estimated that as soon as this summer the foreign currency reserves of the National Welfare Fund will pass the mark of 7 percent of GDP. We have accumulated these reserves to guarantee our stability and security, which means we can invest our additional revenue in development and the national economy.

Cost-effective projects that remove infrastructure restrictions for our territories must become our priority. This includes bypass roads for big cities, arterial roads between regional capitals and exit roads to federal motorways. These projects will inevitably bring about the growth of small businesses, tourism and social activity in the regions and locally.

Fifth. For investment to grow steadily, our economy needs long-term money. We all know this very well. This is a direct responsibility of the Central Bank. I appreciate its consistent course for making loans for the real sector of economy more accessible.

Of course, businesses, companies (especially large ones) must remember about their social and environmental responsibility. I would like to thank our parliament members for demonstrating integrity during their work on the emission quota law.

Obviously, it is necessary to act upon our plans faster. Our next steps include testing and implementing the air quality monitoring system and subsequently expanding this control system to cover the entire country. It is necessary to monitor not only the condition of air but also water and soil – that is, to develop a comprehensive environmental monitoring system.

Next. By the end of this year, at least 80 out of the 300 largest industrial facilities must complete the transition to best available technology and obtain complex environmental permits, which means a consistent reduction of hazardous emissions. Sixteen permits have been issued as of now but overall this work is on schedule. No matter what, we must not allow any disruptions here. It is necessary to drastically cut the amount of waste ending up in landfills, implement waste sorting and generally move towards the circular economy. By 2021, we must already launch the mechanism of extended producer responsibility when producers and importers of goods and packaging are responsible for recycling costs. To put it simply, contaminators must pay.

Colleagues,

I would like to stress that Russia is ready to support Russian and foreign scientists’ joint research on ecology, climate change, environmental and ocean pollution. These are global development challenges shared by everyone.

Today the speed of technological change in the world is increasing manifold, and we must create our own technologies and standards in areas that define our future, such as, first of all, artificial intelligence, genetics, new materials, energy sources and digital technology. I am confident that we can reach a breakthrough here, as we did in defence. I will speak about this later.

In order to solve difficult technological tasks, we will continue to develop research infrastructure, including megascience-class facilities. I am sure that an opportunity to work with unique equipment and tackle the most ambitious tasks will encourage talented young people to work in science. This is already happening. According to estimates, by the middle of the decade every second scientist in Russia will be under 40.

We should give researchers, engineers and entrepreneurs the freedom they need to do their work and to conduct innovative scientific research. I ask the Government and State Duma deputies to fast-track the discussion of the technological legislative package. This year we must launch a flexible mechanism of experimental legal modes to design and introduce new technologies in Russia and establish up-to-date regulation of the big data turnover.

Next, we should establish a mechanism of social support for direct and venture finance tools based on the best global practices. The technological entrepreneur should have the right to take a risk, so that failing to implement an idea will not automatically mean inappropriate use of funds and a possible criminal prosecution. I mean that we should establish such legal and financial conditions that as many start-ups and pioneer teams as possible could become strong and successful innovative companies.

We need to support the export of high-tech products and, of course, to boost domestic demand for innovative products. In this context, I believe it would be right to fast-track the digital transformation of the real economy. A requirement should be set that national projects are largely carried out using domestic software.

We have already put in place, say, major digital television infrastructure, which, in terms of its technical characteristics, is one of the most advanced in the world. Currently, the digital television coverage in Russia is more expanded than, for example, in France, Austria or Switzerland.

The internet has become a must-have for people today. Russia is one of few countries in the world which has its own social networks, messengers, e-mail and search engines and other national resources.

Given all the things I’ve just mentioned, I suggest that the Affordable Internet project be developed and carried out and that free access to socially important domestic internet services be available across Russia. I repeat that in this case people will not have to pay for the internet service, for internet traffic.

Colleagues,

The high availability of the internet should become Russia’s and our citizens’ competitive advantage and create, across the board, an environment conducive to education, creative work, communications and the implementation of social and cultural projects. Of course, this means new opportunities for people to get involved in the life of the country. We appreciate every creative initiative of our citizens, public associations, non-profit organisations, as well as their willingness to contribute to national development.

It is very important that the volunteer movement is becoming more popular, and it unites schoolchildren, university students, and people of different generations and ages. The Victory Volunteers project embodies the tradition of mutual assistance and respect for older generations and our history.

This year, we will celebrate the 75^th anniversary of Victory in the Great Patriotic War. For Russia, May 9 is the greatest and sacred holiday. We are proud of the generation of victors and honour their feat, and our memory is not only a tribute to our heroic past, but it also serves our future, inspires us and strengthens our unity.

It is our duty to defend the truth about the Victory; otherwise what shall we say to our children if a lie, like a disease, spreads all over the world? We must set facts against outrageous lies and attempts to distort history. Russia will create the largest and most complete set of archival documents, film and photo materials on the Second World War, accessible both for our citizens and for the whole world. This work is our duty as a winning country and our responsibility to the future generations.

Colleagues,

We can see how unpredictably, uncontrollably events are developing in the world, what is happening in the Middle East and North Africa literally in recent weeks and recent days, how regional conflicts can rapidly grow into threats to the entire international community.

I am convinced that it is high time for a serious and direct discussion about the basic principles of a stable world order and the most acute problems that humanity is facing. It is necessary to show political will, wisdom and courage. The time demands an awareness of our shared responsibility and real actions.

The founding countries of the United Nations should set an example. It is the five nuclear powers that bear a special responsibility for the conservation and sustainable development of humankind. These five nations should first of all start with measures to remove the prerequisites for a global war and develop updated approaches to ensuring stability on the planet that would fully take into account the political, economic and military aspects of modern international relations.

Russia is ready to enhance cooperation with all interested parties. We are not threatening anyone or seeking to impose our will on anyone. At the same time, I can assure everyone that our efforts to strengthen national security were made in a timely manner and in sufficient volume. For the first time ever – I want to emphasise this – for the first time in the history of nuclear missile weapons, including the Soviet period and modern times, we are not catching up with anyone, but, on the contrary, other leading states have yet to create the weapons that Russia already possesses.

The country's defence capability is ensured for decades to come, but we cannot rest on our laurels and do nothing. We must keep moving forward, carefully observing and analysing the developments in this area across the world, and create next-generation combat systems and complexes. This is what we are doing today.

Reliable security creates the basis for Russia’s progressive and peaceful development and allows us to do much more to overcome the most pressing internal challenges, to focus on the economic and social growth of all our regions in the interest of the people, because Russia’s greatness is inseparable from dignified life of its every citizen. I see this harmony of a strong power and well-being of the people as a foundation of our future.

Colleagues,

We can move towards this goal only with the active participation of society, our citizens and, of course, intense and productive work of all branches and levels of government, the potential of which should be expanded.

In this regard, I would like to spend a moment discussing state structure and domestic policy, which are defined by the Fundamental Law of our country – the Constitution of the Russian Federation. I keep getting these questions all the time, including at the most recent annual news conference.

Clearly, we cannot but agree with those who say that the Constitution was adopted over 25 years ago amidst a severe internal political crisis and the state of affairs has completely overturned since then. Thank goodness, there is no more armed confrontation in the capital or a hotbed of international terrorism in the North Caucasus.

Despite a number of acute unsolved problems that we talked about today, the socioeconomic situation has stabilised, after all. Today some political public associations are raising the issue of adopting a new Constitution.

I want to answer straight off: I believe there is no need for this. Potential of the 1993 Constitution is far from being exhausted and I hope that pillars of our constitutional system, rights and freedoms will remain the foundation of strong values for the Russian society for decades to come.

In the meantime, statements regarding changes to the Constitution have already been made. And I find it possible to express my view and propose a number of constitutional amendments for discussion, amendments that, in my opinion, are reasonable and important for the further development of Russia as a rule-of-law welfare state where citizens’ freedoms and rights, human dignity and wellbeing constitute the highest value.

Firstly, Russia can be and can remain Russia only as a sovereign state. Our nation’s sovereignty must be unconditional. We have done a great deal to achieve this. We restored our state’s unity. We have overcome the situation when certain powers in the government were essentially usurped by oligarch clans. Russia has returned to international politics as a country whose opinion cannot be ignored.

We created powerful reserves, which multiplies our country’s stability and capability to protect its citizens’ social rights and the national economy from any attempts of foreign pressure.

I truly believe that it is time to introduce certain changes to our country’s main law, changes that will directly guarantee the priority of the Russian Constitution in our legal framework.

What does it mean? It means literally the following: requirements of international law and treaties as well as decisions of international bodies can be valid on the Russian territory only to the point that they do not restrict the rights and freedoms of our people and citizens and do not contradict our Constitution.

Second, I suggest formalising at the constitutional level the obligatory requirements for those who hold positions of critical significance for national security and sovereignty. More precisely, the heads of the constituent entities, members of the Federation Council, State Duma deputies, the prime minister and his/her deputies, federal ministers, heads of federal agencies and judges should have no foreign citizenship or residence permit or any other document that allows them to live permanently in a foreign state.

The goal and mission of state service is to serve the people, and those who enter this path must know that by doing this they inseparably connect their lives with Russia and the Russian people without any assumptions and allowances.

Requirements must be even stricter for presidential candidates. I suggest formalising a requirement under which presidential candidates must have had permanent residence in Russia for at least 25 years and no foreign citizenship or residence permit and not only during the election campaign but at any time before it too.

I know that people are discussing the constitutional provision under which one person cannot hold the post of the President of the Russian Federation for more than two consecutive terms. I do not regard this as a matter of principle, but I nevertheless support and share this view.

I have already said before that our goal is to ensure high living standards and equal opportunities for all throughout the country. It is towards this goal that our national projects and development plans are aimed.

At the same time, you know about the problems to do with education, healthcare and other fields created by a divide between the federal and municipal authorities – I have pointed this out more than once. This divide and, at the same time, the complex system of powers are having a negative effect above all on the people.

The rights, opportunities and guarantees, that are legally equal for all citizens, are not provided equally in different regions and municipalities. This is unfair to people and is directly threatening our society and national integrity.

I believe that the Constitution must seal the principles of a unified system of public authority and effective interaction between the federal and municipal authorities. At the same time, the powers and practical opportunities of the local governments, a body of authority that is closest to the people, can and should be expanded and strengthened.

And lastly, the state must honour its social responsibility under any conditions throughout the country. Therefore, I believe that the Constitution should include a provision that the minimum wage in Russia must not be below the subsistence minimum of the economically active people. We have a law on this, but we should formalise this requirement in the Constitution along with the principles of decent pensions, which implies a regular adjustment of pensions according to inflation.

Fourth, Russia is a huge country, and every region has its specifics, problems and experience. Of course, this must be taken into account. I believe it is necessary to cardinally increase the role of governors in decision-making at the federal level. As you know, back in 2000 the State Council was restored at my initiative, where the heads of all regions participate. Over the past period the State Council has proven its high effectiveness; its working groups provide for the professional, comprehensive and qualified examination of issues that are most important for people and Russia. I believe it would be appropriate to fix the status and role of the State Council in the Russian Constitution.

Fifth, Russian society is becoming more mature, responsible and demanding. Despite the differences in the ways to address their tasks, the main political forces speak from the position of patriotism and reflect the interests of their followers and voters.

At the same time, almost all the parties represented in the State Duma – and you know that I have regular meetings with their leaders – believe that the Federal Assembly is ready to take more responsibility for forming the Government. (Applause.) I expected this round of applause, but I think you will have another opportunity for applause now; please listen until the end.

More responsibility for forming the Government means more responsibility for the Government’s policy. I completely agree with this position.

What is the situation like now? In accordance with articles 111 and 112 of the Russian Constitution, the President only receives the consent of the State Duma to appoint the Prime Minister, and then appoints the head of the Cabinet, his deputies and all the ministers. I suggest changing the procedure and allowing the State Duma to appoint the Prime Minister of the Russian Federation, and then all deputy prime ministers and federal ministers at the Prime Minister’s recommendation. At the same time the President will have to appoint them, so he will have no right to turn down the candidates approved by the Parliament. (Applause.)

All of this means drastic changes to the political system. However, let me repeat, considering the maturity of our main political organisations and parties as well as the reputation of civil society, I believe these proposals are justified. This will increase the role and importance of the State Duma and parliamentary parties as well as the independence and responsibility of the Prime Minister and other Cabinet members and make cooperation between the representative and executive branches of government more effective and substantive.

Colleagues,

I would like to emphasise that our country, with its vast territory, complex federal and administrative division and diverse cultural and historical traditions, cannot properly advance and even exist sustainably as a parliamentary republic.

Russia must remain a strong presidential republic. The president must undoubtedly retain the right to determine the Government's tasks and priorities, as well as the right to dismiss the prime minister, his deputies and federal ministers in case of improper execution of duties or due to loss of trust. The president also exercises direct command over the Armed Forces and the entire law enforcement system. In this regard, I believe another step is necessary to provide a greater balance between the branches of power.

In this connection, point six: I propose that the president should appoint heads of all security agencies following consultations with the Federation Council. I believe this approach will make the work of security and law enforcement agencies more transparent and accountable to citizens.

The principle of appointment following consultations can be applied to regional prosecutors as well. Currently they are appointed in coordination with regional legislative assemblies. Colleagues, this may lead to certain, including informal, obligations towards local authorities and ultimately to the risk of losing objectivity and impartiality.

As to the territories' position regarding a prosecutor candidacy in the constituent entities of the Federation, it can be considered during consultations in the Federation Council, which is in fact the chamber of the regions. We cannot have different local legislative systems in different regions; the prosecutor is a supreme authority who exercises control over the execution of laws irrespectively of any regional circumstances.

I am confident that a greater independence of prosecution agencies from local authorities would be beneficial for citizens regardless of the region. Colleagues, let us always be governed by the interests of our people.

And my seventh and final point: the judicial system – the Constitutional and Supreme courts – plays a key role in ensuring legality and citizens’ rights. I would like to emphasise, along with judges’ professionalism, their credibility should be unconditional as well. Being fair and having a moral right to make decisions that affect people’s lives have always been considered of paramount importance in Russia. The country’s fundamental law should enshrine and protect the independence of judges, and their subordination only to the Constitution and federal law.

At the same time, I consider it necessary to stipulate in the Constitution the Federation Council’s authority to dismiss, on the proposal from the President, Constitutional and Supreme Court judges in the event of misconduct that defames a judge’s honour and dignity, as well as in other cases provided for by federal constitutional law, that make it impossible for a person to maintain the status of a judge. This proposal is derived from the established practice. This is something Russia definitely needs today.

Furthermore, to improve the quality of domestic legislation, to reliably protect citizens' interests, I propose strengthening the role of the Constitutional Court, namely: to verify, at the President’s request, the constitutionality of draft laws adopted by the Federal Assembly before they are signed by the head of state. We might also think about extending the powers of the Constitutional Court to evaluate not only laws, but also other regulatory legal acts adopted by various authorities at the federal and regional levels for compliance with the Constitution.

Colleagues,

Again, the proposals made today, by no means limit the discussion around possible amendments to the Constitution. I am sure that public associations, parties, regions, the legal community, and Russian citizens will express their ideas. The broadest public discussion is needed. But, opening this discussion, I would like to give it a start in a certain direction, or at least to show what challenges we are facing.

Please, do not forget what happened to our country after 1991. After the collapse of the Soviet Union, we still had the same ambitions and of course have preserved the colossal potential – the human, intellectual, resource, territorial, cultural and historical potential, and so on. But there were also threats, dangers of a magnitude no one could have imagined ever before. And that was a pity, as they should have thought about it in due time.

Therefore in our further state building efforts, we are facing seemingly contradictory tasks that serve as a guideline for values and may appear incompatible at first sight. What am I referring to? We must create a solid, reliable and invulnerable system that will be absolutely stable in terms of the external contour and will securely guarantee Russia’s independence and sovereignty. At the same time, this system must be organic, flexible and capable of changing quickly in line with what is happening around us, and most importantly, in response to the development of Russian society. This system must ensure the rotation of those who are in power or occupy high positions in other areas. This renewal is indispensable for the progressive evolution of society and stable development that may not be infallible but ensures that the most important thing – Russia’s interests – remains immutable.

What else do I consider important and would like to emphasise? The amendments that we will discuss do not concern the foundations of the Constitution and, hence, can be approved by Parliament in line with the existing procedure and law through the adoption of relevant constitutional laws.

At the same time, considering that the proposed amendments concern substantial changes in the political system and the work of the executive, legislative and judicial branches, I believe it necessary to hold a vote of Russian citizens on the entire package of the proposed amendments to the Constitution of the Russian Federation. The final decision must be made only on the basis of its results.

The opinion of people, our citizens as the bearers of sovereignty and the main source of power must be decisive. In the final analysis everything is decided by the people, both today and in the future. I am referring to both the choice of national development strategy and daily issues in each region, city or village. We will be able to build a strong, prosperous and modern Russia only on the basis of unconditional respect for the opinions of the people, the opinions of the nation.

The current year of 2020 is a landmark in many respects. It is a transition to the third decade of the 21^st century. Russia is faced with breakthrough historical tasks and everyone’s contribution is important for resolving them. Working together we are bound to change our lives for the better. I often mention the word “together” because Russia means all of us. I am referring not to the people present in this hall or rather not only to the people present in this hall but all citizens of this country because I believe that success is determined by our will for creation and development, for the implementation of the most ambitious plans, our labour for the sake of our families and loved ones, our children and their future, and hence, for the sake of Russia’s greatness and the dignity of its citizens.

Thank you for your attention. (Applause.)

The National Anthem of the Russian Federation.

Presidential Address to Federal Assembly

2019-02-25T15:21:03+04:00

The President of Russia delivered the Address to the Federal Assembly. The ceremony took place in Gostiny Dvor.

The presentation of the Address was attended by Federation Council members, State Duma deputies, members of the Government, leaders of the Constitutional Court and Supreme Court, governors.

* * *

President of Russia Vladimir Putin: Members of the Federation Council, State Duma deputies, citizens of Russia,

Today’s Address is primarily devoted to matters of domestic social and economic development. I would like to focus on the objectives set forth in the May 2018 Executive Order and detailed in the national projects. Their content and the targets they set are a reflection of the demands and expectations of Russia’s citizens. People are at the core of the national projects, which are designed to bring about a new quality of life for all generations. This can only be achieved by generating momentum in Russia’s development.

These are long-term objectives that we have set for ourselves. However, work to achieve these strategic goals has to begin today. Time is always in short supply, as I have already said on numerous occasions, and you all know this all too well. There is simply no time for getting up to speed or making any adjustments. All in all, I believe that we have already completed the stage of articulating objectives and outlining tools for achieving our goals. Departing from the targets that were outlined would be unacceptable. It is true that these are challenging objectives. That being said, lowering the requirements for specific targets or watering them down is not an option. As I have already said, these are formidable challenges that require us to undertake major efforts. However, they are in step with the scale and pace of global change. It is our duty to keep pushing ahead and gaining momentum.

If someone prefers to work in the business as usual mode, without challenges, avoiding initiative or responsibility, they had better leave immediately. I already hear that some things are “impossible,” “too difficult,” “the standards are too high,” and “it will not work.” With such an attitude, you had better stay away.

Besides, you cannot fool the people. They are acutely aware of hypocrisy, lack of respect or any injustice. They have little interest in red tape and bureaucratic routine. It is important for people to see what is really being done and the impact it has on their lives and the lives of their families. And not sometime in the future, but now. We must not repeat the mistakes of the past decades and wait for communism to arrive. We have to change the situation for the better now.

Therefore, the work of the executive branch at all levels should be coordinated, meaningful and energetic. The Government of Russia must set the tone.

At the same time, I would like to emphasise and repeat: our development projects are not federal and even less so agency-based. They are national. Their results must be visible in each region of the Federation, in every municipality. It is here, on the ground, that the majority of specific tasks is implemented.

Allow me to underscore: thanks to years of common work and the results achieved, we can now direct and concentrate enormous financial resources – at least enormous for our country – on development goals. These resources have not come as a rainfall. We have not borrowed them. These funds have been earned by millions of our citizens – by the entire country. They need to be applied to increase the wealth of Russia and the wellbeing of Russian families.

Very soon, this year people should feel real changes for the better. It is on the basis of their opinion and assessments at the beginning of next year that we will evaluate the first results of our work on the national projects. And we will draw the appropriate conclusions about the work quality and performance at all levels of executive power.

Colleagues,

Let me now share some specifics on our objectives. I will begin with the key objective of preserving our nation, which means providing all-around support to families.

Family, childbirth, procreation and respect for the elderly have always served as a powerful moral framework for Russia and its multi-ethnic people. We have been doing everything in our power to strengthen family values and are committed to doing so in the future. In fact, our future is at stake. This is a task shared by the state, civil society, religious organisations, political parties and the media.

Russia has entered an extremely challenging period in terms of demographics. As you know, the birth rate is declining. As I have already said, this is caused by purely objective reasons, which have to do with the immense human losses and birth dearth experienced by our country in the 20^th century, during the Great Patriotic War and the dramatic years following the dissolution of the Soviet Union. This does not mean, however, that we must accept this situation or come to terms with it. Definitely, not.

We succeeded in overcoming the negative demographic trends in the early 2000s, when our country faced extreme challenges. This seemed to be an impossible challenge at the time. Nevertheless, we succeeded, and I strongly believe that we can do it again by returning to natural population growth by late 2023 – early 2024.

Today, I wanted to talk about a new package of measures that has already been prepared to support families.

First, it is important that having children and bringing them up do not put families at the risk of poverty or undermine their wellbeing. As you know, we have already provided for the payment of subsidies for the first two children until they reach 18 months. Benefits for the first child are paid from the federal budget, and families can use the maternity capital subsidy for obtaining benefits for their second child. The size of the subsidy depends on the regional subsistence level for a child. It may vary from 8,000 rubles in Belgorod Region, for example, to 22,000 rubles in Chukotka Autonomous Area, with the national average of over 11,000 rubles a month per child. Currently these allocations are reserved to families whose income does not exceed the subsistence wage multiplied by 1.5 per person. It is time that we make the next step.

Starting January 1, 2020, I propose raising the bar to two subsistence wages per family member. This is what people have requested and these requests come directly into the Executive Office. This measure will increase the number of families entitled to additional benefits by almost 50 percent. Some 70 percent of families with one or two children will be able to benefit from help from the Government.

Second. At present, carers looking after children with disabilities and people disabled since childhood receive an allowance of only 5,500 rubles. I suggest increasing this to 10,000 rubles, starting July 1. Of course, I understand that it is still a small amount. However, it will be an additional measure of support for families with a child who needs special care.

Third. The income of Russian families must, of course, increase. This is a serious task that requires a comprehensive solution. I will speak about this in greater detail later. But we need direct measures. First of all, the tax burden on families needs to be relieved. The approach should be very simple: the more children there are, the lower the tax. I propose increasing federal tax relief on real estate for families with many children. I also propose lifting taxes on 5 square metres in a flat and 7 square metres in a house per each child.

What does this mean? If, for example, right now, 20 square metres in a flat are not subject to tax, the new measure will mean that for a family with three children, an extra 15 square metres will not be subject to tax. Regarding plots of land that belong to families with many children, I propose that 600 square metres should be exempt from tax, and this means most plots of land will be free from taxation. Let me remind you that this benefit is already available to pensioners and people of pre-retirement age. Of course, in many Russian regions there are local tax benefits on land and property for large families. However, the benefit being imposed at the federal level guarantees that it will be available everywhere in the country. I want to ask regional officials to propose additional tax measures to support families with children.

Fourth, the Government and the Central Bank need to consistently maintain the policy to lower mortgage rates to 9 percent, and then to 8 percent or below, as stipulated in the May 2018 Executive Order. At the same time, special measures of support should be provided for families with children, of course. As a reminder, last year, a preferential mortgage programme was launched for families that have had their second or subsequent child. The rate for them is 6 percent. Anything higher is subsidised by the state. However, only 4,500 families have used the benefit.

The question is why. It means that people are somehow dissatisfied with the proposed conditions. But it is also clear why. A family making a decision to buy housing certainly makes plans for a long or at least medium term, a lasting investment. But with this programme, they take out a loan, start paying the instalments, and the grace period ends. The interest is actually subsidised only for the first 3 or 5 years. I propose extending the benefit for the entire term of the mortgage loan.

Yes, of course, it will require additional funding, and the cost will be rather high: 7.6 billion rubles in 2019, 21.7 billion rubles in 2020, and 30.6 billion rubles in 2021. But the programme is estimated to reach as many as 600,000 families. We certainly need to find the money. We know where to get it. We have it, and we just need to use it in the areas that are of major importance to us.

And one more direct action solution. Considering the sustainability and stability of the macroeconomic situation in the country and the growth of the state’s revenues, I consider it possible to introduce another measure of support for families having a third and subsequent children. I suggest paying 450,000 rubles directly from the federal budget to cover this sum from their mortgage. Importantly, I propose backdating this payment starting January 1, 2019, recalculating it and allocating relevant sums in this year’s budget.

Let us see what we have. If we add this sum to the maternity capital, which can also be used for mortgage payments, we will get over 900,000 rubles. In many regions, this is a substantial part of the cost of a flat. I would like to draw the attention of the Government and the State Duma to this issue. If need be, the budget will have to be adjusted accordingly. An additional 26.2 billion rubles will be required for this in 2019. The relevant figures for 2020 and 2021 are 28.6 billion rubles and 30.1 billion rubles, respectively. These are huge funds but they should be allocated and used in what I have already described as a very important area.

It is necessary to give families an opportunity not only to buy ready-made housing but also to build their own housing on their land. I would like to ask the Government to draft in cooperation with the Central Bank convenient and, most importantly, affordable financial instruments for supporting private housing construction because it is not covered by mortgage loans today.

And, last but not least, the tax on land must be fair. Obviously, the cadastral or market value of a land plot can change but tax rates must not go up and down unpredictably like roller coaster rides. We have already limited to 10 percent the annual growth of the tax rates for residential property. I suggest establishing the same limit for land plots.

Moving on, today, when construction companies build social facilities and transfer them to the state or municipalities, they have to pay profit tax and VAT. We need to relieve construction companies of this burden (including our innovations in the construction sector). This will serve as an impetus for the comprehensive development of cities and townships, ensuring that families have everything they need near their homes: clinics, schools and sports facilities. By doing this, we will enable parents to work, study, live happily and enjoy parenthood.

We have come close to guaranteeing universal access to kindergartens, but by the end of 2021, we will have to resolve the problem with nurseries by enabling them to accept 270,000 more children, including in the private sector, with 90,000 places to be created as early as this year. The federal and regional budgets should allocate 147 billion rubles for this purpose, over a three-year period. Let me add that enrolling in a nursery group, kindergarten, getting subsidies, benefits or the tax deductions that I have already mentioned and, I hope, that we will come up with, together with you, all this should happen without any additional applications, excessive paperwork or having to visit various social services. By the end of 2020, all the key government services must be provided in a proactive format where a person will only need to send in a request for a service that he or she needs, and the system will take care of all the rest independently and automatically.

I would like to emphasise that the package of measures to support families proposed today is not an exhaustive list of initiatives. It sets the priorities. Considering the challenges posed by the state of Russia’s demographics, we will continue to channel more and more resources into this area. I ask all of you, colleagues, including both the Government and the Federal Assembly, to think about it and suggest solutions.

Colleagues, solving our demographic problems, increasing life expectancy and reducing mortality rates are directly related to eradicating poverty. Allow me to remind you that in 2000, there were more than 40 million people living below the poverty line. Now there are about 19 million, but this is still too many, too many. However, there was a time when their number dropped to 15 million, and now it has grown a little again. We must certainly focus our attention on this — on combating poverty.

Furthermore, there are even more people facing serious financial problems than those officially living below the poverty line. They are forced to cut spending on such essentials as clothes, medicines and even food. Those most often faced with poverty are large or single parent families, families with members with disabilities, as well as single pensioners and people who cannot find a good job, a well-paid job because there are no openings or they lack qualifications.

There are many reasons for poverty, not only in our country, but also in the world, but it always literally crushes a person, dimming their life prospects. The state must help people, help them out of difficult life situations. The experience of some of our regions shows that it is possible to work effectively for this. I will name these regions: Kaluga, Ulyanovsk, Tomsk, Vologda, and Nizhny Novgorod Regions, and a number of other regions of Russia. Their experience shows that so-called social contracts can be a working mechanism of such support.

How does it work and what is this all about? The state helps people find jobs and improve their skills. The state provides financial resources to families to run a household farm or to start a small business, and by the way, these are substantial resources of tens of thousands of rubles. Let me emphasise that support programmes will be tailored to meet the needs of every specific applicant. The allocation of these resources creates some obligations for the recipients: they have to go through training, find a job in the given field and provide a steady income for their family and children. Mechanisms of this kind are in place around the world and are very effective. Social contracts can change the lives of those who really want to do it.

It is estimated that more than 9 million people will be able to benefit from these support measures over a five-year period. I instruct the Government to assist the regions that are proactive in introducing social contracts and work with them on co-financing mechanisms.

Moving on, there are currently many people and families taking out loans for various purposes, including consumer loans. Of course, borrowers have to be aware of their obligations and refrain from assuming an excessive burden. That being said, anything can happen: people can lose their job or become ill. In this case, the last thing is to force people into a corner, and it is also pointless in economic terms. Additional legal guarantees are needed to protect people. I propose introducing mortgage payment holidays, as we have recently discussed in Kazan, to enable people who lose their income to suspend mortgage payments. They must get a chance to keep their home, if it is the only property they own, and postpone loan payments. This is not an easy task, and we have to understand how this can be done so as not to harm financial institutions while supporting the people. This can be done, however.

I also ask the Bank of Russia and law enforcement agencies to put things right without delay in the microlending segment and protect people from fraud or extortion by dishonest lenders.

Let me emphasise that as we seek to overcome poverty and develop the social security net, we need to reach every family in need and understand the problems it faces. It should not be possible to refuse assistance simply because the life circumstances a person is facing are slightly inconsistent with the criteria set by a programme.

And, of course, it is necessary to be scrupulous and attentive to every detail. By way of example, and this is not a very good example for our work, I would like to say the following: pensions were adjusted for inflation under the pension reform this year. But if a pensioner’s income exceeded the subsistence rate, the social payments were no longer made at the same level. They were either cancelled altogether or reduced. As a result, the pensions were not increased at all, or the increases were much less than a pensioner expected. So many people feel cheated with good reason. Probably, many people in this hall understand what this is all about. We made payments from the regional or federal budget to achieve the subsistence level. We made adjustments for inflation and the cost of living either matched or exceeded it. So these payments were discontinued and that was it.

It was necessary to take into account all the nuances but this was left undone, and of course, this should not be allowed to happen. This injustice, and it is certainly an injustice, should be sorted immediately. Starting this year, adjustments of pensions and monthly payments should by all means be above the subsistence rate of pensioners that is established every year. In other words, the state should first bring pensions to the subsistence level and only after that make adjustments in pensions and monthly payments. Payments for the first months of this year must be recalculated and people should be paid the money due to them that they have not received.

I would like to emphasise that all those who work in the social sphere or join the government or municipal services in order to help people resolve their urgent problems, must meet the highest professional standards. I believe by and large this is the case. Of course, this is a very complicated job. We all understand that working with people every day, from morning until night, is indeed difficult. But if you have this job you should realise that it is no less important to understand people, to know what they feel, empathise, share their worries and concerns and never permit yourself arrogant attitudes or a lack of respect for people, either in word or deed. I would like you to always remember this.

Colleagues,

The next important subject is healthcare. I know that, on the one hand, its current state seems to be improving, and medical treatment is becoming more accessible. Nevertheless, many people are not satisfied. It is easy to understand the reasons for this. As a rule, people judge the healthcare system by its primary component, that is, outpatient clinics and paramedic stations. People voice complaints with regard to their work. Quite often, they have to wait many days to see a specialist, and it is impossible to quickly undergo the required tests free of charge. People in remote communities are even having trouble getting appointments with medical personnel. Yes, the number of paramedic stations and mobile medical units continues to increase, but people in areas where there are no such facilities care nothing about the overall statistics.

I want to emphasise that medical treatment should become accessible for everyone by the end of 2020 in all populated areas across Russia without exception and for all citizens, regardless of their place of residence. For your information, an additional 1,590 outpatient clinics and paramedic stations are to be built or renovated in 2019–2020, and I hope that this will be accomplished.

Today, a number of regions are implementing the Thrifty Outpatient Clinic project. As a result, the waiting time to get an appointment and see a doctor is reduced three or four times over, on the average. I have visited such outpatient clinics, and they are operating very well. Much better conditions are created for people with disabilities and for parents with children. Unfortunately, there are very few such outpatient clinics so far; they are rather an exception than the rule all across the nation.

Considering the best regional practices , and, I repeat, there are such practices, I hereby instruct the Government to approve the high standards of thrifty outpatient clinics by the end of the year and their certification regulations. Next year, you have to team up with the regions to introduce mechanisms incentivising managers and medical personnel to improve the quality of their work. First of all, we have to completely convert all paediatric outpatient clinics to new standards already in 2021. Please note that the sign “Thrifty Outpatient Clinic” is not what counts. Most importantly, people should at long last perceive the state’s respectful and truly considerate attitude towards their health.

Improving IT penetration in healthcare will make it more accessible. Online links between medical institutions, pharmacies, doctors and patients must be streamlined over the next three years. Let me add that social security medical assessment boards must be finally included into this digital network in order to free elderly people, people with disabilities and families with children from waiting lists and the need to produce various certificates that are often useless.

Primary care is understaffed. To address this matter, comprehensive efforts to develop medical education should be accompanied by initiatives that produce immediate results. In this connection, I propose removing age restrictions for the Country Doctor programme so that professionals over the age of 50 can also receive a one-time payment when moving to a rural area or a small city: 1,000,000 rubles for doctors and 500,000 rubles for paramedics.

The most complex surgery is currently performed not only at federal, but also at regional clinics and centres using the most advanced equipment. At the same time, patient recovery is also critical. We have never had a system of this kind, but we have to start with something. A lot has to be done in this area. Let us begin by creating at least two world-class recovery facilities for children, just as we did with perinatal centres, and proceed from there.

In my last year’s Address, I proposed a programme for fighting cancer. At least 1 trillion roubles will be allocated to this effect over the next six years. This is about providing timely, effective and accessible treatment, using advanced technologies that are effective in most cases and enable people to overcome this dangerous disease. Today, the leukaemia recovery rate for children exceeds 80 percent, and for certain types of cancer, more than 90 percent of patients recover. Not that long ago, in the mid-1990s, this disease was almost untreatable and only 10–20 percent of children could be saved. Russia lacked both the technology and capabilities at the time. In many cases, the only option was to turn to foreign clinics. Those who could afford it did so.

We were aware of how tragic this situation was, which prompted us to focus on improving cancer treatment for children, developing oncohaematology, using the capabilities offered by our research institutions, the healthcare system, and worked proactively with our foreign partners (some doctors simply moved from Germany to Moscow, and spent a lot of time here, and probably still do), which yielded results.

We will continue working to overhaul the system of cancer care. Early detection is of crucial importance. In fact, we have revived the system of health screening and regular medical check-ups. These have to include cancer screening. It has to be made obligatory. People must have the opportunity to make appointments remotely, to choose a suitable time for visiting an outpatient clinic, including in the evening or at the weekend, so that the check-up can be carried out without any additional formalities.

Next, over the next few years we must create a number of new areas combining healthcare with social services. Thus, we must overhaul the system of assistance for people who need long-term help at medical facilities or at home, adjust this system to the needs of specific families and individuals, support people with their everyday needs by assigning district nurses or carers, or training relatives in medical or other necessary skills. The application of these recipient-oriented principles of assistance began last year in Volgograd, Kostroma, Novgorod, Pskov, Ryazan and Tula regions. We must introduce them throughout the country within a timeframe of four years.

Palliative care is a matter of not only medical but also of social, public and moral concern. According to the available information, some 800,000 people need this assistance, and volunteers have told me that the figure is around one million. As you know, in January I visited a children’s hospice in St Petersburg, where we discussed this matter. I know that yesterday the State Duma adopted in the second reading amendments to the legislation on palliative care. I would like work on this law to be completed as soon as possible. We will then monitor its application so we can promptly make amendments, taking into account the opinions of volunteers, whom I have mentioned, doctors, carers, members of the public and religious associations and benefactors, that is, everyone who have long been providing heartfelt palliative care.

Colleagues, people have increasingly high demands on environmental safety issues. Perhaps, the most painful topic is municipal waste. If you remember, it came up for the first time during one of my Direct Lines. Yes, we have probably neglected the waste disposal problems for maybe a hundred years, which means we have never paid attention to them. Many landfills are overfilled because waste has been accumulating there for decades. The landfills have turned into real mountains of garbage near residential areas.

By the way, I am also interested to know how you issued permits for the construction of residential neighbourhoods next to these dumps and landfills. Didn’t you think of that? You should have. I urge the representatives of the authorities at all levels: pretending that nothing is happening, turning away, brushing aside people’s needs is absolutely unacceptable. These issues are difficult, of course, but difficult issues must also be addressed.

This year, the regions began adopting a new system of solid municipal waste management. However, if the only change is a rise in rubbish clearance prices – well, this is not real work; it is a sham. People need to see what they are paying for and what real changes are happening. It is necessary to restore order in this area, to get rid of shady businesses that do not bear any responsibility and only get super-profits dumping trash at random sites.

We need to build a civilised and safe system of waste treatment, recycling and disposal. Surprisingly, a year ago I personally had to interfere on some matters. I had to talk to the Interior Ministry and the Prosecutor’s Office several times. You know, surprisingly, I would like to say it again, almost nothing moved forward until I gave an order to station a guard there and not to let anyone in. This is the only way it works, because these shady companies, the so-called fly-by-nights, they just make quick profits and shut down their so-called business.

I ask the Russian Popular Front to ensure effective public control here, including reliance on public environmental inspectors. Their signals regarding any violations must be considered by the authorities, who must adopt specific measures. In the next two years, 30 large problem landfills within city boundaries must be closed and rehabilitated, and in six years, all the rest. At the same time, it is necessary to increase the share of waste treatment from today's 8–9 percent to 60, so as not to accumulate new millions of tonnes of trash.

It is necessary to introduce stricter environmental requirements when it comes to utility services and energy and transport enterprises. In part, I am urging businesses to play a more active role in natural gas motor fuel projects, and invest in the formation of a network of fuelling stations and fuel systems using liquefied natural gas. We have enough of it, more than any other country. Indeed, this is a complicated and costly project but it should be carried out because it will produce results not only for businesses but for the people as well.

A positive effect from the industry’s transfer to the best affordable technologies and strict environmental standards should be felt by residents of major industrial centres of the country, primarily the 12 cities I mentioned in the 2018 Address. These places should be finally removed from the zone of real environmental disaster. Over a period of the next six years, the amount of polluting emissions in the air should be reduced there by no less than 20 percent.

To prevent anyone from the temptation of dodging the implementation of this job, it is necessary to strictly monitor industrial and other companies responsible for this, to map out the specific steps they should take to minimise environmental damage, and to register all this in a law on emission quotas. I know all too well what this is all about. I know that fairly influential lobbyists are trying to impede this draft law as much as they can. I know their arguments very well too: the need to preserve jobs and a complicated economic situation.

But this cannot go on endlessly in this manner. It must not. Let me recall that in making such decisions we should be guided by the interests of the people of Russia rather than corporate interests or interests of some individuals. Colleagues, please pass this law during the spring session.

Finding solutions for environmental problems is the job of our researchers and people in industry. Each of us is responsible for this. I am urging young people, among others, to take a more active part in this work. We must hand over to the future generations an environmentally safe country and preserve Russia’s natural potential as well as its specially protected areas. This year new national parks will open in the republics of Daghestan, Komi and Sakha (Yakutia), Altai Territory and Chelyabinsk Region. However, I would like to draw your attention to the fact that many specially protected areas do not yet have precise borders and their regulations are not observed.

I have instructed the Ministry of Natural Resources to conduct a detailed audit. All sanctuaries must be registered in the cadastre. It is also necessary to adopt a law according to which only environmental tourism can take place in nature reserves, without any withdrawal of territories, wood cutting or major construction work. Naturally, it is necessary to take into account the interests of the locals but these issues should be resolved in a package.

Colleagues, the number of students from small towns and remote areas studying at the best Moscow and regional universities is increasing. According to international assessments, our elementary, middle and high school students demonstrate good results in the humanities and hard sciences. We can see it ourselves, based on the results of contests and various student competitions. All this is an indicator of qualitative changes in our school education.

However, despite all these achievements, we must not overlook the obvious problems in this crucial area. The share of schools with modern study conditions has increased from 12 percent in 2000 (only 12 percent) to 85 percent in 2018. But even today, some 200,000 children still go to schools where there is no proper heating, water supply and sewage system. Yes, it is less than 1.5 percent of all schoolchildren, but when their parents see these conditions, any words about justice and equal opportunities only irritate them. I want to draw the attention of the heads of the regions where poorly equipped schools still exist. This problem can be completely resolved within two years. We can do it. I know that the Government is thinking about it and making certain decisions. I am asking you to support the regions that lack their own resources.

When in 2006 we started providing internet connections to schools, the technology was completely different. You know, it seemed like a real breakthrough. And it was indeed a breakthrough at the time. Right now, this technology seems ancient, and we have new tasks to resolve. By the end of 2021, all Russian schools must have a high-speed internet connection rather than just a connection. Let me remind you that in 2006, when schools were being hooked up to the internet, the recommended speed was 128 kbps. Now we need 50 Mbps or 100 Mbps, which is at least 400 times higher. This will help our kids to gain access to lessons and lectures by prominent teachers, to contests and Olympiads; it will allow them to significantly expand their capabilities and get involved in online projects with their fellow students from other regions and countries. The content of educational programmes must also change. The national standards and programmes must reflect the priorities of the country’s science and technology development, while the federal lists of recommended textbooks must include the best of the best books.

Of course, human resources are the most important issue. I have already spoken today about expanding the Country Doctor programme. I propose starting a similar programme for education, the Country Teacher. Teachers who decide to move to smaller towns and villages will receive a one-time payment of one million rubles.

We must work consistently to strengthen the common environment of education and culture. The culture and education centres in Kaliningrad, Kemerovo, Vladivostok and Sevastopol will open no later than in 2023. Our leading museums and theatres will be represented there, and branches of art schools will start working there already next year. The demand for a rich cultural environment is very high, primarily in the regions, where a great number of talented and committed people are working.

I propose greatly expanding assistance to local cultural initiatives, that is, projects dealing with local history, crafts and the preservation of the historical heritage of our peoples. For example, additional allocations can be made towards this from the Presidential Grants Fund. In addition, we will allocate over 17 billion rubles within the Culture national project for the construction and renovation of rural culture clubs and over 6 billion rubles for supporting culture centres in Russia’s small towns.

I would like to remind you that medical and educational institutions are exempt from profit tax, but only until January 1, 2020. I propose making this incentive of unlimited duration and also extending it to the regional and municipal museums, theatres and libraries. By the way, this will allow them to save some 4 billion rubles, which they will invest in development or will use to raise salaries. And lastly, this measure will encourage private investment in local cultural establishments.

Colleagues, I would like the heads of regions to ensure that salaries in education, healthcare, culture and other public sectors are kept on a par with the average wage in the given region’s economy. Colleagues, this is very important. I keep talking about this at all my meetings. We must not lower this standard. At the same time, the average wage in the economy must grow. Over 40 million people who work in the public and defence sectors and are non-working pensioners receive fixed payments. These payments must grow together with the inflation at the least. I ask the Government to take this into account.

More than 70 million people work in manufacturing, agriculture or the services or are small business owners. The state of Russia’s economy has a direct bearing on their income, wellbeing and confidence in the future. The primary tool for achieving steady wage increases is to promote quality employment and free enterprise, qualified, well-paid jobs in all regions, including both traditional and new sectors. High economic growth rates are essential. This is the only way to overcome poverty and ensure steady and perceptible increases in income. This is the key to success. As soon as in 2021, Russia’s economic growth rate must exceed 3 percent and stay above the global average afterwards. This objective should not be discarded.

The Government and the Central Bank are once again tasked with complying with the target inflation rate. I have already said this, and we knew that this would happen when we put aside financial resources for the national projects. This was an expected outcome, and now we need to make sure that the situation gets back to normal. We can do this. As I said, the Government and the Central Bank must ensure that the inflation targets are met and create a favourable macroeconomic environment for facilitating growth in general. We have a strong financial safety cushion.

I have something positive to share with you. For the first time ever, our reserves fully cover not only the sovereign debt, which is quite small, but also private borrowings. These funds are at work, and investment of the National Welfare Fund generates budget revenue. Therefore, I would like to address those of our colleagues who constantly criticise the Government, its financial and economic ministries and ask where the money went and where we invested it. We set a target to reach a certain level, after which we can use these funds, although cautiously so as not to cause any macroeconomic disturbances. We are about to reach this level, and are beginning to do it. The proceeds from these investments go to the federal budget. In 2018, proceeds from investing the National Welfare Fund in the amount of 70.5 billion rubles were added to the budget.

To achieve high growth rates, it is also necessary to resolve systemic problems in the economy. I will highlight four priorities here.

The first one is faster growth in labour productivity, primarily based on new technologies and digitalisation; the development of competitive industries and, as a result, an increase in non-primary exports by more than 50 percent in six years.

The second one is to improve the business climate and the quality of national jurisdiction, so that no one moves their operations to other jurisdictions, to ensure that everything is reliable and runs like clockwork. Growth in investment should increase by 6–7 percent in 2020. Achieving this level will be one of the key criteria for evaluating the Government’s work.

The third priority is removing infrastructural constraints for economic development and for unlocking the potential of our regions.

And the fourth thing is training modern personnel, of course, and creating powerful scientific and technological foundations.

Now I would like to expand on our specific tasks in these fields.

A colossal guaranteed demand for industrial and high-tech products is being formed in Russia, I can say this without any exaggeration. So the words I would like to use – we are faced with historical opportunities for a qualitative growth of Russian business, mechanical engineering and machine-tool making, microelectronics, IT-industry, and other industries. The national projects alone include – just think of it – 6 trillion rubles worth of procurement plans for medical and construction equipment, instruments, telecommunications systems, and systems for housing and public utilities. And these resources should work here in Russia.

So I am urging the Government, the regions, the representatives of state-owned companies I see here in this room – you certainly want to buy all the most modern equipment and as inexpensively as possible. Naturally, everyone wants to be and should be competitive, but wherever possible, you need to rely on our producers, on domestic ones. We must find them, and even work together with them. Of course, there must be a competitive environment, but we already have the tools to support Russian manufacturers. We must not forget about these tools, and use them.

I would like to emphasise that access to state contracts must be equal (at least for our own, for national companies), and the orders should go to those who prove their sustainability with hard work and results, with willingness to change, to introduce advanced technology and increase labour productivity, and offer the best competitive products.

As concerns the defence industry, we must use our current capacities for diversification, to expand civil production. Colleagues understand what I am talking about here. There are certain targets for each year. And they must be achieved, no matter what.

And of course, now is the time for more daring initiatives, for creating businesses and production companies, for promoting new products and services. This wave of technological development allows companies to grow and win markets very quickly. There are already examples of successful companies, innovative companies. We need many more of them, including in such fields as artificial intelligence, Big Data, the Internet of Things and robotics.

I am instructing the Government to create the most comfortable conditions for private investment in technological startups and to involve development institutions in their support. I am asking members of parliament to promptly pass the laws that are most crucial for creating the legal framework of the new digital economy, laws that will allow to close civil deals and raise funds using digital technology, to develop e-commerce and services. The entire Russian legislation must be geared up to reflect the new technological reality. These laws must not restrict the development of innovative and promising industries but push this development forward.

The most crucial indicator of a business’s efficiency and competitiveness lies in expanding export and entering external markets. The success of our agricultural industry is, of course, a good example of such development. Our agricultural export increased by 19.4 percent in 2018 reaching $25.8 billion. In 2024, we must reach $45 billion. Incidentally, we are not only one of the largest wheat exporters (last year we exported 44 million tonnes). We have at least one more significant achievement. Thanks to the developments of Russian researchers we are no longer dependent on other countries for wheat seeds. Experts will confirm how critically important this is. Russia must have the entire range of its own advanced agricultural technology, which must be available not only to large but also to small farms. This is literally a matter of national security and successful competition in the growing food markets.

Improving the quality of life for those who work in rural areas is a key long-term factor of the agricultural industry’s steady growth. I would like to point out to the Government that as soon as this year, they must approve a new development programme for rural territories that must be enforced as of January 1, 2020.

One more thing. I think everybody will agree that our massive natural resources constitute our natural advantage. They need to be used for increasing the production of organic produce. I am instructing the Government to create a protected brand for clean products, a brand that will guarantee safety of the technology used and win the reputation of high quality both on the domestic and foreign markets. Trust me, it will be extremely popular abroad. There is hardly anything clean left there.

Colleagues, to achieve the ambitious goals facing the country, we must rid the system of everything that restricts freedom of enterprise and business initiative. Honest businesses should not face the risk of criminal or administrative prosecution. I have already noted this matter in one of my Addresses, and I have cited the relevant figures. Unfortunately, the situation has not improved much.

Today, almost half of all cases (45 percent) opened against entrepreneurs do not get to trial. What does this mean? This means that they were opened in a slipshod manner or under some unclear pretext. And what does this mean in practice? As a result, 130 jobs are lost on average every time a business closes down as result of an investigation. Let us think about this figure; this is becoming a major economic problem.

The business community points to a number of legislative and law enforcement problems. I agree that we need to closely analyse the criteria under which all employees of a company can be considered to be part of a group that is guilty of collusion just through the fact of working for that company. To be honest, this is complete nonsense, but, unfortunately, it happens time and again. And this leads to a stricter detention during the investigation and a more substantial penalty later on. Additionally, we need to strictly limit the grounds for extending the term of detention during the investigation of so-called economic criminal cases. Today, this sometimes happens without any grounds, simply because the investigators had no time to conduct the required expert checks or as a result of delays in the investigation.

We have discussed this matter with the Prosecutor General and the President of the Supreme Court. This is what happens: a person is kept behind bars, and he has not been summoned for questioning for several months. The prosecutor wants to know why he had not been questioned, and they tell him that the investigator was on holiday. Of course, investigators, especially those at the Interior Ministry, handle a tidal wave of criminal cases, and we need to do something about that, we need to take a closer look at this matter. Perhaps we should set aside additional resources and increase the number of investigators. Nevertheless, how can this be explained? A person is kept behind bars while the investigator has left on holiday and has not questioned him for several months. This should not happen, we need to sort this out. I ask the Supreme Court and the Prosecutor General’s Office to analyse all these problems once again and to submit their proposals.

I suggest that our business associations and the Agency for Strategic Initiatives create a special digital platform – in fact, they themselves have advanced this initiative – which entrepreneurs will use to make public any instances of pressure on business and to demand a formal court hearing.

I urge the heads of law enforcement agencies not to be wary of this. This initiative will serve as an additional support, so that senior officials at these agencies will promptly receive the objective information they need to make decisions, at least at the departmental level. I ask the Government and the business community to discuss the technological solutions and the legal framework for implementing this initiative, and the law enforcement agencies – the Interior Ministry, the Federal Security Service, the Prosecutor General’s Office and the Investigative Committee – to coordinate regulations for working with the entrepreneurs’ complaints, including deadlines. This platform must start working, at least in pilot mode, by the end of the year.

Next, the Government has proposed overhauling the regulatory framework. This is good, and we must give all-round support to this. However, I believe that this is not enough. We must take even more radical steps. Indeed, let us draw the line and suspend all the existing regulatory laws and departmental regional orders, letters and instructions as of January 1, 2021. In the two years until then, we must update the regulatory laws together with the business community, retaining only those documents that satisfy current requirements and shelving the rest.

When we discussed this issue, many of our colleagues said honestly that they were terrified. Yes, this is scary, but the problem does exist. It will not be an easy job. The files are really thick in some areas and departments. They have been piling up for decades since the Soviet era, or even “as far back as Ochakov and the Crimean war.” [The quote is from Alexander Griboyedov’s Woe from Wit written in 1824.] I am not referring to the year 2014, of course. (Laughter) Some of these documents go back to the time of Alexander Griboyedov or even before him. So much has been written and regulated. But frankly, I doubt that even the personnel of these agencies know everything that is written in these documents. Hence, we must complete their analysis within two years. There is nothing to fear. We must roll up our sleeves and do it, keeping or updating only the documents we really need to properly organise our activities.

Colleagues, infrastructure upgrades need to be accelerated using state-of-the-art technology. This is essential for enhancing a country's connectivity, and especially for Russia, the world’s largest country with its vast territory. This is essential for strengthening statehood, unleashing the country’s potential and driving national economic growth.

This year, the railway section of the Crimean Bridge will be launched, and will become a powerful impetus. I would like to take this opportunity to thank all the construction and railway workers. We saw that a bypass railway was built near Krasnodar alongside an approach railway to this junction from the Caucasus coast. As I have said, trains will begin using the Crimean Bridge in 2019, creating a powerful development driver for Crimea and Sevastopol.

In addition to this, the expressway linking Moscow and St Petersburg is expected to be completed, creating new business opportunities and jobs for people living in Novgorod, Tver, Leningrad and Moscow regions.

More than 60 airports will benefit from upgrades over the next six years, including international airports in Khabarovsk, Yuzhno-Sakhalinsk and Petropavlovsk-Kamchatsky.

In 2025, the throughput capacity of the Baikal-Amur Mainline and Trans-Siberian Railway will grow 1.5 times, reaching 210 million tonnes, which is very important for the development of Siberia and Russia’s Far East.

Let me reiterate that key indicators related to social and economic development and quality of life in all Russia’s Far Eastern regions are expected to exceed the national average. This is a national cause, and a major priority of our efforts to promote Eastern Siberia and the Far East as strategic territories. All agencies have to constantly keep this in mind.

In September, we will have a meeting in Vladivostok to discuss what each of the federal agencies has done and intends to undertake for the Far East. All the plans for building and upgrading roads, railways, sea ports, air service and communications must prioritise regional development, including promoting these regions as travel destinations.

There is enormous interest in Russia, our culture, nature and historical monuments. Taking into consideration the success of the World Cup, I propose making greater use of e-visas and thinking more broadly about how to streamline visa processing for tourists coming to Russia.

Next. This year we must adopt a master plan for developing the infrastructure of a digital economy, including telecommunications networks, as well as data storage and processing capacities. Here we need to look ahead as well. The task for the next few years is to provide universal access to high-speed internet and start using 5G communications networks.

To achieve a revolution in communications, navigation and systems for remote sensing of the Earth, we must dramatically increase the capabilities of our satellite group. Russia has unique technology for this, but such tasks require a fundamental upgrade of the entire space industry. I am instructing Roscosmos and the Moscow Government to establish a National Space Centre. My colleagues came to me and told me about it. This is a good project is designed to unite relevant organisations, design bureaus and prototype production facilities, and to support scientific research and the training of personnel.

We are seeing that global competition is increasingly shifting to science, technology and education. Just recently, it seemed inconceivable that Russia could make not just a breakthrough but also a high-tech breakthrough in defence. This was difficult, complex work. Much had to be restored or started from scratch It was necessary to break new ground and find bold, unique solutions. Nevertheless, this was done. It was done by our engineers, workers and scientists, including very young people that grew up with these projects. Let me repeat that I know all the details of this large-scale effort and I am completely justified in saying, for instance, that the development of the Avangard strategic hypersonic glide vehicle is tantamount to the launching of the world's first artificial satellite. And not just in terms of enhancing the country’s defence capability and security, although this is the primary goal, but in influencing the consolidation of our scientific potential and the development of unique technological assets.

At one time, the nuclear defence project gave the country nuclear power. The construction of a missile shield that started with the launch of the world's first artificial satellite allowed the country to begin peaceful space exploration. Today, we need to use the personnel, knowledge, competences and materials we have acquired from developing the next generation of weapons to produce the same kind of results for civilian applications.

We have yet to implement new ambitious scientific and technological programmes. An Executive Order on genetic research has already been signed, and I propose launching a similar large-scale programme at the national level on artificial intelligence. In the middle of the next decade, we should be among the leaders in these science and technology areas, which, of course, will determine the future of the world and the future of Russia.

To implement such projects, we need to accelerate the development of an advanced scientific infrastructure. Incidentally, the reactor PIK, a mega-science class research unit was recently launched in Leningrad Region. Over the next 20 years, it will be one of the world’s most powerful sources for neutron research, enabling scientists to conduct unique research in physics, biology, and chemistry, and to develop new drugs, diagnostic tools, and new materials.

For the first time in decades, Russian shipyards will break ground for several modern research vessels capable of working in all strategic areas, including the Arctic seas and the Antarctic, exploring the shelf and the natural resources of the World Ocean.

To promote powerful technological development, we need to build a modern research and development model. This is why we are setting up research and education centres in the regions that will integrate all levels of education with the potential of research facilities and business. Within three years, centres like this should be established in 15 regions in the Russian Federation, the first five this year. Three of them – in Tyumen and Belgorod Regions and Perm Territory – are close to completion and are to open this year.

We need specialists capable of working at advanced production facilities, developing and applying breakthrough technology solutions. Therefore, we need to ensure a broad introduction of updated curricula at all levels of professional education, to organise personnel training for the industries that are still being formed.

At the end of August, Russia will host the WorldSkills world championships – so let us wish our team success. Their success is significant for increasing the prestige of the skilled labor occupation. Relying on the WorldSkills movement experience, we will accelerate the modernisation of secondary vocational education, which includes installing modern equipment at more than 2,000 shops in colleges and technical schools by 2022.

Passion for a future career and creativity is formed at a young age. In the next three years, thanks to the development of children’s technology parks, quantoriums and education centres for computer skills, natural sciences and the humanities, around one million new spots in extracurricular education programmes will be created. All children must have access.

The Sirius educational centre in Sochi is becoming a true constellation. The plan was for centres supporting gifted children, based on its model, to open in all regions by 2024. But our colleagues said they can finish this work early, within two years. Such proactive efforts deserve praise.

I think every national project has reserves for increasing the pace. I expect that our companies and the business community will get involved in such projects as Ticket to the Future that provides school pupils in their sixth year and above with the opportunity to discover their career interests and intern at actual companies, research centres and other places.

I want to speak directly to our young people. Your talents, energy and creative abilities are among Russia’s strongest competitive advantages. We understand and greatly value this. We have created an entire system of projects and personal growth competitions in which every young person, from school to university age, can show what they are made of. These include ProeKTOriYA, My First Business, I Am A Professional, Russian Leaders and many others. I want to stress that all this is being created for young people to take advantage of these opportunities. I urge you to take a chance and use them, be bold, realise your dreams and plans, do something of value for yourself, your family and your country.

Colleagues, Russia has been and always will be a sovereign and independent state. This is a given. It will either be that, or will simply cease to exist. We must clearly understand this. Without sovereignty, Russia cannot be a state. Some countries can do this, but not Russia.

Building relations with Russia means working together to find solutions to the most complex matters instead of trying to impose solutions. We make no secret of our foreign policy priorities. These include strengthening trust, countering global threats, promoting cooperation in the economy and trade, education, culture, science and technology, as well as facilitating people-to-people contact. These tenets underpin our work within the UN, the Commonwealth of Independent States, as well as within the Group of 20, BRICS and the Shanghai Cooperation Organisation.

We believe in the importance of promoting closer cooperation within the Union State of Russia and Belarus, including close foreign policy and economic coordination. Together with our integration partners within the Eurasian Economic Union, we will continue creating common markets and outreach efforts. This includes implementing the decisions to coordinate the activities of the EAEU with China’s Belt and Road initiative on the way to a greater Eurasian partnership.

Russia’s equal and mutually beneficial relations with China currently serve as an important factor of stability in international affairs and in terms of Eurasian security, offering a model of productive economic cooperation. Russia attaches importance to realising the potential of the special privileged strategic partnership with India. We will continue to promote political dialogue and economic cooperation with Japan. Russia stands ready to work with Japan on finding mutually acceptable terms for signing a peace treaty. We intend to promote deeper ties with the Association of Southeast Asian Nations.

We also hope that the European Union and the major European countries will finally take actual steps to put political and economic relations with Russia back on track. People in these countries are looking forward to cooperation with Russia, which includes corporations, as well as small and medium-sized enterprises, and European businesses in general. It goes without saying that this would serve our common interests.

The unilateral withdrawal of the USA from the INF Treaty is the most urgent and most discussed issue in Russian-American relations. This is why I am compelled to talk about it in more detail. Indeed, serious changes have taken place in the world since the Treaty was signed in 1987. Many countries have developed and continue to develop these weapons, but not Russia or the USA – we have limited ourselves in this respect, of our own free will. Understandably, this state of affairs raises questions. Our American partners should have just said so honestly rather than make far-fetched accusations against Russia to justify their unilateral withdrawal from the Treaty.

It would have been better if they had done what they did in 2002 when they walked away from the ABM Treaty and did so openly and honestly. Whether that was good or bad is another matter. I think it was bad, but they did it and that is that. They should have done the same thing this time, too. What are they doing in reality? First, they violate everything, then they look for excuses and appoint a guilty party. But they are also mobilising their satellites that are cautious but still make noises in support of the USA. At first, the Americans began developing and using medium-range missiles, calling them discretionary “target missiles” for missile defence. Then they began deploying Mk-41 universal launch systems that can make offensive combat use of Tomahawk medium-range cruise missiles possible.

I am talking about this and using my time and yours because we have to respond to the accusations that are leveled at us. But having done everything I have just described, the Americans openly and blatantly ignored the provisions envisaged by articles 4 and 6 of the INF Treaty. According to Item 1, Article VI (I am quoting): “Each Party shall eliminate all intermediate-range missiles and the launchers of such missiles… so that… no such missiles, launchers… shall be possessed by either party.” Paragraph 1 of Article VI provides that (and I quote) “upon entry into force of the Treaty and thereafter, neither Party may produce or flight-test any intermediate-range missile, or produce any stages or launchers of such missiles.” End of quote.

Using medium-range target missiles and deploying launchers in Romania and Poland that are fit for launching Tomahawk cruise missiles, the US has openly violated these clauses of the Treaty. They did this some time ago. These launchers are already stationed in Romania and nothing happens. It seems that nothing is happening. This is even strange. This is not at all strange for us, but people should be able to see and understand it.

How are we evaluating the situation in this context? I have already said this and I want to repeat: Russia does not intend – this is very important, I am repeating this on purpose – Russia does not intend to deploy such missiles in Europe first. If they really are built and delivered to the European continent, and the United States has plans for this, at least we have not heard otherwise, it will dramatically exacerbate the international security situation, and create a serious threat to Russia, because some of these missiles can reach Moscow in just 10–12 minutes. This is a very serious threat to us. In this case, we will be forced, I would like to emphasise this, we will be forced to respond with mirror or asymmetric actions. What does this mean?

I am saying this directly and openly now, so that no one can blame us later, so that it will be clear to everyone in advance what is being said here. Russia will be forced to create and deploy weapons that can be used not only in the areas we are directly threatened from, but also in areas that contain decision-making centres for the missile systems threatening us.

What is important in this regard? There is some new information. These weapons will fully correspond to the threats directed against Russia in their technical specifications, including flight times to these decision-making centres.

We know how to do this and will implement these plans immediately, as soon as the threats to us become real. I do not think we need any further, irresponsible exacerbation of the current international situation. We do not want this.

What would I like to add? Our American colleagues have already tried to gain absolute military superiority with their global missile defence project. They need to stop deluding themselves. Our response will always be efficient and effective.

The work on promising prototypes and weapon systems that I spoke about in my Address last year continues as scheduled and without disruptions. We have launched serial production of the Avangard system, which I have already mentioned today. As planned, this year, the first regiment of the Strategic Missile Troops will be equipped with Avangard. The Sarmat super-heavy intercontinental missile of unprecedented power is undergoing a series of tests. The Peresvet laser weapon and the aviation systems equipped with Kinzhal hypersonic ballistic missiles proved their unique characteristics during test and combat alert missions while the personnel learned how to operate them. Next December, all the Peresvet missiles supplied to the Armed Forces will be put on standby alert. We will continue expanding the infrastructure for the MiG-31 interceptors carrying Kinzhal missiles. The Burevestnik nuclear-powered cruise missile of unlimited range and the Poseidon nuclear-powered unmanned underwater vehicle of unlimited range are successfully undergoing tests.

In this context, I would like to make an important statement. We did not announce it before, but today we can say that as soon as this spring the first nuclear-powered submarine carrying this unmanned vehicle will be launched. The work is going as planned.

Today I also think I can officially inform you about another promising innovation. As you may remember, last time I said we had more to show but it was a little early for that. So I will reveal little by little what else we have up our sleeves. Another promising innovation, which is successfully being developed according to plan, is Tsirkon, a hypersonic missile that can reach speeds of approximately Mach 9 and strike a target more than 1,000 km away both under water and on the ground. It can be launched from water, from surface vessels and from submarines, including those that were developed and built for carrying Kalibr high-precision missiles, which means it comes at no additional cost for us.

On a related note, I want to highlight that for the defence of Russia’s national interests, two or three years ahead of the schedule set by the state arms programme, the Russian Navy will receive seven new multipurpose submarines, and construction will begin on five surface vessels designed for the open ocean. Sixteen more vessels of this class will enter service in the Russian Navy by 2027.

To conclude, on the unilateral withdrawal by the USA from the Treaty on the Elimination of Intermediate-Range and Shorter-Range Missiles, here is what I would like to say. The US policy toward Russia in recent years can hardly be called friendly. Russia’s legitimate interests are being ignored, there is constant anti-Russia campaigning, and more and more sanctions, which are illegal in terms of international law, are imposed without any reason whatsoever. Let me emphasise that we did nothing to provoke these sanctions. The international security architecture that took shape over the past decades is being completely and unilaterally dismantled, all while referring to Russia as almost the main threat to the USA.

Let me say outright that this is not true. Russia wants to have sound, equal and friendly relations with the USA. Russia is not threatening anyone, and all we do in terms of security is simply a response, which means that our actions are defensive. We are not interested in confrontation and we do not want it, especially with a global power like the United States of America. However, it seems that our partners fail to notice the depth and pace of change around the world and where it is headed. They continue with their destructive and clearly misguided policy. This hardly meets the interests of the USA itself. But this is not for us to decide.

We can see that we are dealing with proactive and talented people, but within the elite, there are also many people who have excessive faith in their exceptionalism and supremacy over the rest of the world. Of course, it is their right to think what they want. But can they count? Probably they can. So let them calculate the range and speed of our future arms systems. This is all we are asking: just do the maths first and take decisions that create additional serious threats to our country afterwards. It goes without saying that these decisions will prompt Russia to respond in order to ensure its security in a reliable and unconditional manner.

I have already said this, and I will repeat that we are ready to engage in disarmament talks, but we will not knock on a locked door anymore. We will wait until our partners are ready and become aware of the need for dialogue on this matter.

We continue developing our Armed Forces and improving the intensity and quality of combat training, in part, using the experience we gained in the anti-terrorist operation in Syria. Much experience was gained by practically all the commanders of the Ground Forces, by covert operations forces and military police, warship crews, army, tactical, and strategic and military transport aviation.

I would like to emphasise again that we need peace for sustainable long-term development. Our efforts to enhance our defence capability are for only one purpose: to ensure the security of this country and our citizens so that nobody would even consider pressuring us, or launching an aggression against us.

Colleagues, we are facing ambitious goals. We are approaching solutions in a systematic and consistent way, building a model of socio-economic development that will allow us to ensure the best conditions for the self-fulfillment of our people and, hence, provide befitting answers to the challenges of a rapidly changing world, and preserve Russia as a civilisation with its own identity, rooted in centuries-long traditions and the culture of our people, our values and customs. Naturally, we will only be able to achieve our goals by pooling our efforts, together in a united society, if all of us, all citizens of Russia, are willing to succeed in specific endeavours.

Such solidarity in striving for change is always the deliberate choice of the people themselves. They make this choice when they understand that national development depends on them, on the results of their labour, when a desire to be needed and useful enjoys support, when everyone finds a job by vocation one is happy with, and most importantly, when there is justice and a vast space for freedom and equal opportunity for work, study, initiative and innovation.

These parameters for development breakthroughs cannot be translated into figures or indicators, but it is these things – a unified society, people being involved in the affairs of their country, and a common confidence in our power – that play the main role in reaching success. And we will achieve this success by any means necessary.

Thank you for your attention.

The National Anthem of the Russian Federation is played.

Presidential Address to the Federal Assembly

2018-03-14T15:18:44+04:00

The President of Russia delivered the Address to the Federal Assembly. The ceremony took place at the Manezh Central Exhibition Hall.

The presentation of the Address was attended by Federation Council members, State Duma deputies, members of the Government, leaders of the Constitutional Court and Supreme Court, governors, speakers of the legislatures of the constituent entities of the Russian Federation, the leaders of traditional religions, public figures, including the heads of regional civic chambers, as well as the leaders of major media outlets.

* * *

President of Russia Vladimir Putin: Citizens of Russia, members of the Federation Council and State Duma,

Today’s Address is a very special landmark event, just as the times we are living in, when the choices we make and every step we take are set to shape the future of our country for decades to come.

It is at such turning points that Russia has proven, time and again, its ability to develop and renew itself, discover new territories, build cities, conquer space and make major discoveries. This unwavering forward-looking drive, coupled with traditions and values, ensured the continuity in the thousand-year-long history of our nation.

We have gone through major challenging transformations, and were able to overcome new and extremely complex economic and social challenges, preserved the unity of our country, built a democratic society and set it on the path to freedom and independence.

We ensured sustainability and stability in almost all areas of life, which is critical for a huge and multi-ethnic country like ours with its complex federative structure and diversity of cultures, with historical divides that are still alive in people’s memory and major challenges Russia had to face over the course of its history.

However, sustainability is the foundation of development but not its guarantee. We have no right to allow a situation when the stability that has been achieved would lead to complacency, all the more so as many problems remain unresolved.

Today, Russia ranks among the world’s leading nations with a powerful foreign economic and defence potential. But we have not yet reached the required level in the context of accomplishing our highly important task and guaranteeing people’s quality of life and prosperity. But we must do this, and we will do this.

As I said in the past, the state’s role and positions in the modern world are not determined only or predominantly by natural resources or production capacities; the decisive role is played by the people, as well as conditions for every individual’s development, self-assertion and creativity. Therefore, everything hinges on efforts to preserve the people of Russia and to guarantee the prosperity of our citizens We must achieve a decisive breakthrough in this area.

I repeat, a solid foundation has been created for this. Therefore, we can now set and accomplish new tasks. We already have substantial experience in implementing ambitious programmes and social projects. The Russian economy has proved its resilience, and the current stable macro-economic situation opens up new opportunities for surging ahead and maintaining long-term growth.

Finally, the world is now accumulating a tremendous technological potential making it possible to achieve a real breakthrough in improving the people’s quality of life and modernising the economy, the infrastructure and state governance and administration. How effectively we will able to use the colossal potentialities of the technological revolution, and how we will respond to its challenges depends on us alone. In this sense, the next few years will prove decisive for the country’s future. I reiterate, these years will be decisive.

I will tell you why. What I will say now has no connection to the domestic political cycle or even the presidential election. No matter who is elected President, each Russian citizen and all of us together must be able to see what is going on in the world, what is happening around us, and what challenges we are facing.

The speed of technological progress is accelerating sharply. It is rising dramatically. Those who manage to ride this technological wave will surge far ahead. Those who fail to do this will be submerged and drown in this wave.

Technological lag and dependence translate into reduced security and economic opportunities of the country and, ultimately, the loss of its sovereignty. This is the way things stand now. The lag inevitably weakens and erodes the human potential. Because new jobs, modern companies and an attractive life will develop in other, more successful countries where educated and talented young people will go, thereby draining the society’s vital powers and development energy.

As I have said, changes concern the entire civilization, and the sheer scale of these changes calls for an equally powerful response. We are ready to provide it. We are ready for a genuine breakthrough.

My confidence is based on the results we have achieved together, even though they may seem modest at first glance, as well as on the unity of Russian society and, most importantly, on the huge potential of Russia and our talented and ingenious people.

In order to move forward and to develop dynamically, we must expand freedom in all spheres, strengthen democratic institutions, local governments, civil society institutions and courts, and also open the country to the world and to new ideas and initiatives.

It is high time we take a number of tough decisions that are long overdue. We need to get rid of anything that stands in the way of our development and prevents people from fully unleashing their potential. It is our obligation to focus all resources and summon all our strength and willpower in this daring effort that must yield results.

Otherwise, there will be no future for us, our children or our country. It is not a question of someone conquering or devastating our land. No, that is not the danger. The main threat and our main enemy is the fact that we are falling behind. If we are unable to reverse this trend, we will fall even further behind. This is like a serious chronic disease that steadily saps the energy from the body and destroys it from within step by step. Quite often, this destructive process goes unnoticed by the body.

We need to master creative power and boost development so that no obstacles prevent us from moving forward with confidence and independently. We must take ownership of our destiny.

Colleagues,

What should be our priority? Let me reiterate that I believe that the main, key development factor is the well-being of the people and the prosperity of Russian families.

Let me remind you that in 2000, 42 million people lived below the poverty line, which amounted to nearly 30 percent – 29 percent of the population. In 2012, this indicator fell to 10 percent.

Poverty has increased slightly against the backdrop of the economic crisis. Today, 20 million Russian nationals live in poverty. Of course, this is much fewer than the 42 million people in 2000, but it is still way too many. There are even working people who have to live very modest lives.

For the first time in our recent history, the minimum wage was equated with the subsistence level. This provision will come into force on May 1, 2018, and will benefit about 4 million people. This is an important step but it still falls short of offering a fundamental solution.

We need to upgrade the employment structure that has become inefficient and archaic, provide good jobs that motivate people, improve their well-being and help them uncover their talents. We need to create decent well-paid jobs. This would help deliver on one of the key objectives for the next decade, which is to guarantee sustained long-term real income growth, and to reduce the poverty rate by at least one half over the next six years.

It is our moral duty to provide all-round support to members of the older generation, who have made a tremendous contribution to national development. Senior citizens must have worthy conditions for a long, active and healthy life. Most importantly, we must raise pensions and index them regularly, so that they outpace inflation. We will also strive to reduce the gap between the size of pensions and pre-retirement wages. And, of course, we must raise the quality of healthcare and social support for senior citizens and help people who are alone and those facing problems in life.

We need to address all these issues using a comprehensive approach. As I see it, the future new Government will have to draft a special programme for the systematic support of senior citizens and for improving their quality of life.

We consider every person important and valuable. People need to know that they are needed, and they must live a long and healthy life and enjoy their grandchildren and great-grandchildren. They need to see their children grow up and become successful in a powerful, rapidly developing and successful country that is attaining new development levels.

Russia must firmly assert itself among the five largest global economies, and its per-capita GDP must increase by 50 percent by the middle of the next decade. This is a very difficult task. I am confident that we are ready to accomplish it.

Of course, life expectancy is a highly important fundamental parameter for gauging the well-being of citizens and the country. In 2000, Russia posted a life expectancy of just over 65 years, with men’s life expectancy falling below 60 years. This is not just low, it is a tragedy, and this parameter is tragically inadequate.

In the past few years, Russia has been posting a major increase in average life expectancy levels, which is among the highest in the world. We have managed to accomplish this task. Life expectancy levels have increased by over seven years and now total 73 years. But, of course, this is not enough either. Today, we must set an entirely new goal. By the end of the next decade, Russia must confidently join the club of countries posting a life expectancy of 80-plus years, which includes Japan, France and Germany.

At the same time, life expectancy levels for people living a healthy, active and full life, when they are not hampered and pinned down by illness, must grow faster than planned. I am confident that we can achieve this goal, considering the positive trends of the previous years. For this purpose, the whole of Russia will have to make a quantum leap in its development, so that the life of every person is transformed.

Colleagues,

We need to create a modern living environment and transform cities and villages across the country. In doing so, we must make sure that they preserve their identity and historical heritage. We already have positive experience in renovating the urban environment and infrastructure. Let me elaborate on this point. Cities like Kazan, Vladivostok and Sochi have already benefited from upgrades of this kind. Change is underway in many regional capitals and smaller cities. Overall, we now know how to do it.

I propose launching a large-scale spatial development programme in Russia, which would include developing cities and other communities by at least doubling spending in this area over the next six years.

It is obvious that the effort to develop cities and other communities goes hand in hand with the need to overcome challenges in other areas, including healthcare, education, environment and transport. Initiatives in all these segments will require additional funding. I will talk about this matter further in my Address.

Urban renovation should be supported by the introduction of state-of-the-art construction technology and materials, modern architectural solutions, digital technology for social services, transport and utilities sectors. Among other things, this would make the housing and utilities sector more transparent and efficient, so that people receive quality services at a reasonable cost.

This large-scale project brings the promise of better economic and social development prospects, a modern living environment, and a favourable climate for cultural and civil initiatives, for small businesses and start-ups. All this would facilitate the emergence of a large and creative middle class in Russia.

Of course, a lot will depend on municipal and local authorities and whether they will be receptive to new ideas. The ability to respond to the diverse needs of various generations, including families with children, retirees and people with disabilities, will also be instrumental. People must have a decisive say in the future of their cities and villages. We have discussed this many times, including at meetings with heads of municipalities. Today, I am not saying it just to check the box. I ask you to bring it to the attention of decision-makers at all levels.

It is important that the development of cities becomes the driving force for the whole country. Russia is a country with a vast territory, and its active, dynamic life cannot be concentrated in several metropolitan cities. Big cities must distribute their energy, and serve as a support for the balanced, harmonious spatial development of the whole of Russia.

Therefore, there is an urgent need for an appropriate modern infrastructure. I will return to this later. However, it is obvious that developed utilities is what will enable residents of small towns and villages to take advantage of all the opportunities and modern services that are available in big cities, and smaller towns will be closely integrated into Russia’s single social and economic space. At the same time, we will support initiatives that will help our small towns and villages to preserve their cultural identity, to re-discover their unique potential in a new way.

Particular attention will be paid to the social and infrastructural development of rural areas. Russian agriculture has already become a globally competitive industry. Therefore, people who work for this success should live a comfortable and modern life.

Colleagues,

I understand how important it is for everyone, for every family, to have their own house, their own home. I know this is the problem of problems in Russia. It lingers from decade to decade. How many times governments promised and tried, sincerely tried to resolve it. But we can and must do it now.

In 2017, three million families in Russia improved their living conditions. Now we need to reach a stable level (I emphasise this: it is the first time in the history of modern Russia) – to a level where at least five million families improve their housing conditions annually. This is a difficult task – to jump from three million to five. We reached 3.1 million last year, but we need to make it five. Yet, it is an attainable goal.

I see three key factors for increasing the affordability of housing. The first is the growth of people’s incomes. I have spoken about this in the past, and we must ensure this. Next, a decrease in mortgage interest rates and, of course, an increased supply in the housing market.

I would like to remind you of something that few people remember, which is that only 4,000 mortgage loans were issued in 2001. Only 4,000. The interest rate was as high as 30 percent, including on foreign currency loans. By the way, half of the mortgage loans were issued in foreign currency. Few people could afford to take out mortgage loans then. Last year, the number of mortgage loans almost reached one million. In December, the average interest rate on ruble loans for the first time decreased to below 10 percent.

We know, of course, that loan terms are individual and may differ from one borrower to another. But we must continue to lower the average interest rate to 7–8 percent. We held long discussions on the figure I should say here. I am sure that the target figure should be 7 percent. In the next six years, mortgage loans must become accessible to the majority of Russian families, working people and young professionals.

Here are some more figures. In the 1950s through 1970s, we annually built approximately 60 million square metres of housing a year. The figure rose to 70 million by the late 1990s. Now we annually build around 80 million square metres of housing every year. We built even more housing in some years, but the average figure is 80 million. We must move forward and reach new heights in this sphere, that is, increase the volume of housing built every year from 80 million to 120 million square metres. This is an ambitious but realistic goal, given new technologies, the experience our construction companies have accumulated, as well as new materials. The rise from 80 to 120 million square metres is what we need and can achieve. I will tell you why: if we want 5 million families to receive new housing every year, we must reach the figure of 120 million square metres.

Those who invest their money in housing projects must be securely protected. We should gradually proceed from unit construction to project financing, when developers and banks, but not people, shoulder the risks.

I also propose revising the personal property tax. It must be fair and affordable.

Some people, including those in this hall, tried to convince me that this tax should be based on the market value of property. They told me that using obsolete valuation by the Technical Inventory Bureau is an anachronism. But it turned out in reality that cadastral value, which should be comparable to market value, often exceeded it by far. This was not the agreement. And the people did not expect this from us.

We must revise the mechanism for calculating the tax and also the calculation of the cadastral value of property. One way or another, it must not exceed the real market value. All decisions regarding this must be taken without delay in the first six months of this year.

Colleagues,

We must penetrate the whole country with advanced communications to develop cities, towns, to enhance business activity and to meld together Russia’s entire territory.

The Crimean Bridge will open to cars in just a few months and to trains next year. This will stimulate the development of Crimea and the entire Russian Black Sea region.

We have overhauled federal roads. Now we must modernise regional and local routes. I am not going to talk about the figures now, but I know them. It is a fact that federal roads have mostly been renovated. The situation is somewhat worse with regional roads, and it is completely unacceptable with local roads. I address this to regional and city heads: you must constantly focus your attention on the roads. You must improve the quality of road construction using advanced technology and solutions, infrastructure mortgage loans and life cycle contracts.

Of course, another critical task is to improve safety on the roads and to decrease the mortality rate in road accidents to the minimum.

Overall, in the next six years, we must almost double the spending on road construction and repairs in Russia and to allocate more than 11 trillion roubles for this from all sources. This is a lot; keep in mind that we have allocated 6.4 trillion rubles in 2012–2017, but we need 11 trillion.

Large Eurasian transport corridors will also be developing. An automobile road that will become part of the Europe – Asia-Pacific corridor is already under construction. Our Chinese and Kazakhstani partners involved in this project together with us have already completed their part. Their sections have already been opened, so we need to speed up our work.

The throughput capability of the Baikal-Amur Mainline and the Trans-Siberian Railway will grow 1.5 times, up to 180 million tonnes, in six years. It will take seven days for containers from Vladivostok to reach the western borders of Russia. This is just one of the infrastructure projects that will bring quick economic returns. It includes freight, so all investment will be paid off very quickly and will contribute to these regions’ development.

The volume of transit shipments on our railways must grow almost fourfold. This means that Russia will become a global leader in transit shipping between Europe and Asia.

In 1990, the ports of the Soviet Union had an aggregate capacity of 600 million tonnes, but after the country broke apart, we lost almost half. In the early 2000s, Russian ports could handle only 300 million tonnes. Over the last 17 years, this figure has tripled. In early 2017, the aggregate port capacity in Russia exceeded 1 billion tonnes for the first time in history. As you can see from the charts, this exceeds the level reached by the Soviet Union by more than two thirds. By the way, these are the figures for early 2017, and the capacity currently stands at 1,025 billion tonnes.

We need to further expand this capacity, including by increasing the capacity of railway links to ports in the Azov and Black Sea basin 1.5-fold to 131 million tonnes.

The Northern Sea Route will be the key to developing the Russian Arctic and Far East. By 2025, cargo traffic along this route will surge tenfold to 80 million tonnes. Our goal is to make it a truly global and competitive transport route. Let me remind you that the Northern Sea Route was used more actively in Soviet times compared to how we have been using it so far. We will definitely develop this route and reach new horizons. I have no doubt about it.

We will continue our proactive policy to attract investment and create social and economic growth centres in Russia’s Far East. We will create all the conditions to ensure a people-friendly living environment, so that people move to this region and its population grows.

A number of large-scale industrial projects have been launched in the Arctic. They comply with the highest environmental standards. We are strengthening the research, transport, navigation and military infrastructure, which is expected to guarantee Russia’s interests in this strategic region. Russia builds cutting-edge nuclear icebreakers. We have had the most powerful icebreaker fleet in the world, and this will remain so.

We will renovate and expand the network of regional airports across Russia. In six years, half of the regions will be connected between each other by direct flights. The situation where you had to make a connection in Moscow when flying to a neighbouring region will become a thing of the past. We are already working on this. This includes efforts to develop aviation and airports.

The Spatial Development Strategy will serve as a foundation for preparing a comprehensive plan to modernise and expand the backbone traffic infrastructure. I believe this to be a priority for the future Government.

Russia must not just become the world’s key logistics and transport hub, but also, which is very important, a global centre for the storage, processing, transfer and reliable protection of large volumes of information, so-called big data.

Overall, infrastructure development must take into account global technological changes. In other words, the projects we are now considering must include practical solutions for combining infrastructure with drones and digital marine and air navigation, as well as use AI to streamline logistics.

Likewise, we must introduce new technologies for the generation, storage and relay of energy. In the next six years, we plan to attract some 1.5 trillion rubles in private investment for modernising our power generation sector. All power systems throughout the country must convert to digital technology. We must use the so-called distributed generation method to supply electricity to remote areas.

By 2024, high-speed internet will be available throughout the country. We will complete the construction of fibre optic lines in the majority of populated areas with a population of more than 250 people. Small remote towns in the Extreme North, Siberia and the Russian Far East will access internet via a network of Russian satellites.

We will use advanced telecommunications to give our people access to the digital world. As we know, this is more than just modern services, online education and telemedicine, although all this is very important. More than that, people will be able to use digital space to conduct research, organise volunteer and project groups or run companies. In our vast country, this combination of talent, competencies and ideas amounts to a huge ground-breaking resource.

Colleagues,

A crucial task facing every one of us is to make advanced high-quality healthcare widely accessible. We must be guided by the highest international standards in this area.

In 2019–2024, we need to spend over 4 percent of the GDP each year to develop the healthcare system. At the same time, the goal we must bear in mind is 5 percent. In absolute terms, this means that healthcare spending must double. In addition, we must find new funding opportunities that would not limit economic growth.

I would like to thank doctors, paramedics and nurses for their difficult and highly necessary work. A great deal depends on these people, as well as on teachers, counsellors and cultural workers, and they must receive decent salaries.

We have done a lot to implement the 2012 May executive orders. I must say that there were several failures, but overall, despite the demanding targets of these orders, without them we would not have had the results we can see today. We must always set ambitious tasks.

We must not lose the positions we have already attained. I am referring to the level of wages. Wages in the public sector must continue growing, as well as the quality of work and skills of the people working in healthcare, education and other areas that define people’s wellbeing.

In recent years, we have optimised the hospital network in the country. This was done in order to build an effective healthcare system. However, in some case, I have to say this today, too many administrative changes were introduced: hospitals in small towns and villages have been closed. No one proposed an alternative, and people were left with practically no medical aid. The only advice they were given was, “Go to the city to get treatment there.” I must say that this is unacceptable. They forgot about the main thing: the people, their interests and needs, equal opportunities and justice.

This must not happen in healthcare or any other area. We must provide, or restore where necessary, easy access to primary healthcare. We can do this, but we should have done this from the very beginning, when we started the reforms.

This must be done as quickly as possible. In the period from 2018 to 2020, we must ensure that each small town with a population of 100 to 2,000 people has a paramedic station and an outpatient clinic. For villages with less than 100 people – we also have villages as small as that – we will organise mobile medical units, all-terrain vehicles with all the necessary diagnostic equipment.

These projects should be closely monitored. I consider them extremely important. And I also ask the Russian Popular Front to stay in contact with people, to keep an eye on the situation on the ground. At the same time, outpatient clinics and paramedic stations, regional healthcare facilities and leading medical centres should be linked into a single digital network so that the entire national healthcare system is involved in helping each person.

Disease prevention is a vitally important task. In the 1990s, this work was largely neglected. We began to restore it. We need to provide all people with a real opportunity to have a complete physical at least once a year. This is also important for encouraging a responsible attitude to one's own health.

Modern diagnostics will reduce mortality among the working age population, and consolidate the positive trends in treating cardiovascular disorders. We can see these positive trends, which is very good. But we also need to fight other threats such as cancer.

Colleagues, I think that practically every one of us has relatives or friends or friends of friends afflicted with this disease – cancer. I propose to implement a special national cancer programme, to involve scientists and the national pharmaceutical industry, to modernise oncological centres, to build a modern system from early diagnosis to timely effective treatment that will protect people. We have positive experience in this area. We must reach the cutting-edge, the highest level of all the key indicators that show the effectiveness of cancer care – experts should know what they are.

Colleagues,

Medical assistance alone is not enough to protect public health. We must also ensure high standards of environmental safety across Russia.

A long a healthy life is hard to achieve when millions of people drink substandard water, when we see black snow, as it happened in Krasnoyarsk, and when people in large industrial centres such as Cherepovets, Nizhny Tagil, Chelyabinsk or Novokuznetsk do not see the sun for weeks on end.

We have tightened environmental requirements for companies, which should reduce industrial pollution. Starting in 2019, 300 industrial enterprises with a negative impact on the environment must convert to the best available environmentally friendly technology, and all enterprises in the high environmental risk group must do this starting in 2021.

We had a go at this problem many times, and every time our companies complained about the difficulties involved. There is no going back now. I want everyone to know that we will not delay this programme any longer.

We also need to modernise our thermal power plants, boiler houses and utility services, build bypass routes to ease transit traffic congestion in large cities, as well as use low-impact public service vehicles. The authorities and public volunteers have reported some 22,000 landfill sites. We must address this problem as a priority, starting with the removal and reclamation of landfill sites within city limits.

We must seriously improve the quality of drinking water. In some small towns, water is only available for several hours a day. We must use defence industry technologies to settle these problems.

We will launch conservation projects for the unique natural systems of Lake Baikal and Lake Teletskoye, as well as the entire Volga Basin, which will help improve living conditions for nearly half of Russia’s population.

We will establish 24 new nature reserves and natural parks. They should be open for ecotourism, which is important for encouraging a caring and responsible attitude to nature.

Colleagues,

The year 2018 in Russia has been declared the Year of Volunteers. It is highly symbolic that the year started with the adoption of a law whereby authorities at all levels were tasked with assisting volunteers. Today, proactive and concerned citizens and socially-minded NPOs contribute to addressing crucial issues. It is the involvement of the people in national affairs and their civic engagement, as well as cultural, moral and spiritual values that make us a single people capable of achieving ambitious goals.

It is essential that we preserve our identity in the era of major technological shifts. In this regard, culture has a key role to play as a national civilisational code that can unlock the human creative potential.

I propose launching a programme to establish cultural, educational and museum complexes in the regions. They will offer concert venues, drama, music and dance schools and other creative institutions, as well as exhibition spaces where the country’s leading museums can display their treasures. Why store so many works of art in museum warehouses? I am talking about centres of culture that would be open to young people and people of all ages. The first project of this kind will be carried out in Vladivostok, and other regions and cities across Russia will be selected at a later time.

Colleagues, our children want to see a forward-looking Russia. You can find many sincere reflections along these lines in school essays. Having bold dreams always helps if you are seeking to achieve an ambitious goal. We must help every child discover his or her talent and help them live up to their potential. The future of Russia is in its classrooms. Schools must respond to the current challenges in order for the country to do the same.

International experts agree that Russia has one of the best primary school systems in the world. We will keep up our proactive efforts to develop general education at all levels. Let me emphasise that every child should have access to a quality education. Equal educational opportunities are a powerful driver in terms of promoting national development and social justice.

We need to shift to completely new education methods, including personalised learning, in order to cultivate in our children a readiness for change and creative curiosity, and teach them to work in teams, which is very important in the modern world, and other life skills applicable to the digital era. We will absolutely support talented teachers who are motivated to pursue continuous professional growth. And, of course, we need to build an open and modern system for school management selection and training. School administrators are the ones in charge of building a strong faculty and productive morale.

We will continue to enhance the comprehensive system to support and develop our children’s creative skills and talents. This system must extend to the entire country and incorporate the resources of such projects as Sirius and Quantorium, as well as extracurricular education centres and children’s creative centres all over Russia.

We need to build a modern career guidance system where schools partner with universities, research groups and successful companies. I propose starting a new early career guidance programme for schoolchildren, Ticket to the Future, from the next academic year. The programme will allow kids to try out real jobs in major Russian companies. We will allocate 1 billion rubles for this project this year alone.

I believe mentorship is another important aspect to improve. Only by bringing together advanced knowledge and moral foundations, by ensuring a true partnership and mutual understanding between generations can we become stronger.

Colleagues, today knowledge, technology and expertise make the most important competitive advantages. They are the key to a real breakthrough and improved quality of life.

As soon as possible, we need to develop a progressive legal framework and eliminate all barriers for the development and wide use of robotic equipment, artificial intelligence, unmanned vehicles, e-commerce and Big Data processing technology. And this legal framework must be continuously reviewed and be based on a flexible approach to each area and technology.

We have all the resources to promptly implement 5G and Internet of Things technologies.

We need to build our own digital platforms. It goes without saying that they should be compatible with the global information space. This would pave the way to reorganising manufacturing processes, financial services and logistics, including using blockchain technology, which is very important when it comes to financial transactions, property rights, etc. These initiatives have real-world application.

We need to start making or localising key technologies and solutions, including those used in developing the Arctic and the sea shelf, and building new energy, transport and urban infrastructure systems. This is also important in areas related to improving the quality of life, such as cutting-edge rehabilitation tools for people with disabilities.

It is our duty to support high-technology companies, offer start-ups a favourable environment and introduce new industrial solutions. I am talking about a user-friendly infrastructure, taxation systems, technical regulations and venture financing.

Technological development should be firmly rooted in fundamental research. Over the recent years, we have been able to expand research, and are now leading in a number of areas. The Russian Academy of Sciences and Russia’s leading research institutions made a major contribution to achieving this.

Building on the advances made in the preceding years, including in developing the research infrastructure, we need to take our research to a new level. Projects to build cutting-edge mega science research facilities are already underway in Gatchina and Dubna. The Council for Science and Education has adopted a decision recently to build a powerful synchrotron collider at the Novosibirsk Akademgorodok and a new generation collider in Protvino, Moscow Region.

With these facilities, Russia will become one of the world’s leading countries in terms of the capability and performance of its research infrastructure. These units will give a serious competitive edge to Russian research teams and high-technology companies, for example for developing new medications, materials and microelectronics.

Of course, this infrastructure and ambitious research projects will not fail to attract our compatriots and researchers from abroad. In this regard, we need to create a legal framework that would enable international research teams to operate in Russia.

Large research and education centres should begin working to full capacity. They will integrate the possibilities of universities, academic institutions, and high-tech companies. Such centres are already being set up in Kazan and Samara, Tomsk and Novosibirsk, Yekaterinburg and Tyumen, Vladivostok and Kaliningrad, and other cities.

It is important to focus them on the implementation of major interdisciplinary projects, including in such a promising field as genome research. A cardinal breakthrough in this area will pave the way to developing new methods for diagnosing, preventing and treating many diseases, and will expand the selection possibilities in agriculture.

We need to reinforce the superiority of the national mathematics school. It gives Russia a strong competitive edge in the age of digital economy. International mathematics centres will also provide platforms for such work. These are already operating in Kazan and Novosibirsk. Following the adopted decisions, we will open more in St Petersburg, Moscow and Sochi.

Young Russians are already proving their leadership in science and in other areas. Last year, Russian schoolchildren won 38 medals at international academic competitions. Our teams triumphantly won the Olympiad in natural sciences and robotics, the WorldSkills competition, and our students showed the best results in programming for the twelfth time.

Based on the best practices and experience, we need to quickly modernise the vocational education system, achieve qualitative changes in the training of students, especially in the advanced areas of technological development, to establish the ‘applied bachelor’ level in those vocational professions that actually require an engineering degree, and also to organise centres for advanced professional retraining and professional growth.

I also propose creating the most convenient and attractive conditions for talented young people from other countries to enrol at our universities. They already come to study here. But we also need to create conditions for the best foreign graduates of our universities to work in Russia. This fully applies to foreign scientists and qualified specialists.

I think we need to seriously improve the procedure for granting Russian citizenship. The focus should be on the foreign nationals Russia needs: on young, healthy and well-educated people. For them, we need to create a simplified system for obtaining Russian citizenship.

Colleagues,

To ensure breakthrough development and upgrade education, healthcare and the quality of the urban environment and infrastructure, it will be necessary to allocate considerable additional funds in the next six years for these purposes.

Question: at what expense? Where do we get these funds? First of all, it is essential to clearly prioritise these tasks and enhance the efficiency of government spending. It is necessary to involve private companies more actively in funding major projects. The future Government will have to establish new taxation rules as soon as possible. They should be stable and fixed for the next few years.

Let me emphasise that we need such fiscal solutions that would ensure budget revenues at all levels and guarantee the implementation of all social commitments. Importantly, they should encourage rather than impede economic growth. It is the build-up of economic potential of the country and each of its regions that is the main source of additional resources. To achieve this, our economic growth rates should exceed those of the world’s. This is a difficult task but not instance case of wishful thinking. This is a fundamental condition for a breakthrough in resolving social, infrastructure, defence and other tasks. The new Government should set itself the goal of reaching such growth rates as its key guideline.

In the last few years, we have enhanced the sustainability of our economy. The dependence of the economy on hydrocarbon prices has been substantially reduced. We have increased our gold and currency reserves. Inflation has dropped to a record low level – just over two percent. Of course, we all understand that the growth of prices for many basic necessities is much higher. This should be strictly monitored by different agencies, including the Anti-Monopoly Service. But on the whole, this low inflation level creates additional opportunities for development. Let me remind you that quite recently, in 2015, inflation was almost 13 percent – 12.9 percent to be exact.

In effect, Russia has formed a new macroeconomic reality with low inflation and general economic sustainability. For the people this is a condition for real income growth and cheaper mortgage loans. For entrepreneurs it means predictability in business and cheaper loans. Business should also adapt to these new macroeconomic conditions. Finally, it makes it possible to attract long-term loans and private investment into large-scale infrastructure projects.

Now we have an opportunity, without speeding up inflation, and maintaining a careful and responsible approach, to gradually cut interest rates and make loans more affordable. I count on the support of the Bank of Russia in that, while making its decisions, implementing monetary policy measures and developing financial markets, it will work in contact with the Government in the interests of the common goal of creating a proper environment for increasing the economic growth rates.

In order to further change the national economy structure and improve its competitiveness, it is imperative to use the sources of growth at a fundamentally different level. Where are they? First of all, it is important to increase labour productivity on a new technological, managerial and personnel basis. We are still lagging noticeably behind in terms of this indicator.

It is necessary to ensure that labour productivity in medium-sized and large enterprises of basic industries, such as manufacturing, construction, transport, agriculture and trade, grows at a rate of at least 5 percent per year, which will allow us to reach the level of the leading world economies by the end of the next decade.

I want to emphasise that increasing productivity is also about higher wages and, hence, increased consumer demand. In turn, this constitutes an additional driver for economic growth.

All our actions should push companies to produce technically complex products and to implement more efficient technologies. It is necessary to make an inventory of subsidies and other instruments for direct support of industries, and to target them on making competitive goods.

Increased investment is the second source of growth. We have already set the task of bringing it up to 25 percent of the GDP, and then to 27 percent. Unfortunately, this goal has not been achieved yet. To ensure sustainable growth, we need to do so at all costs. I hope that the new Government in conjunction with the Bank of Russia will present a concrete plan of action in this area.

Investment should be primarily used for upgrading and technologically re-equipping the industries and retrofitting the manufacturing industry. We need to ensure the highest dynamics here, to reach a level where, on average, every second enterprise within a year carries out technological changes. That is when the renewal effort in the economy and industry will be noticeable.

Promoting small businesses is the third large-scale reserve of economic growth. By the middle of the next decade, their contribution to the country's GDP should approach 40 percent, and the number of employed there should grow from 19 million to 25 million people.

One of the main problems facing entrepreneurs is access to financial resources. There is a government programme in place for small production businesses that offers loans with only 6.5 percent interest. I think this programme must continue. Overall, this support mechanism must become widely available.

Finally, another source of growth is the development of non-resource exports. It is necessary to remove all administrative barriers and create the most favourable conditions for the companies entering foreign markets.

Within the next six years, we must double the amount of non-resource and non-energy exports to reach $250 billion – specifically, increase machine engineering exports to $50 billion. Exports of services, including education, healthcare, tourism and transport, must reach $100 billion per year.

In the early 2000s, we were deeply dependent on food imports. The situation has turned around completely. Now we are on the verge of more changes. In just four years from now, we plan to be supplying more food to global markets than we will be importing from abroad. We need to increase exports of meat and high-added value products, as well as to make the country more self-sufficient in beef, milk and vegetable supplies.

I want to stress that development of the agricultural industry is strongly related to commodity production. However, this development must not be at the expense of small farms and their workers. We must support family businesses and farmers. We will develop cooperative agriculture and create conditions for residents of rural areas to increase their income. Every now and then we hear about problems with people’s interests being affected, I am aware of them. Such cases must be taken very seriously.

Nevertheless, I want to say thank you to the agricultural industry workers for the record-breaking harvest of 134 million tonnes. Note that it is more than the record harvest in the Soviet Union. In 1978, the USSR produced 127.4 million tonnes. Now it is common for Russia to exceed 100 million tonnes.

Clearly, such a large harvest has a downside as well. The prices have gone down; there are some storage and transport issues. We have established discount rates on transporting crops by railway until July 1, 2018, to support our producers.

It is necessary to consider extending this measure to the next harvesting seasons as well as to arrange additional deliveries to the Urals, Siberia and the regions far away from ports. We must help those who want and can process crops locally. Added value needs to be increased. Then we can go into the livestock industry with this product. We will certainly discuss these and other problems reported by agricultural workers at the agricultural producers’ forum in March, and will elaborate on additional measures to support the industry.

Colleagues,

In order for the economy to operate at its full capacity, we need to radically improve the business climate and guarantee entrepreneurial freedom and competition.

Let me highlight a fundamental point in this regard. The state must gradually reduce its share in the economy. In this connection, it has to be noted that the state has taken over a number of financial assets in an effort to revive the banking sector. These initiatives are headed in the right direction and have my support. That said, these assets should be put on the market and sold without delay.

We need to get rid of everything that enables corrupt officials and law enforcement officers to pressure businesses. The Criminal Code should not serve as a tool for settling corporate disputes. These should be referred to administrative and arbitration courts.

I ask the Working Group on Monitoring and Analysing Law Enforcement Practice in Entrepreneurial Activity, together with the Supreme Court, law enforcement agencies, the Prosecutor’s Office and representatives of the business community to draft specific proposals on this subject. This matter should not be approached in a light-minded manner. All the proposals must undergo careful examination and approval, and this should be done as soon as possible.

At the same time, criminal law should be strictly enforced in the case of offences infringing upon the interests of citizens or society or violating economic freedoms. I am referring to offences against property and assets held by citizens, illegal takeovers, competition law violations, tax evasion and embezzlement of public funds.

I would now like to move on to another important subject. While the number of various inspections seems to be declining, during meetings with businesses I often hear that radical change has yet to materialise. The presence of inspectors at enterprises should become the exception, and be limited to high-risk facilities. Otherwise, remote monitoring methods can be used. The entire control and oversight system should move to a risk-oriented approach within two years. Let me remind you that the relevant legislative framework is already in place.

It is important to support start-up entrepreneurs, to help people take the first step, so that they can open their own businesses with just one click, make the compulsory payments, receive services and loans online.

Sole proprietors and self-employed individuals who use digital services, generally need to be freed from reporting, and allowed to pay taxes via a simple transaction in automatic mode. As for businesses that use cash register equipment, their tax reporting needs to be simplified. You know, this is just a routine issue, at first glance, but this tedious routine is what prevents us from moving forward vigorously. We need to do everything to clean out this space. I will add that the intensive introduction of digital technologies and platforms will allow us to make consistent progress towards greater transparency and away from shadow economy.

Now I would like to address all representatives of Russian business, those who run their own small business, a family enterprise or a farm, an innovative company or a large industrial enterprise. I know, I know we still have a lot to do. And I assure you, we will do everything to give our entrepreneurs new opportunities to expand production, to open businesses and to create modern jobs. But at the same time I expect that Russian business will increase its contribution to the country's breakthrough development, and respect for entrepreneurial work in society will grow. It is very important.

Colleagues, we need to build modern services for business, but this is not all; the system for interaction between the state and society, between the state and the people should be clear and understandable, convenient and comfortable.

We have already set up a network of multifunctional centres. A person anywhere in the country can now use public services as a one-stop-shop. Allow me to remind you that it was a special programme which we have developed and implemented.

We need to move forward, to ensure the provision of virtually all public services in real time via remote services within six years. All document circulation between state agencies should be digitised, which is important both for the state agencies and for citizens, so as not to browse the Internet for hours looking for information. It will be possible to get everything in one place. I will add that digitalisation of the entire public administration system and its greater transparency is also a powerful factor in fighting corruption.

Government officials of all levels should be interested in improving their efficiency and be strictly focused on obtaining concrete results. By the way, we are always talking about corruption and officials. I have to say, and I do not have the right to not say this: the vast majority of our public servants are honest, decent and goal-oriented people. However, what I said will help everyone, including government officials and users of government services. This line of thinking should be used to rebuild the public service system, where appropriate, and to introduce project work methods.

Of course, it is necessary to ensure the advancement of modern professional personnel in the government and municipal service, business, the economy, science and industry, in all spheres.

As you may be aware, the first Leaders of Russia competition took place, and a number of other projects are being implemented to support young workers, entrepreneurs, innovators, volunteers, schoolchildren and students. They brought together hundreds of thousands of young people from all regions, and became an important step in their lives and professional careers.

I want to emphasise: for all those who want to work, show themselves, and are ready to honestly serve the Fatherland and the people, and to succeed, Russia will always be a country of opportunity. This is the guarantee of our successful development and confident movement forward.

All the projects and the priorities that I mentioned today, such as spatial development, investment in infrastructure, education, healthcare, the environment, innovative technologies and research, measures to support the economy, to promote talent, the youth, all of this is designed to work for one strategic task – Russia’s breakthrough development.

At the same time, we cannot forget about reliably ensuring its security.

Colleagues,

The operation in Syria has proved the increased capabilities of the Russian Armed Forces. In recent years, a great deal has been done to improve the Army and the Navy. The Armed Forces now have 3.7 times more modern weapons. Over 300 new units of equipment were put into service. The strategic missile troops received 80 new intercontinental ballistic missiles, 102 submarine-launched ballistic missiles and three Borei nuclear-powered ballistic missile submarines. Twelve missile regiments have received the new Yars intercontinental ballistic missile. The number of long-range high-precision weapons carriers has increased by 12 times, while the number of guided cruise missiles increased by over 30 times. The Army, the Aerospace Forces and the Navy have grown significant stronger as well.

Both Russia and the entire world know the names of our newest planes, submarines, anti-aircraft weapons, as well as land-based, airborne and sea-based guided missile systems. All of them are cutting-edge, high-tech weapons. A solid radar field to warn of a missile attack was created along Russia’s perimeter (it is very important). Huge holes appeared after the USSR disintegrated. All of them were repaired.

A leap forward was made in the development of unmanned aircraft; the National Defence Control Centre was established; and the operational command of the far maritime zone was formed. The number of professional service members has increased by 2.4 times, and the availability of equipment in the Armed Forces grew from 70 percent to 95–100 percent. The years-long queue for permanent housing was eliminated, and the waiting period was cut by 83 percent.

Now, on to the most important defence issue.

I will speak about the newest systems of Russian strategic weapons that we are creating in response to the unilateral withdrawal of the United States of America from the Anti-Ballistic Missile Treaty and the practical deployment of their missile defence systems both in the US and beyond their national borders.

I would like to make a short journey into the recent past.

Back in 2000, the US announced its withdrawal from the Anti-Ballistic Missile Treaty. Russia was categorically against this. We saw the Soviet-US ABM Treaty signed in 1972 as the cornerstone of the international security system. Under this treaty, the parties had the right to deploy ballistic missile defence systems only in one of its regions. Russia deployed these systems around Moscow, and the US around its Grand Forks land-based ICBM base.

Together with the Strategic Arms Reduction Treaty, the ABM Treaty not only created an atmosphere of trust but also prevented either party from recklessly using nuclear weapons, which would have endangered humankind, because the limited number of ballistic missile defence systems made the potential aggressor vulnerable to a response strike.

We did our best to dissuade the Americans from withdrawing from the treaty. All in vain. The US pulled out of the treaty in 2002. Even after that we tried to develop constructive dialogue with the Americans. We proposed working together in this area to ease concerns and maintain the atmosphere of trust. At one point, I thought that a compromise was possible, but this was not to be. All our proposals, absolutely all of them, were rejected. And then we said that we would have to improve our modern strike systems to protect our security. In reply, the US said that it is not creating a global BMD system against Russia, which is free to do as it pleases, and that the US will presume that our actions are not spearheaded against the US.

The reasons behind this position are obvious. After the collapse of the USSR, Russia, which was known as the Soviet Union or Soviet Russia abroad, lost 23.8 percent of its national territory, 48.5 percent of its population, 41 of the GDP, 39.4 percent of its industrial potential (nearly half of our potential, I would underscore), as well as 44.6 percent of its military capability due to the division of the Soviet Armed Forces among the former Soviet republics. The military equipment of the Russian army was becoming obsolete, and the Armed Forces were in a sorry state. A civil war was raging in the Caucasus, and US inspectors oversaw the operation of our leading uranium enrichment plants.

For a certain time, the question was not whether we would be able to develop a strategic weapon system – some wondered if our country would even be able to safely store and maintain the nuclear weapons that we inherited after the collapse of the USSR. Russia had outstanding debts, its economy could not function without loans from the IMF and the World Bank; the social sphere was impossible to sustain.

Apparently, our partners got the impression that it was impossible in the foreseeable historical perspective for our country to revive its economy, industry, defence industry and Armed Forces to levels supporting the necessary strategic potential. And if that is the case, there is no point in reckoning with Russia’s opinion, it is necessary to further pursue ultimate unilateral military advantage in order to dictate the terms in every sphere in the future.

Basically, this position, this logic, judging from the realities of that period, is understandable, and we ourselves are to blame. All these years, the entire 15 years since the withdrawal of the United States from the Anti-Ballistic Missile Treaty, we have consistently tried to reengage the American side in serious discussions, in reaching agreements in the sphere of strategic stability.

We managed to accomplish some of these goals. In 2010, Russia and the US signed the New START treaty, containing measures for the further reduction and limitation of strategic offensive arms. However, in light of the plans to build a global anti-ballistic missile system, which are still being carried out today, all agreements signed within the framework of New START are now gradually being devaluated, because while the number of carriers and weapons is being reduced, one of the parties, namely, the US, is permitting constant, uncontrolled growth of the number of anti-ballistic missiles, improving their quality, and creating new missile launching areas. If we do not do something, eventually this will result in the complete devaluation of Russia’s nuclear potential. Meaning that all of our missiles could simply be intercepted.

Despite our numerous protests and pleas, the American machine has been set into motion, the conveyer belt is moving forward. There are new missile defence systems installed in Alaska and California; as a result of NATO’s expansion to the east, two new missile defence areas were created in Western Europe: one has already been created in Romania, while the deployment of the system in Poland is now almost complete. Their range will keep increasing; new launching areas are to be created in Japan and South Korea. The US global missile defence system also includes five cruisers and 30 destroyers, which, as far as we know, have been deployed to regions in close proximity to Russia’s borders. I am not exaggerating in the least; and this work proceeds apace.

So, what have we done, apart from protesting and warning? How will Russia respond to this challenge? This is how.

During all these years since the unilateral US withdrawal from the ABM Treaty, we have been working intensively on advanced equipment and arms, which allowed us to make a breakthrough in developing new models of strategic weapons.

Let me recall that the United States is creating a global missile defence system primarily for countering strategic arms that follow ballistic trajectories. These weapons form the backbone of our nuclear deterrence forces, just as of other members of the nuclear club.

As such, Russia has developed, and works continuously to perfect, highly effective but modestly priced systems to overcome missile defence. They are installed on all of our intercontinental ballistic missile complexes.

In addition, we have embarked on the development of the next generation of missiles. For example, the Defence Ministry and enterprises of the missile and aerospace industry are in the active phase of testing a new missile system with a heavy intercontinental missile. We called it Sarmat.

Sarmat will replace the Voevoda system made in the USSR. Its immense power was universally recognized. Our foreign colleagues even gave it a fairly threatening name.

That said, the capabilities of the Sarmat missile are much higher. Weighing over 200 tonnes, it has a short boost phase, which makes it more difficult to intercept for missile defence systems. The range of the new heavy missile, the number and power of its combat blocs is bigger than Voevoda’s. Sarmat will be equipped with a broad range of powerful nuclear warheads, including hypersonic, and the most modern means of evading missile defence. The high degree of protection of missile launchers and significant energy capabilities the system offers will make it possible to use it in any conditions.

Could you please show the video.

(Video plays.)

Voevoda’s range is 11,000 km while Sarmat has practically no range restrictions.

As the video clips show, it can attack targets both via the North and South poles.

Sarmat is a formidable missile and, owing to its characteristics, is untroubled by even the most advanced missile defence systems.

But we did not stop at that. We started to develop new types of strategic arms that do not use ballistic trajectories at all when moving toward a target and, therefore, missile defence systems are useless against them, absolutely pointless.

Allow me to elaborate on these weapons.

Russia’s advanced arms are based on the cutting-edge, unique achievements of our scientists, designers and engineers. One of them is a small-scale heavy-duty nuclear energy unit that can be installed in a missile like our latest X-101 air-launched missile or the American Tomahawk missile – a similar type but with a range dozens of times longer, dozens, basically an unlimited range. It is a low-flying stealth missile carrying a nuclear warhead, with almost an unlimited range, unpredictable trajectory and ability to bypass interception boundaries. It is invincible against all existing and prospective missile defence and counter-air defence systems. I will repeat this several times today.

In late 2017, Russia successfully launched its latest nuclear-powered missile at the Central training ground. During its flight, the nuclear-powered engine reached its design capacity and provided the necessary propulsion.

Now that the missile launch and ground tests were successful, we can begin developing a completely new type of weapon, a strategic nuclear weapons system with a nuclear-powered missile.

Roll the video, please.

(Video plays.)

You can see how the missile bypasses interceptors. As the range is unlimited, the missile can manoeuvre for as long as necessary.

As you no doubt understand, no other country has developed anything like this. There will be something similar one day but by that time our guys will have come up with something even better.

Now, we all know that the design and development of unmanned weapon systems is another common trend in the world. As concerns Russia, we have developed unmanned submersible vehicles that can move at great depths (I would say extreme depths) intercontinentally, at a speed multiple times higher than the speed of submarines, cutting-edge torpedoes and all kinds of surface vessels, including some of the fastest. It is really fantastic. They are quiet, highly manoeuvrable and have hardly any vulnerabilities for the enemy to exploit. There is simply nothing in the world capable of withstanding them.

Unmanned underwater vehicles can carry either conventional or nuclear warheads, which enables them to engage various targets, including aircraft groups, coastal fortifications and infrastructure.

In December 2017, an innovative nuclear power unit for this unmanned underwater vehicle completed a test cycle that lasted many years. The nuclear power unit is unique for its small size while offering an amazing power-weight ratio. It is a hundred times smaller than the units that power modern submarines, but is still more powerful and can switch into combat mode, that is to say, reach maximum capacity, 200 times faster.

The tests that were conducted enabled us to begin developing a new type of strategic weapon that would carry massive nuclear ordnance.

Please play the video.

(Video plays.)

By the way, we have yet to choose names for these two new strategic weapons, the global-range cruise missile and the unmanned underwater vehicle. We are waiting for suggestions from the Defence Ministry.

Countries with high research potential and advanced technology are known to be actively developing so-called hypersonic weapons. The speed of sound is usually measured in Mach numbers in honour of Austrian scientist Ernst Mach who is known for his research in this field. One Mach is equal to 1,062 kilometres per hour at an altitude of 11 kilometres. The speed of sound is Mach 1, speeds between Mach 1 and Mach 5 is called supersonic, and hypersonic is above Mach 5. Of course, this kind of weapon provides substantial advantages in an armed conflict. Military experts believe that it would be extremely powerful, and that its speed makes it invulnerable to current missile and air defence systems, since interceptor missiles are, simply put, not fast enough. In this regard, it is quite understandable why the leading armies of the world seek to possess such an ideal weapon.

Friends, Russia already has such a weapon.

The most important stage in the development of modern weapons systems was the creation of a high-precision hypersonic aircraft missile system; as you already know for sure, it is the only one of its kind in the world. Its tests have been successfully completed, and, moreover, on December 1 of last year, these systems began their trial service at the airfields of the Southern Military District.

The unique flight characteristics of the high-speed carrier aircraft allow the missile to be delivered to the point of discharge within minutes. The missile flying at a hypersonic speed, 10 times faster than the speed of sound, can also manoeuvre at all phases of its flight trajectory, which also allows it to overcome all existing and, I think, prospective anti-aircraft and anti-missile defence systems, delivering nuclear and conventional warheads in a range of over 2,000 kilometres. We called this system Kinzhal (Dagger).

Video, please.

(Video plays.)

But this is not all I have to say.

A real technological breakthrough is the development of a strategic missile system with fundamentally new combat equipment – a gliding wing unit, which has also been successfully tested.

I will say once again what we have repeatedly told our American and European partners who are NATO members: we will make the necessary efforts to neutralise the threats posed by the deployment of the US global missile defence system. We mentioned this during talks, and even said it publicly. Back in 2004, after the exercises of the strategic nuclear forces when the system was tested for the first time, I said the following at a meeting with the press (It is embarrassing to quote myself, but it is the right thing to say here):

So, I said: “As other countries increase the number and quality of their arms and military potential, Russia will also need to ensure it has new generation weapons and technology.

In this respect, I am pleased to inform you that successfully completed experiments during these exercises enable us to confirm that in the near future, the Russian Armed Forces, the Strategic Missile Forces, will receive new hypersonic-speed, high-precision new weapons systems that can hit targets at inter-continental distance and can adjust their altitude and course as they travel. This is a very significant statement because no country in the world as of now has such arms in their military arsenal.” End of quote.

Of course, every word has a meaning because we are talking about the possibility of bypassing interception boundaries. Why did we do all this? Why did we talk about it? As you can see, we made no secret of our plans and spoke openly about them, primarily to encourage our partners to hold talks. Let me repeat, this was in 2004. It is actually surprising that despite all the problems with the economy, finances and the defence industry, Russia has remained a major nuclear power. No, nobody really wanted to talk to us about the core of the problem, and nobody wanted to listen to us. So listen now.

Unlike existing types of combat equipment, this system is capable of intercontinental flight at supersonic speeds in excess of Mach 20.

As I said in 2004, in moving to its target, the missile’s gliding cruise bloc engages in intensive manoeuvring – both lateral (by several thousand km) and vertical. This is what makes it absolutely invulnerable to any air or missile defence system. The use of new composite materials has made it possible to enable the gliding cruise bloc to make a long-distance guided flight practically in conditions of plasma formation. It flies to its target like a meteorite, like a ball of fire. The temperature on its surface reaches 1,600–2,000 degrees Celsius but the cruise bloc is reliably guided.

Play the video, please.

(Video plays).

For obvious reasons we cannot show the outer appearance of this system here. This is still very important. I hope everyone understands this. But let me assure you that we have all this and it is working well. Moreover, Russian industrial enterprises have embarked on the development of another new type of strategic weapon. We called it the Avangard.

We are well aware that a number of other countries are developing advanced weapons with new physical properties. We have every reason to believe that we are one step ahead there as well – at any rate, in the most essential areas.

We have achieved significant progress in laser weapons. It is not just a concept or a plan any more. It is not even in the early production stages. Since last year, our troops have been armed with laser weapons.

I do not want to reveal more details. It is not the time yet. But experts will understand that with such weaponry, Russia’s defence capacity has multiplied.

Here is another short video.

(Video plays.)

Those interested in military equipment are welcome to suggest a name for this new weaponry, this cutting-edge system.

Of course, we will be refining this state-of-the-art technology. Obviously, there is far more in development than I have mentioned today. But this is enough for now.

I want to specifically emphasise that the newly developed strategic arms – in fact, new types of strategic weapons – are not the result of something left over from the Soviet Union. Of course, we relied on some ideas from our ingenious predecessors. But everything I have described today is the result of the last several years, the product of dozens of research organisations, design bureaus and institutes.

Thousands, literally thousands of our experts, outstanding scientists, designers, engineers, passionate and talented workers have been working for years, quietly, humbly, selflessly, with total dedication. There are many young professionals among them. They are our true heroes, along with our military personnel who demonstrated the best qualities of the Russian army in combat. I want to address each of them right now and say that there will absolutely be awards, prizes and honorary titles but, because I have met many of you in person many times, I know you are not after awards. The most important thing is to reliably ensure the security of our country and our people. As President and on behalf of the Russian people, I want to say thank you very much for your hard work and its results. Our country needs them so much.

As I have already said, all future military products are based on remarkable advances that can, should and will be used in high-technology civilian sectors. I would like to stress that only a country with the highest level of fundamental research and education, developed research, technology, industrial infrastructure and human resources can successfully develop unique and complex weapons of this kind. You can see that Russia has all these resources.

We will expand this potential and focus on delivering on the ambitious goals our country has set itself in terms of economic, social and infrastructure development. Effective defence will serve as a guarantee of Russia’s long-term development.

Let me reiterate that each of the armament systems I referred to is uniquely important. Even more importantly, taken together all these advances enable the Defence Ministry and General Staff to develop a comprehensive defence system, in which every piece of new military equipment will be assigned a proper role. On top of strategic weapons that are currently on combat alert and benefit from regular updates, Russia will have a defence capability that would guarantee its security in the long term.

Of course, there are many things that we have to do in terms of military construction, but one thing is already clear: Russia possesses a modern, high-technology army that is quite compact given the size of the territory, centred on the officer corps, who are dedicated to their country and are ready to sacrifice anything for its people. Sooner or later, other armies will also have the technology, the weapons, even the most advanced ones. But this does not worry us, since we already have it and will have even better armaments in the future. What matters is that they will never have people or officers like the Russian pilot Major Roman Filipov.

I hope that everything that was said today would make any potential aggressor think twice, since unfriendly steps against Russia such as deploying missile defences and bringing NATO infrastructure closer to the Russian border become ineffective in military terms and entail unjustified costs, making them useless for those promoting these initiatives.

It was our duty to inform our partners of what I said here today under the international commitments Russia had subscribed to. When the time comes, foreign and defence ministry experts will have many opportunities to discuss all these matters with them, if of course our partners so desire.

For my part, I should note that we have conducted the work to reinforce Russia's defence capability within the current arms control agreements; we are not violating anything. I should specifically say that Russia's growing military strength is not a threat to anyone; we have never had any plans to use this potential for offensive, let alone aggressive goals.

We are not threatening anyone, not going to attack anyone or take away anything from anyone with the threat of weapons. We do not need anything. Just the opposite. I deem it necessary to emphasise (and it is very important) that Russia's growing military power is a solid guarantee of global peace as this power preserves and will preserve strategic parity and the balance of forces in the world, which, as is known, have been and remain a key factor of international security after WWII and up to the present day.

And to those who in the past 15 years have tried to accelerate an arms race and seek unilateral advantage against Russia, have introduced restrictions and sanctions that are illegal from the standpoint of international law aiming to restrain our nation's development, including in the military area, I will say this: everything you have tried to prevent through such a policy has already happened. No one has managed to restrain Russia.

Now we have to be aware of this reality and be sure that everything I have said today is not a bluff ‒ and it is not a bluff, believe me ‒ and to give it a thought and dismiss those who live in the past and are unable to look into the future, to stop rocking the boat we are all in and which is called the Earth.

In this connection, I would like to note the following. We are greatly concerned by certain provisions of the revised nuclear posture review, which expand the opportunities for reducing and reduce the threshold for the use of nuclear arms. Behind closed doors, one may say anything to calm down anyone, but we read what is written. And what is written is that this strategy can be put into action in response to conventional arms attacks and even to a cyber-threat.

I should note that our military doctrine says Russia reserves the right to use nuclear weapons solely in response to a nuclear attack, or an attack with other weapons of mass destruction against the country or its allies, or an act of aggression against us with the use of conventional weapons that threaten the very existence of the state. This all is very clear and specific.

As such, I see it is my duty to announce the following. Any use of nuclear weapons against Russia or its allies, weapons of short, medium or any range at all, will be considered as a nuclear attack on this country. Retaliation will be immediate, with all the attendant consequences.

There should be no doubt about this whatsoever. There is no need to create more threats to the world. Instead, let us sit down at the negotiating table and devise together a new and relevant system of international security and sustainable development for human civilisation. We have been saying this all along. All these proposals are still valid. Russia is ready for this.

Our policies will never be based on claims to exceptionalism. We protect our interests and respect the interests of other countries. We observe international law and believe in the inviolable central role of the UN. These are the principles and approaches that allow us to build strong, friendly and equal relations with the absolute majority of countries.

Our comprehensive strategic partnership with the People’s Republic of China is one example. Russia and India also enjoy a special privileged strategic relationship. Our relations with many other countries in the world are entering a new dynamic stage.

Russia is widely involved in international organisations. With our partners, we are advancing such associations and groups as the CSTO, the Shanghai Cooperation Organisation and BRICS. We are promoting a positive agenda at the UN, G20 and APEC. We are interested in normal and constructive cooperation with the United States and the European Union. We hope that common sense will prevail and our partners will opt for honest and equal work together.

Even if our views clash on some issues, we still remain partners because we must work together to respond to the most complex challenges, ensure global security, and build the future world, which is becoming increasingly interconnected, with more and more dynamic integration processes.

Russia and its partners in the Eurasian Economic Union seek to make it a globally competitive integration group. The EAEU’s agenda includes building a common market for electricity, oil, petroleum products and gas, harmonising financial markets, and linking our customs authorities. We will also continue to work on a greater Eurasian partnership.

Colleagues, this is a turning period for the entire world and those who are willing and able to change, those who are taking action and moving forward will take the lead. Russia and its people have expressed this will at every defining moment in our history. In just 30 years, we have undergone changes that took centuries in other countries.

We will continue to confidently chart our own course, just as we always have. We will stick together, as we always have. Our unity is the most durable foundation for future progress. In the coming years, it is our goal to further strengthen this unity so that we are one team that understands that change is necessary and is ready to devote its energy, knowledge, experience and talent to achieving common goals.

Challenges and big goals give special meaning to our lives. We must be bold in our plans and actions, take responsibility and initiative, and grow stronger, which means being of use to our families, children, the whole country; changing the world and our country for the better; and creating the Russia that we all dream about. Only then will the next decade and the entire 21^st century undoubtedly be an age of outstanding triumphs for Russia and our shared success. I believe it will be so.

Thank you.

Presidential Address to the Federal Assembly

2016-12-07T12:44:06+04:00

Vladimir Putin delivered the Annual Presidential Address to the Federal Assembly. The Address was traditionally delivered at the Kremlin’s St George Hall.

President of Russia Vladimir Putin: Good afternoon colleagues, members of the Federation Council, State Duma deputies, citizens of Russia,

Today, as usual in these annual addresses, I will speak about our tasks in the economy, the social sector, domestic and foreign policy. This year’s address will focus particularly on the economy, social issues, and domestic policy.

We have to address all of these different matters in complicated and highly unusual conditions, which is not a unique event in our history. The people of Russia have shown convincingly once again that they can rise to the difficult challenges and protect and defend their national interests, sovereignty, and independent course.

Colleagues, I have already said publicly on other occasions what I want to say today, but let me say it again now.

Our people have united around patriotic values. We see this unity and we should thank them for it. They have united around these values not because everyone is happy and they have no demands, on the contrary, there is no shortage of problems and difficulties. But people have an understanding of their causes and, most importantly, are confident that together we can overcome these problems. It is this readiness to work for our country’s sake and this sincere and deep-seated concern for Russia that form the foundation of this unity we see.

People expect at the same time to have broad and equal opportunities for self-realisation and for making reality their business, creative, and civil initiatives. They expect respect for their person, their rights, freedoms, and labour.

The principles of justice, respect, and trust are universal. We are consistent in defending these principles on the international stage, and, as we see, not without result. But we must put the same effort into guaranteeing these principles here at home, with regard to every individual and to society as a whole.

People take any injustice and untruth very much to heart. This is a distinguishing feature of our culture in general. Our society resolutely rejects arrogance, conceit, insolence and selfishness, no matter in who they see it. Our people place greater value on qualities such as responsibility, high moral standards, concern for public interests, and readiness to listen to others and respect their opinion.

This was reflected in the election campaign that took place this year. As you know, I supported in my 2012 Address the idea of returning to a mixed model for elections to the State Duma. This was a principled step towards meeting public opinion’s demands.

I think that our course of developing the political system, the institutions of direct democracy, and of making elections more competitive is completely justified, and will certainly continue.

The State Duma has bolstered its role as a representative body and the legislative branch of power’s authority has strengthened in general. We must support and confirm this with concrete action. This concerns all political forces represented in the parliament.

United Russia, of course, bears particular responsibility here. Incidentally, the party is celebrating its 15^th anniversary at this time. United Russia has a constitutional majority in the State Duma and is the Government’s main support in the parliament. We must organise work together in such a way as to ensure that all promises and commitments made to our people are honoured.

Our people decided the election campaign’s result and chose the road of constructive development. They proved that we live in a healthy society that is confident in its fair and just demands, has ever stronger immunity against populism and demagogy, and values highly the importance of solidarity, closeness and unity.

I am not talking, of course, about any kind of dogmas or a false unity put on for show, and I am certainly not talking about imposing a particular world view. We have already gone through all of this in our history, as you know, and we have no intention of returning to the past.

But this does not mean that we can juggle eloquent words and use talk of freedom as a cover for insulting others’ feelings and national traditions.

The basis of our entire policy is to take care of people and increase human capital as Russia’s most important resource. Therefore, our efforts are aimed at supporting the traditional values and the family, at implementing demographic programmes, improving the environment and people’s health, and promoting education and culture.

Someone might consider themselves more progressive, intelligent and cleverer than someone else, but if this is the case, be respectful towards others, and this would be the natural thing to do.

At the same time, I think it is unacceptable to take an aggressive attitude in return, all the more so if it degenerates into vandalism and breaking the law. The state authorities will respond with firmness to such cases.

Tomorrow, the Council for Culture will meet, and we will certainly discuss these issues that provoke broad discussion, and will talk about the principles of mutual responsibility of civil society representatives and arts world figures.

But let me emphasise that whether in culture, politics, the mass media, public life, or in debates on economic issues, no one can ban freedom of thought and the freedom to openly express one’s position.

Let me say again that when we speak of solidarity and unity, what we mean is conscious and natural consolidation of our people in the interests of Russia’s successful development.

Is it possible to achieve major strategic goals in a fragmented society? Is it possible to resolve our tasks with a parliament that instead of productive work spends its time on competing ambitions and fruitless argument?

Can we develop successfully on the shaky foundation of a weak state and apathetic government controlled from abroad and that no longer has the people’s trust? The answer is clearly no.

In recent years, we have seen a number of countries where this kind of situation has opened the road to adventurists, coups, and ultimately, anarchy. Everywhere, the result is the same: human tragedies and victims, degradation and ruin, and disappointment.

It is worrying to see that around the world, even in the seemingly most prosperous countries and stable regions, we witness the emergence of an ever greater number of new divisions and conflicts on political, ethnic, religious and social lines.

Unlike some of our colleagues abroad, who consider Russia an adversary, we do not seek and never have sought enemies. We need friends. But we will not allow our interests to be infringed upon or ignored.

This is all unfolding against the background of the very serious migration crisis that countries in Europe and elsewhere face today. We know well the consequences that these great upheavals can bring. Unfortunately, our country went through many such upheavals and their consequences in the 20^th century.

Next year, 2017, will mark the 100^th anniversary of the February and October revolutions. This is a good moment for looking back on the causes and nature of these revolutions in Russia. Not just historians and scholars should do this; Russian society in general needs an objective, honest and deep-reaching analysis of these events.

This is our common history and we need to treat it with respect. This is something that the outstanding Russian and Soviet philosopher Alexei Losev wrote about. “We know the thorny road our country has travelled,” he wrote. “We know the long and tiring years of struggle, want and suffering, but for our homeland’s sons, this is all their native, inalienable heritage.”

I am sure that the vast majority of our people have precisely this attitude towards their homeland, and we need history’s lessons primarily for reconciliation and for strengthening the social, political and civil concord that we have managed to achieve.

It is unacceptable to drag the grudges, anger and bitterness of the past into our life today, and in pursuit of one’s own political and other interests to speculate on tragedies that concerned practically every family in Russia, no matter what side of the barricades our forebears were on. Let’s remember that we are a single people, a united people, and we have only one Russia.

Colleagues, the basis of our entire policy is to take care of people and increase human capital as Russia’s most important resource. Therefore, our efforts are aimed at supporting the traditional values and the family, at [implementing] demographic programmes, improving the environment and people’s health, and promoting education and culture.

You know, I cannot but say a few words about what is happening in reality, about what we have here and what we have achieved. The natural population growth continues.

In 2013 – the demographers have the term fertility rate – it was 1.7 in Russia, which is higher than in the majority of European countries. For example, it is 1.2 in Portugal, 1.3 in Spain and Greece, 1.4 in Austria, Germany and Italy, and 1.5 in the Czech Republic. These are 2013 figures. In 2015, the total fertility rate will be even higher in Russia – 1.78 – the rise is slight but it is still a rise.

We will continue to introduce changes in the social sphere so that the system meets more of people’s expectations and needs, and becomes more modern and just. The social spheres should attract skilled professionals and talented young people. That is why, we are raising specialists’ salaries and improving their working conditions.

Let me note that competition to enrol in medical and teacher training universities grows steadily (whereas not so long ago it was hovering around zero). In 2016, it was 7.8 persons for the teaching professions, and after the 2016 enrolment the general competition for state-financed openings was almost 28 applications per opening. God grant all of them – the young specialists – good health and success in their future pursuits.

I remember well how my colleagues and I discussed hi-tech medical aid projects and networks of perinatal centres, which we lacked at that time. In 2018, Russia will have 94 such centres.

Today our doctors save newborns in the most complicated cases. We have reached the level of the advanced countries in these indicators as well.

Back in 2015, Russia’s infant mortality indicators were 6.5 per 1,000 live births, whereas the European Region of the World Health Organisation had 6.6; this means that our [indicator] was slightly better. After 10 months in 2016, Russia reached the level of 5.9.

Our people have united around patriotic values not because everyone is happy and they have no demands, on the contrary, there is no shortage of problems and difficulties. But people have an understanding of their causes and, most importantly, are confident that together we can overcome these problems.

Over the past decade, the number of high-tech medical services has increased by a factor of 15. Hundreds of thousands of complex operations are performed not only at the leading federal centres but also at regional hospitals. While in 2005, when we launched the programme, 60,000 people in Russia received high-tech medical assistance, in 2016 the number will be 900,000. It is also essential to move forward. Still, compare: 60,000 and 900,000. Some difference.

Next year we will need to introduce mechanisms to ensure stable financing of high-tech assistance. This will make it possible to make it even more accessible and reduce waiting time for operations.

On the whole – to put it bluntly – problems in the healthcare sector remain and there are still plenty of them. They are related mostly to the primary care level. Its development should be given priority.

Patients are often confronted with waiting lines, a perfunctory attitude and indifference. Doctors are overworked and it is difficult to get an appointment with the required specialist. What often happens is that outpatient clinics are provided with the most modern equipment but medical specialists simply lack qualifications to use that equipment.

Starting next year, regular retraining programmes will be organised at federal and regional medical centres and universities. A specialist will now obtain an advanced training voucher and will be able to choose where to undergo training.

We will also continue to enhance the IT level of the public healthcare system to facilitate the procedure of scheduling doctor’s appointments and keeping records. It is important to free doctors from routine tasks, from the need to fill in bundles of reports and statements and give them more time for attending to patients.

Information technology will also be used to significantly tighten oversight over the market of vital medications. This will make it possible to get rid of counterfeit and illegal products and deal with inflated prices in the procurement of medications for hospitals and outpatient clinics.

Whether in culture, politics, the mass media, public life, or in debates on economic issues, no one can ban freedom of thought and the freedom to openly express one’s position.

I propose connecting all of our country’s hospitals and outpatient clinics to high-speed Internet over the next two years. This will enable doctors even in a remote town or village to use the advantages of telemedicine and quickly receive consultations from their colleagues at regional or federal clinics.

I would like to bring this to the attention of the Communications and Mass Media Ministry. The Minister has assured me that this task is absolutely realistic and feasible.

I just mentioned this in my Address, and the whole country will now follow the issue carefully.

Considering Russia’s geography, its vast expanses and certain poorly accessible areas, Russia needs a well-equipped air ambulance service. Next year, the air ambulance programme will cover 34 of the country’s regions, which will receive funding from the federal budget.

First of all, I am referring to Siberia, the North and the Far East. For this purpose (the parliament members should know this, as it was partly their initiative), in 2017, we will allocate 3.3 billion rubles to pay for aviation services as part of the air ambulance development project (the proposal should be adopted in the second reading).

Colleagues, in every corner of our great country, children have to be able to study in a pleasant, user-friendly, modern environment, so we will continue the programme for the reconstruction and renovation of schools. There will be no more rundown and dilapidated school buildings with no basic amenities.

It is necessary to finally resolve the problem of the third shift, and hopefully eliminate second shifts as well. We should certainly make extra effort to improve the qualifications of teachers. As you know, a programme is being implemented to expand the number of students served by educational institutions in 2016. This programme is planned for 2016−2025, with 25 billion roubles envisaged annually.

Incidentally, we all know that it is primarily the regions’ responsibility. However, we decided to support the regions in this important initiative. Overall, from 2016 to 2019, we plan to create 187,998 new openings for students in schools.

At the same time, the greatest concern for parents and teachers, and the general public as well is the content of the educational process and how well school education meets two basic goals that Academician Dmitry Likhachev listed: to give knowledge and to foster morality. He rightly believed that morality is the basis that determines the viability of society: its economic, public, and creative sustainability.

It is certainly important to preserve the depth and solidity of national education. Compositions have been returned to the school curriculum, and more attention is being paid to the humanities.

Yet, the hours of tuition according to the school curriculum will clearly not be enough here. We need projects in the theatre, cinema, television and museums, and on the Internet, that are of interest to young people, that attract the attention of young people to the national classical literature, culture and history.

Our schools must promote creativity. The children must learn to think independently, work both on their own and as part of a team, address unusual tasks and formulate and achieve goals, which will help them have an interesting and prosperous life.

Great many experiments have been held in Russian schools and abroad. We should consider experiments carefully, but we certainly must move forward. We must promote the culture of research and engineering work.

The number of cutting edge science parks for children will increase to 40 within two years. They will serve as the basis for the development of a network of technical project groups across the country. Companies, universities and research institutes should contribute to this, so that our children will see clearly that all of them have equal opportunities and an equal start in life, that Russia needs their ideas and knowledge and that they can prove their mettle in Russian companies and laboratories.

We can see the success of the Sirius educational centre for gifted children. I believe that we need a network of such centres, and I propose that the regional authorities consider creating centres for gifted children at their best universities and schools.

It is unacceptable to drag the grudges, anger and bitterness of the past into our life today. Let’s remember that we are a single people, a united people, and we have only one Russia.

At the same time, there are several things I would like to stress. Our education system must be based on the principle that all children and teenagers are gifted and can succeed in science, in creative areas and sport, in careers and in life. Our task is to help them develop their talents. When they are successful, Russia is successful too.

Colleagues, I view the young generation as Russia’s reliable foundation in a turbulent and complicated 21^st century. I believe that they are able not just to rise to challenges but also to make their contribution to the development of the intellectual, technological and cultural agenda of global development.

It is not surprising that so many students at schools and universities take part in volunteer projects in such vital areas as patient care, assistance to the seniors and people with disabilities, education, sport, culture, local history, search parties, and the protection of nature and animals.

It is a trait of our times that large numbers of people are now ready to contribute to all kinds of charity initiatives, such as petitions on social media and in the media to collect funds for treating the ill or helping children. Many people are quick to respond to such calls and do so sincerely without seeking to gain any profit.

Sometimes it is even surprising to see that people who do not make that much money have the urge to help those in need.

I ask the Civic Chamber and the Agency for Strategic Initiatives to become proactive in supporting volunteer organisations, charities and non-profits. Through their commitment and generosity, people who contribute to such projects promote collective efforts that Russia needs so much right now. They create significant social potential that must be used effectively.

It is necessary to remove all barriers that undermine the development of the volunteer movement, and also provide every assistance non-profit organisations might need. The key decisions in this respect have already been taken. Starting next year, non-profits with the required experience will be authorised to provide social services funded from the budget.

Colleagues, I would now like to call on many of you, and I want to be sure that governors and municipal authorities hear what I say. I ask you not to be, as they say, greedy, to refrain from working only with state-run institutions, and enable non-profit organisations to provide social services as much as possible. It is very important to establish cordial relations with people. I propose that we all keep an eye on these issues.

Over the past decade, the number of high-tech medical services has increased by a factor of 15. Hundreds of thousands of complex operations are performed not only at the leading federal centres but also at regional hospitals.

What we all want is to improve the quality of social services by engaging non-profits in this sphere. I instruct the Government and the Parliament to finalise efforts to devise a clear legal framework for non-profit organisations as providers of socially important services and establish requirements in terms of their competence, without creating additional red tape, of course. We must value the people’s demanding, engaged and proactive attitude in this respect.

I would like to once again address many of you with the appeal to not hide in your offices and not fear dialogue with the people, but go to meet them, speak with them honestly and openly, and support their initiatives. This is particularly important on urban development issues and matters concerning preserving the historical appearance and creating a modern living environment.

Unfortunately, such issues are sometimes decided in the corridors, and when this happens, it is hard not to ask, “Are you sure that what you are proposing, based only on the opinions heard in officials’ offices, is the best proposal? Is it not better to consult with the people and ask them what they want to see in their streets, yards, parks and embankments, sports fields and children’s playgrounds?”

Next year, we will send 20 billion rubles for urban development programmes to the regions, including in the single industry towns. It is a matter of principle that residents should take part in deciding how this money should be spent and which projects should take priority. I ask the Russian Popular Front to take an active part in this work too. We need to organise effective oversight of this work so as to ensure the concrete results that people want to see, and we must support people who wish to join in these urban development projects.

It is important that civil society takes an active part in deciding issues such as improving environmental protection legislation, protecting rare plant and animal species, and establishing a humane system for dealing with stray animals.

We have declared next year, 2017, the Year of the Environment. I am instructing the Government to draft programmes for protecting such unique symbols of Russia’s nature as the Volga, Lake Baikal, and Lake Teletskoye in Altai.

Throughout the country, we need to clean up polluted areas and clear the dumps that have grown up on the outskirts of many towns, as we heard recently from Russian Popular Front activists. This problem exists not just in big towns but also in small settlements.

Moscow and St Petersburg are already carrying out large-scale road modernisation programmes. Starting next year, we will begin similar projects in other big cities too, in urban areas that are home to around 40 million people. Over the next two years, at least half of the roads should be modernised. I will not go further into the details now. The decision has been taken and the needed funds earmarked. Now, we just need to work effectively.

We will also pay the needed attention to important federal roads and to building the bridge to Crimea, which is an infrastructure project of national importance. This bridge’s construction is going to schedule.

Colleagues, two years ago, we encountered serious economic challenges and a difficult situation on global markets. We found ourselves facing sanctions that were an attempt to get us to dance to another’s tune and ignore our own fundamental national interests.

But let me say again that the main reasons for our economic slowdown are to be found above all in our internal problems, and above all in the lack of investment resources, modern technology, professional human resources, insufficient competition, and shortcomings in our business climate. The real sector of the economy has stopped falling now and we have seen a small increase in industrial production. Last year, our GDP fell by around 3.7 percent, but I think that this year, the figure will be small. Over the first 10 months of 2016, it came to 0.3 percent, and I think the final figure will be close to this.

The support programmes for a number of industrial sectors, including the housing market, have played a big part. I will say more about this now. We see the increase in industrial production, and it is small, but the trend is a positive one and we should certainly work now to keep it going.

Concerning the housing market, more than 85 million square metres of housing came onto the market in 2015. This was a historic record for our country.

This housing must be sold now, and of course, we need to increase people’s purchasing power. I will say more about this too, in relation to our mortgage support programmes.

We shall continue to provide targeted assistance to economic sectors still facing a negative situation. I already mentioned that modest growth in industrial production is underway now.

We have seen a slight overall decline in the automotive industry, although trucks have shown an increase of 14.7 percent, light commercial vehicles, up 2.9 percent, and buses, up 35.1 percent. In railway engineering, there is a 21.8 percent growth, and freight cars are up 26 percent. Agricultural machinery and equipment have shown very good momentum, 26.8 percent. The light industry is also demonstrating an upward trend.

In every corner of our great country, children have to be able to study in a pleasant, user-friendly, modern environment. There will be no more rundown school buildings with no basic amenities.

We have ensured macroeconomic stability, which is very important, and have maintained financial reserves. The Central Bank gold and currency reserves have not decreased, but have even grown. Whereas on January 1, 2016 they totalled $368.39 billion, now they stand at $389.4, almost 400 billion. Here, too, we can see positive dynamics.

We expect a significant decrease in inflation by the end of this year, to below 6 percent. Here, too, I would like to cite a few figures. If you remember, the inflation rate in 2015 was 12.9 percent. I hope that it will not rise above 6 percent this year, will stop around 5.8 percent. Obviously good, positive dynamics.

Allow me to remind you that the lowest inflation rate was recorded in 2011, 6.1 percent. I will repeat, this year it might be even lower. This means that next year, we could really achieve the target of 4 percent. This is a very good prerequisite for achieving substantial growth relying on a healthy economy.

However, I would like to emphasise that stabilisation does not mean an automatic transition to a sustainable recovery. If we do not address the underlying problems of the Russian economy, if we do not launch new growth factors at their full force, it will stagnate for years, and we will have to constantly scrimp and save, to delay development. We cannot afford that.

We will follow another path, which requires a clear statement of objectives and phased, system-based work towards achieving these objectives. This approach has yielded significant positive results more than once, and in a fairly short period of time. There was a time when we thought our agriculture issues would exist forever. We know what was said about this and how it offended our farmers when we spoke about agriculture as a kind of black hole that can swallow any amount of money and still produce no results. No, it turned out, even that sector could be rearranged. We found weighted solutions, adopted a state programme, created a flexible system of support for agricultural producers and agribusinesses, and today farming is a successful industry that feeds the country and is gaining international markets.

But as the proverb goes, every cloud has a silver lining. Our partners imposed the sanctions I mentioned, and we took measures in response and at the same time ended up helping our agricultural producers on the domestic market. They should remember though that this cannot and probably will not continue forever, and in any case, consumers need a competitive market environment. Our producers should therefore make the most of the current favourable situation.

Agricultural produce exports bring in more revenue today than arms exports. Only recently, we would probably have scarcely imagined such a thing possible. I have already spoken publicly about this and can say it again here today. Incidentally, as far as our arms exports go, we are still a serious contender on this market. Our exports came to $14.5 billion in 2015, and our agricultural produce exports came to $16.2 billion. This year, we expect a figure of $16.9 billion, which is very good. Let’s thank our agriculture sector workers for this result.

It is necessary to remove all barriers that undermine the development of the volunteer movement, and also provide every assistance non-profit organisations might need.

Much depends on the regions when it comes to developing the agriculture sector. I think we should give them greater independence in setting the priorities for using federal subsidies for the agriculture sector. The volume of subsidies should be pegged to increases in cultivated land, yields, and other quantitative indicators of effective production. This would encourage producers to bring idle agricultural land under cultivation and start using advanced agricultural technology.

Here, I want to stress that if we give the regions more independence in using federal budget money and federal support, this places greater responsibility on them for producing results, effectively investing the resources received, strengthening their own economic base, resolving social problems and problems in the housing and utilities sector.

In order to give our farmers greater opportunities for finding markets, we need to pay greater attention to supporting agricultural cooperatives. I ask the Agricultural Ministry, Rosselkhozbank and Rosagroleasing to work on this matter, as well as the Corporation for Small and Medium Business Development that will receive a capital injection of 13 billion rubles next year.

We have carried out far-reaching modernisation at our defence industry enterprises. This has resulted in increased production and, particularly important, in a significant increase in labour productivity. The defence industry has posted very good results and gives a good example. In 2016, we expect growth in the defence industry to reach 10.1 percent, and a labour productivity increase of 9.8 percent.

We must direct the defence industry to produce up-to-date competitive civilian products for healthcare, energy, aviation and shipbuilding, space exploration and other high-tech industries. The share of civilian products must increase to at least one-third of the defence industry’s total output within the next 10 years.

We have recently held a meeting on this issue, or rather several meetings, and I want to share our plans with you. In 2016, civilian goods will reach 16.1 percent of the defence industry’s output, and we plan to slightly increase this percentage by 2020. The increase will be relatively small because the Defence Ministry has placed many rearmament contracts with the industry. The share of civilian goods will reach 30 percent in 2025 and at least 50 percent in 2030.

I instruct the Government to organise systemic work to achieve these goals with support from our development institutions, including Vnesheconombank (VEB), the Russian Export Centre and the Industry Development Fund.

The IT industry is one of the most rapidly developing sectors, which is heartening. Russian IT companies have doubled their exports over the past five years. I have just cited the figures for the defence industry and agriculture: the figure for the defence industry is $14.5 billion. Our IT exports were almost zero only recently, but they have risen to $7 billion now.

The IT industry has also improved other performance indicators, such as revenue and tax payments, in part due to reduced insurance payment. The Finance Ministry has not recommended me to say that all these achievements were due to incentives, and so I am telling you that we also used other support instruments, although it should be admitted that incentives are very important for supporting our IT companies. This instrument has allowed them to effectively use their innovative intellectual potential. At the beginning of their development in 2010, the IT companies’ tax payments amounted to slightly over 28 billion rubles, while two years later the figure reached 54 billion rubles. You can judge the growth for yourself. Considering the incentives, the national shortfall in revenue was only 16 billion rubles. In other words, even the federal budget benefited from the IT companies’ growth. To maintain this positive trend, I propose that we extend these incentives to 2023. I am confident that the IT industry can become one of our key export sectors within 10 years.

On the whole, we have good potential for increasing non-commodity exports. At the same time we see protectionism growing in the world and, unfortunately, trade barriers being raised. I can tell you that I recently had a meeting with my colleagues in Lima, Peru and we discussed world trade issues. One of the main problems is growing protectionism. But what does this mean for us? It means that we should fight for access to external markets more actively and decisively. Intense international competition will temper and strengthen our economy and ensure Russian companies reach a new level of efficiency, the quality of goods and services and labour productivity.

The examples I cited earlier show that we are already changing the economic structure in a focused way, modernising corresponding sectors and creating new ones, and establishing modern companies that can work on international markets. It is essential to continue moving in this direction systematically and assertively. What is needed are not abstract scenarios, which are mostly irrelevant, but a professional, thoroughly calculated development forecast. It is important to define clearly how a better business climate, major investment projects, an expansion of non-commodity exports, and support for small and medium-sized businesses will contribute to economic growth and what the role of regions and particular production sectors will be.

I direct the Government, together with the leading business associations, no later than May 2017, to develop a detailed plan of action through 2025, the implementation of which will make it possible to achieve economic growth rates higher than in the [rest of the] world as early as 2019−2020, and therefore strengthen Russia’s positions in the global economy.

Stabilisation does not mean an automatic transition to a sustainable recovery. If we do not address the underlying problems of the Russian economy, if we do not launch new growth factors at their full force, it will stagnate for years. We cannot afford that.

Ladies and gentlemen, to reiterate, it is important that this plan be supported and trusted by the business community so that entrepreneurs become actively involved in its implementation. Today, there is obviously a growing demand in society for an expansion of economic freedoms (we have talked about that more than once), stable, steady and predictable rules of doing business, including the tax system.

It may be recalled that in 2014 we took the decision not to change the existing tax requirements for business over the next four years. We did not review them despite the changes in the economic situation and that, without a doubt, has had a positive impact on companies’ performance.

At the same time, we should steer our tax system to work toward the main objective: to stimulate business activity, ensure economic growth and investment, and create a competitive environment for the development of our companies. It is necessary to streamline the existing fiscal benefits, making them more targeted, and abandon ineffective instruments.

I suggest that within the next year we carry out a detailed and comprehensive review of proposals to fine-tune the taxation system, and we should by all means involve business associations in this effort. Despite the domestic political timetable, we still need to draft and adopt in 2018 all relevant amendments to laws and the Tax Code so that they can come into force on January 1, 2019, setting new, stable long-term rules.

At the same time, I am asking the Government to explore ways to improve mechanisms that guarantee stability of the budget and public finances, while delivering on all our commitments regardless of external factors, including the price of oil and gas.

Moving on, we have overhauled the legal framework that regulates business activity. At the current stage, it is important to ensure that the adopted provisions are enforced, especially in the regions. Let me draw your attention to the fact that in every region of the country the basic services provided to businesses, such as construction permits, infrastructure access and so on and so forth, should be consistent with the requirements as per the federal laws and the best regional practices.

Colleagues, we discussed this issue during a recent meeting held, I believe, in Yaroslavl. This issue cannot be treated superficially. This is an extremely important area for our joint work. We will monitor developments in the regions very closely and evaluate the performance of regional authorities using these indicators. This is a major task that has to be achieved as early as next year. By doing so, we will make sure that all Russian regions operate within a single business environment and all provide quality services to the business community.

For many years now, we have been discussing the issue of streamlining the activities of supervision and regulatory bodies. Beginning next year, they will become much more transparent by releasing to the public data on who inspects whom, how frequently, and what are the results achieved.

This will provide an opportunity to promptly respond to abuses and every violation of entrepreneurs’ rights by an inspector. I will not go through the list of all the decisions that were adopted to this effect. There are quite a few of them, so all we need is to make sure that they are implemented. We must do away with instructions that have nothing to do with the quality of services or security, while creating unsurmountable barriers for businesses.

Let me draw to the Government’s attention that the regulatory and supervisory bodies should speed up their work to introduce a risk evaluation-based approach that makes it possible to reduce substantially the number of inspections while making them more effective. I add that the inspection bodies should concern themselves not just with identifying violations, but also with prevention, and not just through formal measures, but in substance and, particularly important, provide consultative assistance to entrepreneurs, especially to those who are just starting their business.

The vast majority of civil servants are honest and decent people who work for the good of our country. But neither one’s office, nor connections in high places or past services can serve as a shield for corrupt officials.

I have already given the direct instruction to make sure that self-employed people’s work is not considered unlawful business activity. We should not start creating problems for these people for invented pretexts. In order to exclude the possibility of this kind of situation arising, I ask you within the coming year to formulate a clear legal status for self-employed people and give them the chance to work in calm and regular fashion.

Every person engaged in honest business, whether self-employed or as hired labour, should know that the state authorities and society are on their side. Justice is not about putting everyone in exactly the same conditions. It means giving people greater freedom, creating conditions for pursuing activity that brings respect, prosperity and success. Everything that limits these opportunities and violates people’s rights is unjust.

In last year’s Address, I spoke about pressure on business from some people in the law enforcement agencies. This sort of action often leads to successful businesses collapsing and people having their assets taken from them.

I want to thank the deputies for supporting the draft law that considerably toughens criminal penalties against law enforcement personnel for fabricating cases, including with the aim of hindering the work of businesspeople.

I want to say a few words about the fight against corruption. Over recent years, we have seen a fair number of headline-making cases against officials at the local, regional and federal levels. I stress that the vast majority of civil servants are honest and decent people who work for the good of our country. But neither one’s office, nor connections in high places or past services can serve as a shield for corrupt officials. At the same time, and I want to stress this point, no one has the right to pronounce a person’s guilt or innocence before the court has delivered its verdict.

Unfortunately, it has become common practice here to raise a fuss in the media over these headline-grabbing cases. We see that people from the law enforcement agencies are often also guilty of this. I want to stress the point that the fight against corruption is not a show. It requires professionalism, and a serious and responsible approach. Only then will it produce results and receive society’s broad support.

Colleagues, it is obvious that the external constraints and domestic borrowing rate increase have reduced the availability of financial resources for businesses and individuals. Nevertheless, the banking system has been able to replace foreign loans to our companies and stabilise the situation, and this is an obvious fact.

Now we need to reinforce business activity, the implementation of major economic projects, the available funding, especially since inflation is going down as I already said – this creates objective conditions for making bank loans cheaper. I repeat, the situation has improved slightly, but only for individual sectors. Overall, lending to the economy is still showing unstable dynamics.

We injected 827 billion rubles into the banking system as part of the 2015−2016 anti-crisis support programme. According to estimates, this resource allowed banks to significantly increase lending to the non-financial sectors.

However, the volume of these loans has not grown this year, but even went down slightly. I know about the calculations in rubles and in foreign currency, but the decline is still there, even taking into account the exchange rate difference. I would like those experts who believe the exchange rate differences are important to take note of this.

Indeed, it is clear that the ruble rate has changed against the dollar and the euro, and this must be taken into account, but even with this in mind, all the same, the decline in lending is evident.

There is certainly no doubt that we need to stimulate lending to the real sector. But the key question remains, what methods and means should we use to do so? Obviously, only stable banks with a solid capital reserve are in a position to develop lending.

This year, Russian banks have regained their profitability. The sector’s profit for the 10 months of last year was 193 billion rubles, and rose almost four-fold, to 714 billion rubles for the same period this year.

Furthermore, thanks to the Central Bank’s consistent and decisive efforts, the banking system is being cleared of outfits that break the law, violate clients’ rights, and carry out dubious financial operations. Many of them, at least the weak players, have left the market. The Central Bank has made an effort to clean up the banking system and continues this work now. This forms a good foundation for rapid pick-up in the economy and for developing lending to the real sector.

A number of countries have offered banks incentives to stimulate lending to the real sector of the economy. Some countries are also discussing the possibility of setting limits on how much borrowed funds banks can place in financial instruments.

I am not saying that we should copy blindly everything that is done abroad, all the more so as the Russian economy and its structure differ considerably from other countries that are taking these measures, but we can and should analyse these practices and borrow what would be suitable here.

In many countries, a non-banking financial sector works with success. We should develop this sector here too, as this would enable us to bring more money from investors and citizens into the economy through bonds and other mechanisms.

Fight against corruption is not a show. It requires professionalism, and a serious and responsible approach. Only then will it produce results and receive society’s broad support.

This is something we have been discussing for quite some time now. I hope that the Central Bank and the Government will draft proposals on developing the financial market. Of course, this work should focus on our economic growth tasks and any changes made should not lead to the emergence of macroeconomic imbalances or to bubbles in the economy.

It is very important to support lending for small businesses. This lending continues to fall for now. What additional steps should we take to change this? The financial authorities think that this situation can be remedied.

Big banks, for reasons of the scale and complexity of their operations, apply strict requirements in accordance with international standards (some experts think that these standards are overly strict for our situation, but let’s not go into the details of this debate now), but small regional banks that carry out the vital function of lending to small businesses and the general public usually have simpler banking operations and so could work according to simplified regulations and requirements. These banks account for only 1.5 percent of total banking assets, and so this would not create any risks for the banking system as a whole. This kind of differentiated banking system regulation would enable clients to go to the bank that best suits their needs, and small businesses would not have to compete with big companies for credit resources.

Of course, our fundamental requirement has not changed: each level of the banking system must be healthy and stable, so that the clients and investors will be confident of the safety of their funds.

Colleagues, to move up to a higher development level in the economy and social sector we need our own advanced research and scientific solutions. We must focus on the sectors where a powerful technological potential is accumulating for the future, that is, digital and other cross-cutting technologies that now determine all spheres of life. The countries that generate such technologies will get a lasting advantage and an opportunity to generate huge technological revenues. Those who fail to do this will be placed in a dependent and disadvantaged position. Cross-cutting technologies are technologies that can be applied in all sectors, such as digital, quantum, robotic, neural and other technologies.

However, we should be wary of the inherent risks of the digital technology. We must strengthen our protection against cyber threats and greatly enhance the stability of all infrastructure elements, the financial system and state governance.

I propose launching a large-scale system-wide programme to develop an economy of a new technological generation, the so-called digital economy. We will rely on Russian companies and Russian scientific, research and engineering centres to implement this programme.

Russia’s national and technological independence, in fact, our future depend on this. We need to conduct an inventory to remove managerial, legal and any other barriers that hinder the advance of our business to existing and emerging high-tech markets. We must allocate sufficient financial resources for these projects, including by setting this task to the refurbished VEB (Bank for Development).

We will need skilled personnel, engineers and workers, who will be ready to fulfil next-generation tasks. This is why we are cooperating with businesses to create an up-to-date system of secondary vocational education and college and vocational school teacher training based on advanced international standards.

I propose launching a large-scale system-wide programme to develop an economy of a new technological generation, the so-called digital economy. We will rely on Russian companies and Russian scientific, research and engineering centres to implement this programme.

We will increase the percentage of state-financed students at engineering, IT and other key departments on which our economic development depends. Next year, our leading universities, including in the regions, will establish competence centres, which will provide intellectual and personnel support to projects that are connected with the emergence of new sectors and markets.

Fundamental research is a powerful factor in accumulating scientific and technological expertise required for economic growth and social development. It faces a dual task: to assess and predict future trends and offer the best solutions to the emerging challenges.

In science, just as in every other sector, we will promote competition and support the strongest, those who are able to produce practical results. The Russian Academy of Sciences and all research organisations should take this into account. We will continue building the research infrastructure that will allow us to perform large-scale scientific tasks.

Over 200 laboratories have already been established under the mega grants programme. It would be no exaggeration to say that they are operating on a global level. They are led by scientists who determine the trends of global scientific development (incidentally, many of them are our compatriots who went abroad in the past).

Recently I met with a group of such researchers. Now many of them are spending most of their time in Russian laboratories. They are successful and enjoy their work. They can see for themselves that Russia is setting interesting scientific tasks, and creating a sound research base and decent working conditions.

But, of course, people have the right to understand that there is a horizon of work and planning and in this context I would ask you to ensure long-term funding for productive research projects, in particular, using the resources of the Russian Science Foundation.

It is very important to support Russia’s talented young scientists and there are many of them. They should have an opportunity to establish their research teams and laboratories. A special category of seven-year grants will be launched for this purpose. Another 3.5 billion roubles will be allocated for these purposes, as well as the development of the research infrastructure and the opening of new laboratories in 2017 alone, in addition to the already announced budget for science.

Needless to say, the activities of research centres should be closely integrated with the education system, the economy and high-tech companies. We must turn our research projects into successful commercial products. This has always been a weak spot for us. A lot of time passes from developments to their introduction and sometimes even… This applies not only to our time, and not even to the Soviet time. Things were the same in the Russian Empire. We must overcome this trend and we can do this. To resolve this issue, we launched the National Technology Initiative two years ago. It is called upon to ensure the leading positions for Russian companies and products in the most promising markets of the future.

Colleagues, all of what I said now, all of these priorities are set out in the National Science and Technology Development Strategy. I have signed the executive order approving it.

You all know that we have encountered attempts to pressure us from abroad over these last years. I mentioned this twice. They have used every means: from spreading myths about Russian aggression, propaganda and meddling in others’ elections to persecuting our athletes, including our Paralympic athletes.

But, as I said, every cloud has a silver lining, and the doping scandal, I am sure, will help us to put in place the most advanced system here in Russia for fighting this scourge. I say this based on the fact that our national doping prevention programme will be ready at the start of next year.

What I want to say is that everyone has more than had their fill now of media campaigns carried out to order, the fabrication and publication of compromising material, and moralising lectures. If need be, we can lecture whoever, but we understand our responsibility and we have a sincere desire to take part in resolving global and regional problems, in situations, of course, where our involvement is fitting, wanted and needed.

We do not want confrontation with anyone. We have no need for it and neither do our partners or the global community. Unlike some of our colleagues abroad, who consider Russia an adversary, we do not seek and never have sought enemies. We need friends. But we will not allow our interests to be infringed upon or ignored. We want to and will decide our destiny ourselves and build our present and future without others’ unasked for advice and prompting.

At the same time, we desire well-intentioned and equal dialogue and we affirm the principles of justice and mutual respect in international affairs. We are ready for a serious discussion on building a stable system of international relations for the 21^st century. Sadly, the decades that have passed since the end of the Cold War have been wasted.

We support security and development opportunities not just for the select few, but for all countries and peoples, and we support respect for international law and global diversity. We oppose any monopoly, whether it be a claim to exceptionality or attempts to bend the international trade rules to suit one’s own needs, limit freedom of speech and, in fact, introduce censorship to the global information space. We were always reproached for supposedly imposing censorship here in Russia, but now we see that others are taking this road themselves.

Russia is proactive in promoting a positive agenda in international organisations and informal associations, including the UN, the Group of Twenty and APEC. Together with our partners we also promote our own frameworks, such as the CSTO, BRICS and the SCO. Further strengthening cooperation within the Eurasian Economic Union and with other CIS countries has always been a foreign policy priority for Russia.

Russia attaches great importance to the idea of building a multi-level integration model for Eurasia in the form of a Greater Eurasian Partnership. We are already discussing this idea on various international and regional levels. I am confident that we can have conversation with the European Union countries, where the demand for political and economic independence is currently on the rise. This is what we see judging by election results.

There is great potential for Russia in terms of cooperation with the Asia-Pacific region, as we saw at this year’s Eastern Economic Forum. I ask the Government to make sure that all decisions regarding the development of the Russian Far East are implemented without exception. Let me reiterate that Russia is proactive in its Eastern policy not because of any momentary considerations we may have, not because of the cooling in relations with the United States or the European Union, but for the reason that it serves Russia’s long-term interests and is consistent with the global development trends.

In today’s challenging environment, the comprehensive partnership and strategic cooperation between Russia and China have become one of the key factors in ensuring global and regional stability. This partnership can be regarded as a model for shaping a world order free from the domination of a single country, no matter how strong it is, and taking into account the interests of all countries in harmony.

Today, China is about to become the world’s largest economy, so it is very important that every year adds new large-scale projects in various areas, including trade, investment, energy and high technology, to our mutually beneficial cooperation.

Developing a special privileged strategic partnership with India is another major foreign policy priority for Russia. In October 2016, Goa hosted Russian-Indian top-level talks, confirming that our countries have great potential for strengthening cooperation in a number of areas.

Russia also expects to achieve substantial progress in relations with Japan, our eastern neighbour. We welcome the commitment of the country’s leaders to promote economic ties with Russia by launching joint projects and programmes.

Russia is also ready to work with the new US Administration. It is important to put bilateral relations back on track and to develop them on an equal and mutually beneficial basis.

When people feel they are doing the right thing, they act in close solidarity, and advance with confidence along the chosen path. In recent years, we have had a hard time, but these trials have made us even stronger.

Cooperation between Russia and the United States in addressing global and regional issues will benefit the whole world. We have a shared responsibility to ensure international security and stability, to strengthen non-proliferation regimes.

I would like to emphasise that attempts to break the strategic parity are extremely dangerous and can lead to a global catastrophe. We must not forget about it even for a second.

I certainly count on joining efforts with the United States in the fight against real rather than fictional threats, international terrorism being one of them. That is the task our servicemen are fulfilling in Syria. Terrorists have suffered significant losses. The Russian Army and Navy have shown convincingly that they are capable of operating effectively away from their permanent deployment sites.

By the way, we also appreciate the work that special services and divisions are carrying out inside the country to combat terrorism. We have suffered casualties, too. All of that is certainly in the focus of our attention. We will continue this work. I want to thank all of our military for their professionalism and dignity, their courage and bravery, for the fact that you, Russian soldiers, cherish your own and your country’s honour.

Colleagues,

When people feel they are doing the right thing, they act in close solidarity, and advance with confidence along the chosen path. In recent years, we have had a hard time, but these trials have made us even stronger, truly stronger, helped us better and more clearly define those areas in which our efforts must be even more persistent and vigorous.

While overcoming the current difficulties, we have created a foundation for further movement forward. We never stopped working on the development agenda, which is extremely important. That is, we did not get bogged down in some trivia of the day, like dealing with survival issues, but we thought about the development agenda and contributed to it. This agenda is coming to the forefront today.

The country’s future depends on us, on all our citizens’ work and talent, on their responsibility and success. We will certainly achieve our goals, resolve the challenges of today and tomorrow.

Thank you very much.

(Anthem of the Russian Federation.)

Soyuz-2.1a successfully launched from Vostochny

2016-04-28T12:13:45+04:00

Vladimir Putin observed the launch of the Soyuz-2.1a carrier rocket from the Vostochny Space Launch Centre. The booster will deliver into orbit three spacecraft – Mikhail Lomonosov, Aist-2D and SamSat-218.

The President congratulated Roscosmos, cosmodrome workers and builders on the successful launch of the carrier rocket.

“I would like to congratulate you all. We have reason to be proud,” Vladimir Putin said at a meeting with rocket launch team and Roscosmos representatives. “This is definitely a very important and significant step forward in the development of the Russian cosmonautics.”

The President was joined for the launch event by Chief of Staff of the Presidential Executive Office Sergei Ivanov, Deputy Prime Minister Dmitry Rogozin, General Director of Roscosmos Igor Komarov, Commander of the Russian Space Forces and Deputy Commander-in-Chief of the Russian Aerospace Forces Lieutenant-General Alexander Golovko, First Deputy Director of Roscosmoc Alexander Ivanov, Director of the Federal Agency for Special Construction Alexander Volosov, and the team of builders who took part in the cosmodrome construction.

The launch initially scheduled for April 27, had been postponed for 24 hours following failure in operation of the flight control system.

Vostochny is Russia’s first civilian spaceport for preparation and launch of scientific, socioeconomic and commercial satellites. The main construction works were completed in mid-January of 2016.

The Mikhail Lomonosov satellite is designed to help study transient phenomena in the Earth’s upper atmosphere and magnetosphere and near-Earth radiation environment along with fundamental cosmological studies.

The Aist-2D small satellite is designed to position and control spacecraft and study how external factors in outer space impact spacecraft equipment and satellite body materials.

Nanosatellite Samsat-218 was created by students at Samara State Aerospace University to test orientation control algorithms for this class of spacecraft.

Speech at the meeting with Soyuz-21.a carrier rocket launch team

President of Russia Vladimir Putin: Friends,

I am happy to welcome you to Vostochny, a new and actually the first ever Russian spaceport.

You know that work began here in 2007, when a Presidential Executive Order was signed for creating this complex. We have completed it now.

But this is only the first phase of a challenging project. You have done everything you were supposed to do, and you have done so with great skill.

As you know, computers played it safe and aborted yesterday’s flight to go through their checklists once more. There is no harm done. On the contrary, everything has been done with quality in mind, in the best possible manner.

As they say, the proof is in the pudding. You need a successful first launch to prove that the space centre is ready for work. You have done it. Congratulations!

The construction teams still have much to do yet. The first stage has been completed, but there are more stages ahead. As you know, we plan to build new infrastructure for heavy carrier rockets. We are also considering building infrastructure for super-heavy rockets and manned missions here. I am confident that together we will accomplish this task.

Well begun is half done. Good luck, and thank you.

Presidential Address to the Federal Assembly

2015-12-09T12:29:35+04:00

Vladimir Putin delivered the Annual Presidential Address to the Federal Assembly. The Address was traditionally delivered at the Kremlin’s St George Hall before an audience of more than 1,000 people.

Those present for the Address included members of the Federation Council, State Duma deputies, members of the Government, heads of the Constitutional and Supreme Courts, regional governors, heads of regional legislative assemblies, heads of Russia’s traditional religious faiths, public figures, including heads of regional civis chambers, and the heads of Russia’s biggest media outlets.

* * *

President of Russia Vladimir Putin: Citizens of Russia, members of the Federation Council, State Duma deputies,

I would like to begin my Address with words of gratitude to the Russian servicemen who are fighting international terrorism.

Today here in the St George’s Hall, a historic hall of Russian military glory, we have combat pilots and representatives of the Armed Forces who are taking part in the anti-terrorist operation in Syria.

Gelena Peshkova and Irina Pozynich, who lost their husbands in the war against terror, have joined us too. My deepest respect to you and the parents of our heroes.

I would like us all to honour the memory of the soldiers who gave their lives while doing their duty, and the memory of all Russian citizens who fell at the hands of terrorists.

(Moment of silence)

Colleagues,

Russia has long been at the forefront of the fight against terrorism. This is a fight for freedom, truth and justice, for the lives of people and the future of the entire civilisation.

We know what aggression of international terrorism is. Russia faced it back in the mid-1990s, when our country, our civilian population suffered from cruel attacks. We will never forget the hostage crises in Budennovsk, Beslan and Moscow, the merciless explosions in residential buildings, the Nevsky Express train derailment, the blasts in the Moscow metro and Domodedovo Airport.

These tragedies took thousands of lives. We still grieve for them and will always grieve, along with the victims’ loved ones.

It took us nearly a decade to finally break the backbone of those militants. We almost succeeded in expelling terrorists from Russia, but are still fighting the remaining terrorist underground. This evil is still out there. Two years ago, two attacks were committed in Volgograd. A civilian Russian plane was recently blown up over Sinai.

International terrorism will never be defeated by just one country, especially in a situation when the borders are practically open, and the world is going through another resettlement of peoples, while terrorists are getting regular financial support.

Terrorism is a growing threat today. The Afghanistan problem has not been resolved. The situation there is alarming and gives us no optimism, while some of the yet recently stable and rather well-doing countries in the Middle East and North Africa – Iraq, Libya and Syria – have now plunged into chaos and anarchy that pose a threat to the whole world.

We all know why that happened. We know who decided to oust the unwanted regimes and brutally impose their own rules. Where has this led them? They stirred up trouble, destroyed the countries’ statehood, set people against each other, and then “washed their hands”, as we say in Russia, thus opening the way to radical activists, extremists and terrorists.

The militants in Syria pose a particularly high threat for Russia. Many of them are citizens of Russia and the CIS countries. They get money and weapons and build up their strength. If they get sufficiently strong to win there, they will return to their home countries to sow fear and hatred, to blow up, kill and torture people. We must fight and eliminate them there, away from home.

This is why it has been decided to launch a military operation there based on an official request from the legitimate Syrian authorities. Our military personnel are fighting in Syria for Russia, for the security of Russian citizens.

The Russian Army and Navy have convincingly demonstrated their combat readiness and their increased capabilities. Modern Russian weapons have proved to be effective, and the invaluable practice of using them in combat conditions is being analysed and will be used to further improve our weapons and military equipment. We are grateful to our engineers, workers and all other personnel of our defence companies.

Russia has demonstrated immense responsibility and leadership in the fight against terrorism. Russian people have supported these resolute actions. The firm stance taken by our people stems from a thorough understanding of the absolute danger of terrorism, from patriotism, high moral qualities and their firm belief that we must defend our national interests, history, traditions and values.

The international community should have learned from the past lessons. The historical parallels in this case are undeniable.

Unwillingness to join forces against Nazism in the 20^th century cost us millions of lives in the bloodiest world war in human history.

Today we have again come face to face with a destructive and barbarous ideology, and we must not allow these modern-day dark forces to attain their goals.

We must stop our debates and forget our differences to build a common anti-terrorist front that will act in line with international law and under the UN aegis.

Every civilised country must contribute to the fight against terrorism, reaffirming their solidarity, not in word but in deed.

This means that the terrorists must not be given refuge anywhere. There must be no double standards. No contacts with terrorist organisations. No attempts to use them for self-seeking goals. No criminal business with terrorists.

We know who are stuffing pockets in Turkey and letting terrorists prosper from the sale of oil they stole in Syria. The terrorists are using these receipts to recruit mercenaries, buy weapons and plan inhuman terrorist attacks against Russian citizens and against people in France, Lebanon, Mali and other states. We remember that the militants who operated in the North Caucasus in the 1990s and 2000s found refuge and received moral and material assistance in Turkey. We still find them there.

Meanwhile, the Turkish people are kind, hardworking and talented. We have many good and reliable friends in Turkey. Allow me to emphasise that they should know that we do not equate them with the certain part of the current ruling establishment that is directly responsible for the deaths of our servicemen in Syria.

We will never forget their collusion with terrorists. We have always deemed betrayal the worst and most shameful thing to do, and that will never change. I would like them to remember this – those in Turkey who shot our pilots in the back, those hypocrites who tried to justify their actions and cover up for terrorists.

I don’t even understand why they did it. Any issues they might have had, any problems, any disagreements even those we knew nothing about could have been settled in a different way. Plus, we were ready to cooperate with Turkey on all the most sensitive issues it had; we were willing to go further, where its allies refused to go. Allah only knows, I suppose, why they did it. And probably, Allah has decided to punish the ruling clique in Turkey by taking their mind and reason.

But, if they expected a nervous or hysterical reaction from us, if they wanted to see us become a danger to ourselves as much as to the world, they won’t get it. They won’t get any response meant for show or even for immediate political gain. They won’t get it.

Our actions will always be guided primarily by responsibility – to ourselves, to our country, to our people. We are not going to rattle the sabre. But, if someone thinks they can commit a heinous war crime, kill our people and get away with it, suffering nothing but a ban on tomato imports, or a few restrictions in construction or other industries, they’re delusional. We’ll remind them of what they did, more than once. They’ll regret it. We know what to do.

We have mobilised our Armed Forces, security services and law enforcement agencies to repel the terrorist threat. Everyone must be aware of their responsibility, including the authorities, political parties, civil society organisations and the media.

Russia’s strength lies in the free development of all its peoples, its diversity, the harmony of cultures, languages and traditions, mutual respect for and dialogue between all faiths, including Christians, Muslims, Judaists and Buddhists.

We must firmly resist any manifestation of extremism and xenophobia while defending our ethnic and religious accord, which is the historical foundation of our society and the Russian statehood.

In 2016 we will hold elections to the State Duma. I would like to remind party leaders, all participants of the upcoming election campaign and all the social and political forces about the following words of our famous historian, Nikolai Karamzin: “Those who have no respect for themselves cannot hope to be respected by others. That does not mean that love for our homeland must blind us into saying that we are better than all others in everything we do. But Russians must know their value.”

Yes, we can debate ways to solve this or that issue. But we must remain united and remember what is most important for us: Russia.

The election campaign must be honest and transparent and respect the law and the electorate. At the same time, it must be conducted so as to win public trust in the election results and legitimacy.

Colleagues, I expect that a considerable part of the parliamentary candidates’ election programmes will be devoted to the issue of corruption, which is a major concern for society. Corruption is hindering Russia’s development.

Officials, judges, law enforcement officers and deputies at all levels are obliged to submit their income and expense declarations and declare their property and assets, including outside Russia.

From now on, state and municipal officials will also have to disclose information about the contracts they plan to sign with the companies of their relatives and friends. Situations with a possible conflict of interest will be closely monitored by the regulatory and law enforcement authorities, as well as civil society.

Just recently participants in the Russian Popular Front’s project For Fair Public Procurement told me about the instances of abuse and blatant violations they have uncovered. I ask the Prosecutor General’s Office and the law enforcement authorities to promptly react to this information.

The law must be hard on those who are guilty of premeditated crimes against human lives and the interests of society and the state. But the law must be lenient to those who have slipped up.

Today, nearly half of the criminal cases brought to court concern petty crimes or misdemeanours, but those who committed them, including very young people, go to prison for them.

A prison term and even a prison record usually have a highly negative impact on these people’s lives, often creating a situation in which they commit new crimes.

I ask the State Duma to approve the Supreme Court’s proposal that some offences in the Criminal Code are decriminalised and that misdemeanour is reclassified as an administrative offence, with an important reservation: a repeated offence must be classified as a criminal act.

We must also work to enhance the independence and objectivity of our courts. In light of this, I suggest strengthening the role of juries and expanding the list of crimes that can be submitted to them. It’s not always easy to find 12 jurors, and although I know the position of human rights organisations, which insist on 12-member juries, forming such juries is not easy and it is also expensive. Therefore, I suggest cutting the number of jury members from 12 to 5–7, on the condition that they take their decisions autonomously and independently.

Colleagues, last year we faced some serious economic challenges. Oil and other products we traditionally offer for export fell in price. The access of Russian financial institutions and companies to global financial markets was restricted.

I know that many people are experiencing hardships today. These economic issues are affecting incomes and the general quality of life. I understand very well that people are wondering when we are going to overcome these hardships and what needs to be done in order to accomplish this.

The current situation is complicated but, as I have said before, not critical. In fact, we can already see some positive trends. Industrial production and the national currency are generally steady. There is a slight decline in inflation. We can see a significantly lower capital flight as compared to 2014.

However, this doesn’t mean that we just calm down and wait for everything to miraculously change, or that we can just sit quietly in expectation of rising oil prices. Essentially, such an approach would be unacceptable.

We must be prepared for low commodity prices and external restrictions to last much longer. By changing nothing, we will simply run out of reserves and the economic growth rates will linger around zero.

This is not the only issue to consider. Busy with the immediate tasks, we must not overlook general global development trends. The global economy is rapidly changing shape. New trade associations are forming. We are experiencing a period of radical change in the sphere of technology.

This is a crucial moment when countries need to compete to secure their roles in the global division of labour for decades ahead. We can and must become one of the leaders.

Russia has no right to be vulnerable. We must have a strong economy, excel in technology and advance our professional skills. We must fully use our current advantages, as there are no guarantees that we will have them tomorrow.

Clearly, the authorities must hear the public out and explain the nature of the problems people face and the reasons behind the government’s actions, treating civil society and business as equal partners.

What areas should we focus on?

First, competitive manufacturing is still concentrated mostly in the commodities and mining sector. We’ll only be able to achieve our ambitious goals in security and social development, to create modern jobs and improve the living standards of millions of our people if we change the structure of our economy.

Importantly, we do have effective industrial and agricultural operations, as well as small and medium-sized businesses. Our goal is to have the number of these kinds of companies grow fast in all sectors. Our programmes for import substitution and export support, manufacturing retrofitting and professional training should be geared to achieving this goal.

Second, we need to bear in mind that a number of industries are now at risk, including primarily the construction, automotive, and light industries, as well as railway engineering. To address this, the Government will need to come up with special support programmes. Financial resources for this purpose have been set aside.

Third. It is imperative to support low-income households and socially vulnerable groups of citizens, and finally adopt fair principles of providing social assistance that is made available to those who really need it. In particular, it is necessary to take into account the individual needs of people with disabilities, and focus on their training and employment.

We have done a lot to improve demography, education, and healthcare. The key benchmarks in these areas were outlined in the corresponding executive orders of May 2012. Of course, life is ever changing, and, given current complications, our responsibility for people’s welfare only increases, so I’d like to ask you to take these executive orders seriously. We must strive to fulfil them.

Fourth, it is imperative to achieve a balanced budget. This, of course, is not an end in itself, but a critical prerequisite for macroeconomic stability and our financial independence. As you may recall, by the end of the 2016 federal budget year, the deficit should not exceed 3 percent, even if revenue is lower than expected. Please take a note of this, colleagues, members of the State Duma and the Federation Council, the Federal Assembly in general. This is important. I just mentioned that financial stability and the independence of our country are completely interrelated. Please keep these basic considerations in mind.

Budget planning, in fact, planning each budget cycle must begin with a clear identification of priorities. We must make government programmes play the decisive role in this process again. It is essential that we tighten our control over public funds, including federal and regional subsidies to industrial and agricultural enterprises. I believe that they should be transferred to the end user only through treasury accounts. Government revenue must be used strictly as planned. ”Grey“ schemes used in paying customs duties, excise taxes on alcohol, tobacco, and fuels and lubricants siphon off hundreds of billions of rubles from the budget annually. This is outright theft.

I propose forming a single system for administering tax, customs and other fiscal payments. There are a variety of options to go about this, and we have discussed them on many occasions. I expect the Government to submit specific proposals. Here again, I would like to emphasise that the tax environment for business should remain unchanged in the coming years.

Fifth. We need to further strengthen trust between the Government and business, to improve the business climate in Russia.

This year we have mostly completed the plans outlined in the national entrepreneurial initiative. The dynamics are good, but we certainly shouldn’t stop yet.

The Government, together with the Agency for Strategic Initiatives and leading business associations, should continue their systematic work to improve the conditions for doing business, constantly monitoring how laws are carried out locally.

I believe free enterprise to be the most important aspect of economic and social well-being. Entrepreneurial freedom is something we need to expand to respond to all attempts to impose restrictions on us.

That is why we have given such a broad authority to the newly created Federal Corporation for the Development of Small and Medium Business. I would like to ask all ministries, departments, governors, heads of all Russian regions, state-owned companies and banks to provide all the necessary assistance to it.

Polls show that businesses see no qualitative progress in the regulators’ work. Yet, all the necessary instructions for this have been issued, even more than once. We repeat ourselves and our attempts to reduce their powers. We reduce them in one area – they simply grow again in another. A whole army of inspectors continues to hinder the operation of good businesses. I am not saying that control is not necessary. Business does require regulation. But I ask the Government Commission for Administrative Reform to work out, together with business associations, proposals on eliminating redundant and overlapping functions of regulatory agencies, and submit them by July 1, 2016.

I would like to cite some figures supplied by one of our business associations. During 2014, the investigative authorities opened nearly 200,000 cases on so-called economic crimes. But only 46,000 of 200,000 cases were actually taken to court, and 15,000 cases were thrown out during the hearings. Simple math suggests that only 15 percent of all cases ended with a conviction. At the same time, the vast majority, over 80 percent, or specifically, 83 percent of entrepreneurs who faced criminal charges fully or partially lost their business – they got harassed, intimidated, robbed and then released. This certainly isn’t what we need in terms of a business climate. This is actually the opposite, the direct destruction of the business climate. I ask the investigative authorities and the prosecutor’s office to pay special attention to this.

I would like to emphasise that prosecutors should make greater use of the tools available to check the quality of investigations. I know that discussions have been going on for a long time about the prosecutor office’s needs. As you know, we have separated the investigative authorities and the prosecutor's office in order to ensure independent investigations are carried out; it was a conscious decision. Today, I remind you, the prosecutor’s office has the authority to cancel a decision to institute criminal proceedings, or waive the indictment, or even refuse to support the case in court. We must learn to use what is available; only then we will be able to analyse what is happening in practice.

In addition, I believe that suspects in economic cases should be detained only as a last resort measure; for the most part investigators should opt for release on bail, travel restrictions or house arrest. The role of law enforcement and the judicial system is to protect the economy and community from fraud and criminals, and to protect the rights, property and dignity of all those who obey the law and conduct their business honestly.

There is one more point I’d like to make. Last year we announced the so-called capital amnesty to return financial assets to Russia. Yet, businesses seem in no hurry to take advantage of that opportunity, which suggests that the procedure proposed is too complicated, while guarantees it provides are still insufficient. I follow the public discussions on the issue. The word is, that what we have already done and the decisions we made previously are slightly better than the solutions we’ve offered in years past, but it is definitely not enough today. I ask the Government to organise consultations, including further consultations with the business community, with the Supreme Court, with law enforcement agencies, and in short order make the appropriate adjustments. I also suggest extending the capital amnesty itself for another six months.

Colleagues, the state will fund the necessary assistance to those who are ready to go forward and become leaders. We are building such a system in our dialogue with the business community based on its requirements and the tasks facing our country.

The Industry Development Fund is already supporting import substitution programmes. These programmes are needed by entrepreneurs. I suggest increasing its authorised capital by another 20 billion roubles.

We are also guaranteeing stable tax rates and other basic terms for investors who are ready to finance import substitution projects. This is included in mechanisms such as the special investment contract. I suggest granting the regions the right to reduce profit tax to zero under such contracts. Some governors directly request this to allow investors to cover their capital outlays on developing new production lines.

Obviously, we are aware of the regional governors’ concerns. The regions should be motivated to consolidate their economic base, so an increase in regional profits from implementing these projects should not lead to a reduction in federal subsidies.

We are ready to guarantee the demand for the goods produced under these programmes and projects. I propose giving the Government the right to purchase on a non-competitive basis up to 30 percent of the products manufactured under special investment contracts. Whatever remains should go to the free markets, including those abroad, to motivate these companies, to monitor the quality of their products and reduce overheads.

As you know, when other countries carried out these kinds of programmes, the terms for state support were even tougher: it was mandatory for a certain percentage of goods produced to be sold abroad. What for? To motivate producers to manufacture quality products.

We’re saying that we will guarantee demand in our own market. Our terms are somewhat different from those in other countries with tougher terms. That said, we must assume that these products will be highly competitive on the international market. Let me emphasise again that we will support expressly competitive domestic production lines. No one should be working under the illusion that under the guise of import substitution it’s possible to build a substandard, out of date product and pawn it off to the state or to our people and make them pay a premium price for it. Russia needs companies that are capable not only of providing the country with quality products but also of taking on foreign markets. The Russian Export Centre was established to help those who are ready for this effort.

In addition, I suggest making the growth of non-energy exports one of the key indicators of the performance of industry-related agencies and the Government as a whole.

I think it would be appropriate to implement the business community’s initiative and create a technological development agency to help companies acquire domestic and foreign patents and licenses for engineering services. Access to foreign markets and the expansion of Russian manufacturing should become a natural strategy for the development of the nation’s business sector and the entire Russian economy. We should put stereotypes aside and believe in our own capabilities. If we work with this attitude, we are certain to see a result.

Our agriculture sector is a positive example. Just a decade ago we imported almost half of our food products and critically depended on imports, whereas now Russia has joined the exporters’ club. Last year Russia’s agricultural exports totalled almost $20 billion. This is a quarter more than our proceeds from arms sales or about one third of our profits from gas exports. Our agriculture has made this leap in a short but productive period. Many thanks to our rural residents.

I believe we should set a national goal — fully provide the internal market with domestically produced foods by 2020. We are capable of feeding ourselves from our own land, and importantly, we have the water resources. Russia can become one of the world’s largest suppliers of healthy, ecologically clean quality foods that some Western companies have stopped producing long ago, all the more so since global demand for such products continues to grow.

To fulfil these ambitious goals, we need to concentrate our resources on primary support for highly efficient farms. This approach should underlie the programme for the development of the agro-industrial complex. This includes large, medium and small companies – all of them must be efficient. I would like the Agriculture Ministry to pay special attention to this.

It is necessary to put to use millions of hectares of arable land that is now idle. They belong to large land owners, many of whom show little interest in farming. How many years have we been talking about this? Yet things are not moving forward. I suggest withdrawing misused agricultural land from questionable owners and selling it at an auction to those who can and want to cultivate the land.

I would like to ask the Government to prepare specific proposals, including draft regulations and standards by June 1, 2016. I would also like to ask the State Duma deputies and all members of the Federal Assembly to make amendments to the related laws over the next year and adopt laws to make this possible at the next autumn session.

We also need our own technology for the production, storage and processing of agricultural produce, our own seed and pedigree stock. This is a very important goal. We are still vulnerable in these areas. I ask you to get leading research centres, the Russian Academy of Sciences and businesses which are successfully putting advanced technology into practice involved in this process.

In my previous Address, I announced the launch of the National Technology Initiative, spanning 15–20 years, but practical work is already underway. It shows that we have plenty of strong teams capable of offering and following through on innovative ideas. In areas such as neutron technology, robotics in aviation and the transport sector in general, energy storage and distribution systems, Russia has every chance of breaking through to global markets in the near future, within the next few years.

Development institutions should be geared towards achieving priority goals, primarily those related to technological modernisation. We have over two dozen of them. Unfortunately, many of them, to put it bluntly, have turned into dumping grounds for bad debts. It is essential to streamline them and optimise the structure and mechanisms of this work. I know that both the Government and the Central Bank are actively working on this.

We should make a more active use of the investment potential of domestic savings for economic modernisation. I ask the Central Bank and the Government to submit proposals on the development of the corporate bond market, something we have discussed many times. It is essential to simplify the procedure for the issue and acquisition of corporate bonds. To make it worthwhile for investors, individuals to invest in the development of the domestic real sector, I propose exempting the coupon income on these bonds from taxation, including from income tax for individuals.

Dozens of major projects are being implemented or are about to be launched in industry, agriculture, transport and housing construction. They should have a positive impact not only on separate sectors but also stimulate the comprehensive development of entire territories. These are primarily private projects.

To expedite their effective implementation it is important to make pinpoint amendments to laws, lift administrative barriers and assist the development of infrastructure and the process of entering foreign markets. These issues often extend beyond the scope of just one government agency, so I propose putting in place a mechanism to support the most important projects. A special agency can be established for this. I ask Prime Minister Dmitry Medvedev to submit proposals on the work of this agency.

Incidentally, one such project could be the creation of major private Russian companies that specialise in online trade so that Russian goods are delivered via the Internet to all countries in the world. We do have a great deal to deliver.

Colleagues, we are interested in broad business cooperation with our foreign partners, and we welcome investors who focus on long-term work on the Russian market, even though the current circumstances they face aren’t always favourable. We highly appreciate their positive attitude to our country, and the fact that they see advantages for growing their respective businesses in our country. Russia is involved in integration processes designed to open additional avenues for expanding economic ties with other countries.

We have reached the next level of cooperation within the Eurasian Economic Union by creating a common space, with free movement of capital, goods and labour. We have reached a basic agreement on combining Eurasian integration with the Chinese Silk Road Economic Belt. A free trade zone with Vietnam was established. Next year, we will host the Russia-ASEAN summit in Sochi, and I am sure we will be able to work out a mutually beneficial agenda for cooperation.

I propose holding consultations, in conjunction with our colleagues from the Eurasian Economic Union, with the SCO and ASEAN members, as well as with the states that are about to join the SCO, with the view of potentially forming an economic partnership. Together, our states make up nearly a third of the global economy in terms of purchasing power parity. Such a partnership could initially focus on protecting investments, streamlining procedures for the cross-border movement of goods, joint development of technical standards for next-generation technology products, and the mutual provision of access to markets for both services and capital. Of course, this partnership should be based on principles of equality and mutual interest.

For Russia, this partnership will open new possibilities for increasing exports of food and energy, as well as offering services in engineering, education, healthcare, and tourism to the Asia-Pacific Region, allowing us to play the leading role in forming new technology markets, and re-orienting major global trade flows to Russia.

We will continue to upgrade our transport infrastructure and expand major logistic centres, such as the Azov-Black Sea and the Murmansk transport hubs, modern ports in the Baltic Sea and the Russian Far East. We will consolidate the system of inter-regional air transport, including in northern and Arctic regions. We will review in detail the situation with inland waterways and river routes during a forthcoming State Council meeting.

The Northern Sea Route should become a link between Europe and the Asia-Pacific Region. To enhance its competitiveness, we will extend the preferential regime of the free port of Vladivostok to key Far Eastern harbours, as requested by the entrepreneurs who operate in this strategically important Russian region.

The socioeconomic development of this region is a major national priority. Investors have shown great practical interest in the new methods of operation we have proposed, including priority development areas.

I instruct the Government to expedite decisions on levelling off energy rates for the Far Eastern regions where they are considerably above average national rates, and I urge the Parliament to promptly hear the draft law on the free allocation of land plots to people in the Far East.

Over the past few years, major investments have been made in the development of Khabarovsk and Vladivostok, and people there have noticed the improvements. Komsomolsk-on-Amur must become one more rapidly developing centre in the Far East. It is a city with a rich history and modern high-tech industries, which turn out civilian products that enjoy high demand and also work fruitfully for the defence sector. But this city’s urban and social infrastructure has been neglected.

I’m referring to the city’s face and its sports, culture, healthcare and education facilities, none of which are consistent with the potential of Komsomolsk-on-Amur. This is why it is difficult to attract talented young professionals there, which the regional companies badly need. I believe that we can use resources under the on-going programmes to address the problems of Komsomolsk-on-Amur without delay. Of course, we can’t do this overnight, but we at least must understand what we need to accomplish and how fast work must proceed.

Colleagues, we have a long-term agenda that must be independent of election cycles and the prevailing situation. These strategic goals include preserving the nation, bringing up our children and helping them develop their talents, which constitutes the basis of the power and future of any country, including Russia.

I’d like to begin with demography. We’ve registered a natural increase in population for the past three years. It has been modest, but present nevertheless. What I would like to highlight is that, according to forecasts, we should have seen a demographic collapse due to the demographic echo of the 1990s, which demographers have predicted, including at the UN. But this hasn’t come to pass, primarily because half of the new-borns today are second or third children. Russian families want to have children, they believe in their future and in their country, and they are confident that the state will help them.

The maternity capital programme ends next year. Over 6.5 million families have enjoyed its benefits, including in Crimea and Sevastopol. But we know that our efforts in this sphere have not been sufficient to close the demographic wound of the past.

Of course, we realise that this will be hard on the budget, that the programme needs major funding. We said in the past that we need to analyse the figures to see if we can shoulder this burden, as the financiers say, if we can guarantee the payment of these allocations. Yes, we can do this, despite the current challenges. I believe that we must extend the maternity capital programme for at least two years.

A major demographic policy measure is the development of preschool education. Over the past three years, 800,000 new places have been created at kindergartens. Practically in all parts of Russia, such institutions are available for children between the ages of three and seven. I know that the Prime Minister has paid special, personal attention to this. Thank you, Mr Medvedev.

However, so far, individual families – many families – continue to encounter problems placing children in kindergartens. As long as these problems exist, we cannot say that the issue has been closed. I ask both the Government and regional authorities to pay special attention to this.

Now, healthcare. The main achievement of our entire policy in this sphere is that we are seeing an increase in average life expectancy. Over the past decade, it has increased by more than five years and this year, according to preliminary estimates, should exceed 71 years. Nevertheless, there are still quite a few problems that have to be dealt with.

Next year, the Russian healthcare system will transition completely to an insurance-based system. It is the direct responsibility of insurance companies operating in the compulsory medical insurance system to uphold patients’ rights, including in situations where they are refused free medical care without a reason. If an insurance company does not do this, it should be held accountable, including being banned from working in the compulsory medical insurance system. I ask the Government to ensure stringent oversight in this regard.

Next. We have significantly expanded the scope of high-tech medical care. It may be recalled that in 2005, 60,000 high-tech operations were performed in Russia – 60,000! – compared to 715,000 in 2014. For the first time in the country’s history, a significant part of such operations are carried out without there being a waiting list, and this is indeed a major achievement.

However, it is important to understand that certain operations are expensive. As a general rule, they are performed at leading federal medical centres and clinics. To finance such operations, I propose establishing within the compulsory medical insurance system… We have thought about this a great deal – whether we should provide additional funding to the system. The deputies, government ministers and governors know what happens in reality. The compulsory medical insurance system is a territorial system and it supports primarily territorial healthcare institutions. Naturally, underfinancing is a matter of concern for the heads of major federal clinics, where the majority of high-tech operations are in fact performed. So, to finance these centres and perform such operations, I propose instituting a special federal component within the compulsory medical insurance system. I request that the relevant amendments to the law be adopted during the spring session.

Even so, this is not enough because people must not suffer while we make these decisions. It is necessary to ensure continuous financing of high-tech medical care, including with direct support from the federal budget until this decision is made.

As you also know, the ambulance service has been significantly upgraded as part of the Healthcare national project. We have procured a large number of modern ambulance vehicles and other equipment. Naturally, as time goes on, the auto fleet needs maintenance and renovation. Ten years have passed. This is the regions’ responsibility and they are duty bound to fulfil this task and find the necessary reserves.

When we did this 10 years ago, I remember well, we agreed that we will make an initial injection of federal funding, and then the regions will take over the responsibility and keep the financing at a certain level. But this never happened, which is unfortunate. I understand that there may be issues, but like I said many times before, it is imperative to get our priorities straight. It was the wrong thing to do to wait for everything to fall apart, and then expect to be bailed out again with the money from the federal budget. However, the way things are now, it looks like we will have to do it again. But that's not what we agreed upon. In any case, I ask the Government and the regional authorities to get back to this issue and resolve it jointly.

People are complaining that they often cannot understand why certain hospitals, schools, cultural or social centres and institutions are being closed or merged. We keep talking about the need to restructure the network, which is, in some cases, oversized. Yes, that’s a fact. But we must proceed very carefully and be fully aware of the fact that in order for us to be able to reach certain indicators, closing rural medical centres is not always the best option. Unfortunately, such things happen. People then have to travel 100 kilometres to get medical attention. This is outrageous! Please make sure that things are done right. I ask the Government to draft and adopt a methodology for the most efficient distribution of social institutions by March 1, 2016. It should be mandatory for use in the regions. We must find a legally valid formula that will allow us to do so.

In matters such as providing assistance to the elderly or people with disabilities, or supporting families and children, it is imperative to show more trust in civil society and non-profit organisations. Often, they work more effectively and efficiently, showing genuine concern for the people. Also, there’s less red tape in their work.

I would like to propose a number of concrete solutions based on the results of the active citizens’ forum Community, which took place in November.

First, we will launch a special programme of presidential grants to support non-profit organisations working in small towns and villages.

Second, the non-profit organisations that have established themselves as reliable partners of the state will receive the legal status of a ”non-profit organisation – provider of socially useful services,“ and a number of incentives and preferences. Finally, I believe that making up to 10 percent of the regional and municipal social programmes’ funding available to non-profit organisations is the right thing to do. That way, non-profit organisations will be able to participate in providing social services that are financed from the budget. We believe we know well the current legislation, and we are not imposing anything on anyone, but I’d like to ask heads of the regions and municipalities to bear this in mind in their work.

Colleagues, as you may recall, there was a meeting with children in Sochi at the Sirius Centre for Gifted Children on September 1. Our children and young adults are really interesting and goal-oriented people. We must do our best to make sure that today's students get an excellent education, have opportunities to be creative, choose a profession to their liking, and are able to self-actualise regardless of their geographical location or level of their parents’ income. All children must have equal opportunities for a successful start in life.

Every year, schools have more and more students. There will be 3.5 million more of them over the next decade. It's great, it's very good, but it is also important to make sure that this increase does not affect the quality of education and learning conditions, and that the current level continues to improve. Schools need more space for students. I asked the Government to put together, in conjunction with the regions, a specific plan of action in this regard. A decision was made to release up to 50 billion rubles from the federal budget next year to repair, renovate and build new schools.

I suggest we take a broader look at these issues. Comfortable buildings are not enough to get a good education. We need professional and motivated teachers, ground-breaking educational programmes and, of course, opportunities for the children to engage in creative activities, sports and extracurricular activities. Of course, we should use the best of what former Palaces of Pioneers and young technicians' clubs had to offer. We must build our work on an innovative and up-to-date foundation with the participation of businesses, higher education institutions and universities.

I will now note a positive fact, such as the growing interest of young people in engineering jobs and blue-collar occupations, the vocations of the future. Competition for enrolment in engineering universities has almost doubled in the past two years. The WorldSkills International (WSI) will take place in Kazan in 2019. By the way, Russia was the first to hold such contests for young people aged 10 to 17 years. It is important to make sure that such tournaments become a road map for school children, for those who are just choosing their trades. We must establish a whole system of national competitions for blue-collar workers. I suggest we call this system “The Young Professionals.” This is a very important task.

In a nutshell, Russian schools, additional and professional education, and support for children’s creative work should be aligned with the country’s future, the requirements of people, young people in this case, and the demands of the economy in the context of its prospects. These guys will have to resolve even more complicated tasks and should be ready to be the best. They should become not only successful in their careers but also simply decent people with a firm moral and ethical background.

Colleagues, we have repeatedly faced a historical choice of which road to take to further development. We crossed another milestone in 2014 when Crimea and Sevastopol were reunified with Russia. Russia declared a voce piena its status as a strong state with a millennium-long history and great traditions, as a nation consolidated by common values and common goals.

We are acting with the same confidence now, at a time when Russia is waging an expressly open, direct struggle against international terrorism. We are making and implementing decisions, knowing that only we can cope with the tasks facing us, but only if we act together.

I will cite a quotation that seemed stunning even to me. These words were said by a man who was far removed from politics, Dmitry Mendeleyev, who expressed these thoughts more than a hundred years ago: “We will be immediately destroyed if we are divided. Our strength lies in our unity, our warriors, our benign domesticity that multiplies the numbers of our people; our strength lies in the natural growth of our intrinsic wealth and love of peace.” These are wonderful words that are pertinent to us today.

At the same time Russia is a part of a global world that is changing rapidly. We understand well the complexity and scale of existing problems – both foreign and domestic. There are always difficulties and obstacles on the path to progress and development. We will respond to all challenges; we will be creative and productive; we will work for the common good and for the sake of Russia. We will move forward in unity and working together we will achieve success.

Thank you.

(Anthem of the Russian Federation.)

Meeting of the Commission for Strategic Development of the Fuel and Energy Sector and Environmental Safety

2015-10-28T09:57:17+04:00

Vladimir Putin chaired a meeting of the Presidential Commission for the Strategic Development of the Fuel and Energy Sector and Environmental Safety.

In particular, the meeting participants considered ways of adapting the Russian fuel and energy complex to new economic conditions, prospects for the implementation of a number of investment projects and measures to reduce the industry’s dependence on imported equipment.

* * *

President of Russia Vladimir Putin: Good afternoon, colleagues.

Today we will consider the current state of the national fuel and energy complex and compare notes with the CEOs of major Russian companies. We are talking about the oil, gas and coal industries. Power supply requires separate consideration at a future Commission meeting.

Before we begin, I would like to focus on a number of important matters. In the past few years, the Russian fuel and energy complex and its base industries have developed a good pace largely thanks to the decisions we made in the previous years. I am referring primarily to incentives for the development of fields in East Siberia and the shelf, as well as the stimulation of deep oil refining and the launch of the production of high quality motor oils.

These measures paved the way to unique discoveries of new reserves, including those on the Russian Arctic shelf, to enhance oil production, increase investment into deep oil refining and generally ensure overall positive dynamics of qualitative change in the fuel and energy complex. I would like to remind you, just by way of information, of the Karskaya oil and gas-bearing province discovered on the Russian Arctic shelf in 2014 with an overall resource base of about 87 billion barrels of oil.

Today Russia is among the world leaders in oil and gas production. In 2014 Russia produced 527 million tonnes of oil. This is slightly less than Saudi Arabia and slightly more than the United States: 12.9 percent for Saudi Arabia and 12.3 percent for the United States.

The production of natural gas in Russia in 2014 amounted to 578 billion cubic metres. We are implementing major projects to enhance the country’s export potential. The Russian fuel and energy complex is actively introducing new energy-saving environmentally friendly technologies. Thus, we have optimised the use of such an important resource as associated petroleum gas.

In the first six months of this year, for instance, we used 86.5 percent of associated gas, which is a 10.3 percent increase against 2012. We may not be moving at the rate we would have liked to, but we are gradually resolving the task we set ourselves a few years ago concerning associated gas.

Currently the fuel and energy complex accounts for 40 percent of all capital investment in the country. Our common goal is to retain the positive investment dynamics in the sector. We must bear in mind that investment into the fuel and energy complex has a positive effect on the entire national economy: it means additional jobs and orders for associated industries.

At the same time, the situation on the world energy markets is unstable, as you know better than anyone else. Thus, compared to mid-2014, oil prices have gone down by more than 50 percent. Gas prices followed with an almost 20 percent drop by the end of the first half of this year. World coal prices continue falling: from a peak in 2011, they have gone down by an average 50 percent. As a result, the crisis in the world energy sector forced international companies to cut investment into complex low-profit projects, which could have been implemented in conditions of higher prices of hydrocarbons.

For your information, though I am sure you know this already, but I would like to remind you that by international expert assessment, the reduction of world investment into the oil and gas sector might reach $300 billion in 2015. Over the past five years, the total losses incurred by producers of hard to extract shale oil in the United States amounted to about $150 billion, while in the first six months of this year they lost $62 billion. Obviously, this is not the first or the last crisis on the world market.

The key issue today is funding the fuel and energy complex investment programmes so it can continue acting as the driver of the national economy as a whole. We need to keep our eyes on the development horizon and ensure there are no pauses in investment. We must ensure the implementation of the long-term strategic goals facing the industry and, if necessary, adjust the draft national energy strategy along with the general development plans for the oil and gas sector and the coal industry development programme. By the way, the draft energy strategy envisages a significant growth in investment into the fuel and energy complex.

I would like to ask that you approach this issue with the utmost responsibility, indicating the sources of financing for investment programmes and determining measures for ensuring their success. As you know, investment cycles in the fuel and energy sector are fairly lengthy. The decisions made today will provide initial results in 5–7 years at the earliest.

Here is where I want to draw attention first and foremost. It is imperative to ensure that infrastructure projects with participation by the state are linked with energy companies’ investment programmes, focusing personnel and financial resources there.

Second, the fuel and energy sector traditionally plays a leading role in the federal budget’s revenues. With this in mind, we need to very carefully assess the efficacy of decisions we make concerning the industry’s tax burden and the impact they will have on the nation’s economy overall. We must strive to ensure that additional withdrawals from the industry do not lead to cuts in energy companies’ investment programmes and do not have a negative multiplier effect on related industries.

I know the discussions that were held in the industry, and indeed, I agree to an extent with the Finance Ministry, but we certainly need to constantly monitor the situation developing in the sector. Let’s return to this issue at an upcoming meeting of the Commission, after monitoring the situation, to see what is happening in the industry.

Third, we must increase the level of localisation for technologies and equipment that are needed by Russian companies and are in demand among domestic consumers. Naturally, it is important to also abide by the price-quality parameter and, moreover, we need to increase transparency of these orders by all mineral developers, regardless of the structure of their share capital. I ask that you report today about what has been done in this area.

Corresponding financial mechanisms should play an important role in developing import substitution of equipment for the fuel and energy sector, including relevant loans, leasing, and interest subsidies for equipment manufacturers. I ask participants in this meeting to share their thoughts on the efficiency of these instruments.

Fourth, it is imperative to continue our work to diversify exports of Russian energy resources. It is important to not only maintain our position in the traditional regions where we have a presence, but also enter new markets and know how to respond flexibly to changes in trends. In recent years, the growth points have been moving to nations in the Asia-Pacific Region. In spite of the fluctuations we are all aware of, this is a stable trend. The states in this region are becoming key hydrocarbon consumers. This is true of the liquefied natural gas market as well. Russia has the opportunity to increase its share of the LNG market and the planned large-scale projects in the LNG field should certainly be implemented.

Furthermore, it is imperative to continue work to improve stock exchange mechanisms in trading oil, oil products and natural gas. A year ago, we launched trade of natural gas on the St Petersburg International Mercantile Exchange, in fulfilling the decisions of our Commission. Over that period of time, the volume of trade came to 6.8 billion cubic metres. In developing exchange trade, it is imperative to create independent national price indicators for main types of fuel and energy products.

And in this respect, I would like to touch on another fundamentally important issue for developing the fuel and energy sector as well as the economy overall. I am talking about finally stopping the practice of using foreign currencies in domestic settlements. Mr Siluanov [Finance Minister], our law prohibits such payments, but what really happens? The prices for transhipment of crude oil and oil products in Russian ports of Novorossiysk, Taman, Ust-Luga, Kozmino, Primorsk and others are either set directly in US dollars or are denominated in US dollars in the online system practically in real-time mode. And this, of course, is unacceptable, it is in direct contradiction to current legislation. I do not understand, what are the monitoring agencies doing in this case?

We need to start serious work on the complex issue of strengthening the role of the ruble in payments, including for Russian fuel and energy sector products. National currencies should be used more widely in transactions with nations that we have active trade with. We are constantly discussing this with colleagues at an interstate level and we certainly need to strive to ensure a transition to this type of payment. Of course, I am fully aware of what our companies’ interests are. We need to do this carefully, so that the economic actors do not suffer – on the contrary, it should be beneficial to them.

And finally, we must systematically improve the competitive environment in our domestic market, first and foremost the oil products market. We need to stop the production and trade in counterfeit goods. Their circulation harms not only the companies that have made serious investments in modernisation and production of high-quality fuel, but overall, it is defrauding the population, directly deceiving consumers. In this respect, today we will consider applying common requirements to all oil producers.

And in conclusion, I suggest that at our next meeting we take a detailed look at the issue of monitoring the execution of previous decisions and instructions.

Let’s discuss today’s agenda.

<…>

Presidential Address to the Federal Assembly

2015-04-14T20:46:55+04:00

Vladimir Putin delivered the annual Presidential Address to the Federal Assembly. The Address was traditionally delivered at the Kremlin’s St George Hall before an audience of over 1,000 people.

In his Address, the President set out his views on the situation in Ukraine and outlined Russia’s position with regard to events taking place there. In the foreign policy section of the Address, Mr Putin also spoke about international security issues and the integration processes taking place in the world.

On the subject of Russia’s economic strategy, the President said that Russia is open to the world, to investment and to carrying out projects together, but ultimately, Russia’s development depends above all on the country’s own efforts. Mr Putin named development of new technology and competitive goods, giving the country’s industry and financial sector a more solid foundation, and training the needed personnel as priority tasks.

The President also talked about relations between the state and business, in particular the need to free up the environment for doing business as much as possible and the concrete steps that can be taken to achieve this. Mr Putin proposed that no changes be made to the current tax rules for the next four years, and also proposed an amnesty for capital returning to Russia.

The President set the goal of reaching growth rates above the world average within the next 3–4 years.

Mr Putin also set objectives in the financial sector, agribusiness, and the banking sector, and declared the need to free Russia from dependence on foreign technology. Import substitution is a long term strategy, the President said, and is a goal for Russia regardless of the situation with sanctions. Mr Putin also gave the main target figures for Russian exports and investment levels.

The President proposed implementing a national technology initiative that will involve forecasting the technology needs required to guarantee Russia’s national security and ensure high living standards and economic development over the coming 10–15 years.

The President also spoke about demography, healthcare and education.

In his concluding section, Mr Putin focused on the dialogue between the state authorities and the public and the need to raise civic activeness and Russia’s civil society potential.

The ceremony was attended by members of the Federation Council, State Duma deputies, members of the Government, heads of the Constitutional and Supreme Courts, heads of the constituent entities, chairpersons of regional legislative assemblies, heads of Russia’s traditional faiths, public figures, including heads of regional civic chamber, and executives of Russia’s major media outlets.

* * *

President of Russia Vladimir Putin: Citizens of Russia, members of the Federation Council and deputies of the State Duma,

Today’s address will be related to the current situation and conditions, as well as the tasks we are facing. But before delivering it I’d like to thank all of you for the support, unity and solidarity you have shown during the landmark events that will seriously influence the future of our country.

This year we faced trials that only a mature and united nation and a truly sovereign and strong state can withstand. Russia has proved that it can protect its compatriots and defend truth and fairness.

Russia has done this thanks to its citizens, thanks to your work and the results we have achieved together, and thanks to our profound understanding of the essence and importance of national interests. We have become aware of the indivisibility and integrity of the thousand-year long history of our country. We have come to believe in ourselves, to believe that we can do much and achieve every goal.

Of course, we will talk about this year’s landmark events. You know that a referendum was held in Crimea in March, at which its residents clearly expressed their desire to join Russia. After that, the Crimean parliament – it should be stressed that it was a legitimate parliament that was elected back in 2010 – adopted a resolution on sovereignty. And then we saw the historical reunification of Crimea and Sevastopol with Russia.

It was an event of special significance for the country and the people, because Crimea is where our people live, and the peninsula is of strategic importance for Russia as the spiritual source of the development of a multifaceted but solid Russian nation and a centralised Russian state. It was in Crimea, in the ancient city of Chersonesus or Korsun, as ancient Russian chroniclers called it, that Grand Prince Vladimir was baptised before bringing Christianity to Rus.

In addition to ethnic similarity, a common language, common elements of their material culture, a common territory, even though its borders were not marked then, and a nascent common economy and government, Christianity was a powerful spiritual unifying force that helped involve various tribes and tribal unions of the vast Eastern Slavic world in the creation of a Russian nation and Russian state. It was thanks to this spiritual unity that our forefathers for the first time and forevermore saw themselves as a united nation. All of this allows us to say that Crimea, the ancient Korsun or Chersonesus, and Sevastopol have invaluable civilisational and even sacral importance for Russia, like the Temple Mount in Jerusalem for the followers of Islam and Judaism.

And this is how we will always consider it.

Dear friends,

We cannot fail to mention today our perspective on the developments in Ukraine and how we intend to work with our partners around the world.

It is well known that Russia not only supported Ukraine and other brotherly republics of the former Soviet Union in their aspirations to sovereignty, but also facilitated this process greatly in the 1990s. Since then, our position has remained unchanged.

Every nation has an inalienable sovereign right to determine its own development path, choose allies and political regimes, create an economy and ensure its security. Russia has always respected these rights and always will. This fully applies to Ukraine and the Ukrainian people.

It is true that we condemned the government coup and the forceful takeover of power in Kiev in February of this year. The developments we are currently witnessing in Ukraine and the tragedy unfolding in the country’s southeast prove that we were right to take such a stand.

How did it all begin? I will have to remind you what happened back then. It is hard to believe that it all started with a technical decision by President Yanukovych to postpone the signing of the Association Agreement between Ukraine and the European Union. Make no mistake, he did not refuse to sign the document, but only postponed it in order to make some adjustments.

As you recall, this move was fully in line with the constitutional authority vested upon an absolutely legitimate and internationally recognised head of state.

Against this background, there was no way we could support this armed coup, the violence and the killings. Just take the bloody events in Odessa, where people were burned alive. How can the subsequent attempts to suppress people in Ukraine’s southeast, who oppose this mayhem, be supported? I reiterate that there was no way we could endorse these developments. What’s more, they were followed by hypocritical statements on the protection of international law and human rights. This is just cynical. I strongly believe that the time will come when the Ukrainian people will deliver a just assessment of these developments.

How did the dialogue on this issue begin between Russia and its American and European partners? I mentioned our American friends for a reason, since they are always influencing Russia’s relations with its neighbours, either openly or behind the scenes. Sometimes it is even unclear whom to talk to: to the governments of certain countries or directly with their American patrons and sponsors.

As I mentioned, in the case of the Ukraine-EU Association Agreement, there was no dialogue at all. We were told that it was none of our business or, to put it simply, we were told where to go.

All the arguments that Russia and Ukraine are members of the CIS free-trade zone, that we have deep-rooted cooperation in industry and agriculture, and basically share the same infrastructure – no one wanted to hear these arguments, let alone take them into account.

Our response was to say: fine, if you do not want to have a dialogue with us, we will have to protect our legitimate interests unilaterally and will not pay for what we view as erroneous policy.

So what’s came out of it all? The agreement between Ukraine and the European Union has been signed and ratified, but the implementation of the provisions regarding trade and economy has been postponed until the end of next year. Doesn’t this mean that we were the ones who were actually right?

There is also a question of why all this was done in Ukraine? What was the purpose of the government coup? Why shoot and keep shooting and killing people? In fact, the economy, finance and the social sector were destroyed and the country ruined.

What Ukraine currently needs is economic assistance in carrying out reforms, not petty politics and pompous empty promises. However, our Western colleagues don’t seem eager to provide such assistance, while the Kiev authorities are not willing to address the challenges their people are facing.

By the way, Russia has already made a major contribution to helping Ukraine. Let me reiterate that Russian banks already invested some $25 billion in Ukraine. Last year, Russia’s Finance Ministry extended a loan worth another $3 billion. Gazprom provided another $5.5 billion to Ukraine and even offered a discount that no one promised, requiring the country to pay $4.5 billion. Add it all up and you get as much as $ 32.5–33.5 billion that were provided only recently.

Of course, we have the right to ask questions. What was this Ukrainian tragedy for? Wasn’t it possible to settle all the issues, even disputed issues, through dialogue, within a legal framework and legitimately?

But now we are being told that this was actually competent, balanced politics that we should comply with unquestionably and blindfolded.

This will never happen.

If for some European countries national pride is a long-forgotten concept and sovereignty is too much of a luxury, true sovereignty for Russia is absolutely necessary for survival.

Primarily, we should realise this as a nation. I would like to emphasise this: either we remain a sovereign nation, or we dissolve without a trace and lose our identity. Of course, other countries need to understand this, too. All participants in international life should be aware of this. And they should use this understanding to strengthen the role and the importance of international law, which we’ve talked about so much lately, rather than bend its standards to suit someone's strategic interests contrary to its fundamental principles and common sense, considering everyone else to be poorly educated people who can’t read or write.

It is imperative to respect the legitimate interests of all the participants in international dialogue. Only then, not with guns, missiles or combat aircraft, but precisely with the rule of law will we reliably protect the world against bloody conflict. Only then, will there be no need to scare anyone with imaginary self-deceptive isolation, or sanctions, which are, of course, damaging, but damaging to everyone, including those who initiate them.

Speaking of the sanctions, they are not just a knee-jerk reaction on behalf of the United States or its allies to our position regarding the events and the coup in Ukraine, or even the so-called Crimean Spring. I’m sure that if these events had never happened – I want to point this out specifically for you as politicians sitting in this auditorium – if none of that had ever happened, they would have come up with some other excuse to try to contain Russia’s growing capabilities, affect our country in some way, or even take advantage of it.

The policy of containment was not invented yesterday. It has been carried out against our country for many years, always, for decades, if not centuries. In short, whenever someone thinks that Russia has become too strong or independent, these tools are quickly put into use.

However, talking to Russia from a position of force is an exercise in futility, even when it was faced with domestic hardships, as in the 1990s and early 2000s.

We remember well how and who, almost openly, supported separatism back then and even outright terrorism in Russia, referred to murderers, whose hands were stained with blood, none other than rebels and organised high-level receptions for them. These “rebels” showed up in Chechnya again. I'm sure the local guys, the local law enforcement authorities, will take proper care of them. They are now working to eliminate another terrorist raid. Let’s support them.

Let me reiterate, we remember high-level receptions for terrorists dubbed as fighters for freedom and democracy. Back then, we realised that the more ground we give and the more excuses we make, the more our opponents become brazen and the more cynical and aggressive their demeanour becomes.

Despite our unprecedented openness back then and our willingness to cooperate in all, even the most sensitive issues, despite the fact that we considered – and all of you are aware of this and remember it – our former adversaries as close friends and even allies, the support for separatism in Russia from across the pond, including information, political and financial support and support provided by the special services – was absolutely obvious and left no doubt that they would gladly let Russia follow the Yugoslav scenario of disintegration and dismemberment. With all the tragic fallout for the people of Russia.

It didn’t work. We didn’t allow that to happen.

Just as it did not work for Hitler with his people-hating ideas, who set out to destroy Russia and push us back beyond the Urals. Everyone should remember how it ended.

Next year, we will mark the 70^th anniversary of Victory in the Great Patriotic War. Our Army crushed the enemy and liberated Europe. However, we should not forget about the bitter defeats in 1941 and 1942 so as not to repeat the mistakes in the future.

In this context, I will touch on an international security issue. There are many issues related to this. These include the fight against terrorism. We still encounter its manifestations, and of course, we will participate in the joint efforts to counter terrorism on the international level. Of course, we will work together to deal with other challenges, such as the spread of infectious diseases.

However, in this case I would like to speak about the most serious and sensitive issue: international security. Since 2002, after the US unilaterally pulled out of the ABM Treaty, which was absolutely a cornerstone of international security, a strategic balance of forces and stability, the US has been working relentlessly to create a global missile defence system, including in Europe. This poses a threat not only to Russia, but to the world as a whole – precisely due to the possible disruption of this strategic balance of forces.

I believe that this is bad for the US as well, because it creates the dangerous illusion of invulnerability. It strengthens the striving for unilateral, often, as we can see, ill-considered decisions and additional risks.

We have said much about this. I will not go into details now. I will only say this. Maybe I am repeating myself. We have no intention to become involved in a costly arms race, but at the same time we will reliably and dependably guarantee our country’s defence in the new conditions. There are absolutely no doubts about this. This will be done. Russia has both the capability and the innovative solutions for this.

No one will ever attain military superiority over Russia. We have a modern and combat ready army. As they now put it, a polite, but formidable army. We have the strength, will and courage to protect our freedom.

We will protect the diversity of the world. We will tell the truth to people abroad, so that everyone can see the real and not distorted and false image of Russia. We will actively promote business and humanitarian relations, as well as scientific, education and cultural relations. We will do this even if some governments attempt to create a new iron curtain around Russia.

We will never enter the path of self-isolation, xenophobia, suspicion and the search for enemies.

All this is evidence of weakness, while we are strong and confident.

Our goal is to have as many equal partners as possible, both in the West and in the East. We will expand our presence in those regions where integration is on the rise, where politics is not mixed with economy, and where obstacles to trade, to exchange of technology and investment and to the free movement of people are lifted.

Under no conditions will we curtail our relations with Europe or America. At the same time, we will restore and expand our traditional ties with South America. We will continue our cooperation with Africa and the Middle East.

We see how quickly Asia Pacific has been developing over the past few decades. As a Pacific power, Russia will use this huge potential comprehensively.

Everyone knows the leaders and the drivers of global economic development. Many of them are our sincere friends and strategic partners.

The Eurasian Economic Union will start working in full on January 1, 2015. I’d like to remind you about its fundamental principles. The topmost principles are equality, pragmatism and mutual respect, as well as the preservation of national identity and state sovereignty of its member countries. I am confident that strong cooperation will become a powerful source of development for all of the Eurasian Economic Union members.

To conclude this part of my address, I’d like to say once again that our priorities are healthy families and a healthy nation, the traditional values which we inherited from our forefathers, combined with a focus on the future, stability as a vital condition of development and progress, respect for other nations and states, and the guaranteed security of Russia and the protection of its legitimate interests.

Dear friends,

To be able to implement all our plans and to meet the basic social commitments set forth in the presidential executive orders of May 2012, we must decide what we will do in the economy, finance and social spheres. But most importantly, we must choose a strategy.

I repeat that Russia will be open to the world, cooperation, foreign investment and joint projects. But we must above all see that our development depends primarily on us.

We will only succeed if we work towards prosperity and affluence, rather than hope for an opening or a favourable situation on foreign markets.

We will succeed if we defeat disorder, irresponsibility and our habit of burying good decisions in red tape. I want everyone to understand that in today’s world this is not simply an obstacle to Russia’s development but a direct threat to its security.

The period ahead will be complex and difficult, when much will depend on what each one of us do at our workplaces. The so-called sanctions and foreign restrictions are an incentive for a more efficient and faster movement towards our goals.

There is much we need to do. We need to create new technologies, a competitive environment and an additional margin of strength in the industries, the financial system and in the training of personnel. We have a large domestic market and natural resources, capital and research projects for this. We also have talented, intelligent and diligent people who can learn very quickly.

The most important thing now is to give the people an opportunity for self-fulfilment. Freedom for development in the economic and social spheres, for public initiatives is the best possible response both to any external restrictions and to our domestic problems. The more actively people become involved in organising their own lives, the more independent they are, both economically and politically, and the greater Russia’s potential.

In this context, I will cite one quote: “He who loves Russia should wish freedom for it; above all, freedom for Russia as such, for its international independence and self-sufficiency; freedom for Russia as a unity of Russian and all other ethnic cultures; and finally, freedom for the Russian people, freedom for all of us: freedom of faith, of the search for truth, creativity, work, and property.” Ivan Ilyin. This makes a lot of sense and offers a good guideline for all of us today.

Ladies and gentlemen,

Conscientious work, private property, the freedom of enterprise – these are the same kind of fundamental conservative values as patriotism, and respect for the history, traditions, and culture of one’s country.

We all want the same thing: wellbeing for Russia. So the relations between business and the state should be built on the philosophy of a common cause, partnership, and equal dialogue.

Naturally, responsibility and compliance with the law and obligations are essential in the business world, as it is in other areas of life. And this is exactly how the overwhelming, absolute majority of our business people work. They value their business and social reputation. Like genuine patriots, they want to be a benefit to Russia. These are the kind of people to look to, providing conditions for their productive work.

This is not the first time we are speaking about the need for new approaches to the activities of oversight, supervisory, and law enforcement agencies. Nevertheless, things are changing very slowly here. The presumption of guilt is still very much alive. Instead of curbing individual violations, they close the path and create problems for thousands of law-abiding, self-motivated people.

It is essential to lift restrictions on business as much as possible, free it from intrusive supervision and control. I said intrusive supervision and control. I will consider this in more detail later. I propose the following measures in this regard.

Every inspection should become public. Next year, a special register will be launched, with information on what agency has initiated an inspection, for what purpose, and what results it has produced. This will make it possible to stop unwarranted and, worse still, ‘paid to order’ visits from oversight agencies. This problem is extremely relevant not only for business, but also for the public sector, municipal institutions and social NGOs.

Finally, it’s crucial to abandon the basic principle of total, endless control. The situation should be monitored where there are real risks or signs of transgression. You see, even when we have already done something with regard to restrictions, and these restrictions seem to be working well, there are so many inspection agencies that if every one of them comes at least once, then that’s it, the company would just fold. In 2015, the Government should make all the necessary decisions to switch to this system, a system of restrictions with regard to reviews and inspections.

Concerning small business, I propose establishing ‘holidays from inspections’. If a company has acquired a good reputation and if there have not been any serious charges against it for three years, then for the next three years it should be exempted from routine inspections by government or municipal supervisory agencies. Of course, this does not apply to emergencies, when there is a danger to people’s health and life.

Business people talk about the need for stable legislation and predictable rules, including taxes. I completely agree with this. I propose to freeze the existing tax parameters as they are for the next four years, not revisit the matter again, not change them.

Meanwhile, it is important to implement the decisions that have already been made to ease the tax burden. First of all, for those who are just setting up their operations. As we have agreed, two-year tax holidays will be provided to small businesses registering for the first time. Production facilities that are starting from scratch will be entitled to the same exemptions.

Another thing. I propose a full amnesty for capital returning to Russia. I stress, full amnesty.

Of course, it is essential to explain to the people who will make these decisions what full amnesty means. It means that if a person legalises his holdings and property in Russia, he will receive firm legal guarantees that he will not be summoned to various agencies, including law enforcement agencies, that they will not “put the squeeze” on him, that he will not be asked about the sources of his capital and methods of its acquisition, that he will not be prosecuted or face administrative liability, and that he will not be questioned by the tax service or law enforcement agencies. Let’s do this now, but only once. Everyone who wants to come to Russia should be given this opportunity.

We all understand that the sources of assets are different, that they were earned or acquired in various ways. However, I am confident that we should finally close, turn the “offshore page” in the history of our economy and our country. It is very important and necessary to do this.

I expect that after the well-known events in Cyprus and with the on-going sanctions campaign, our business has finally realised that its interests abroad are not reckoned with and that it can even be fleeced like a sheep.

And that the best possible guarantee is national jurisdiction, even with all of its problems. We will continue to deal with those problems with conviction, together with our business community, of course.

Russia has already made significant headway in improving its business climate. A new legislative framework has for the most part been developed on the federal level. Now the focus should be shifted to the quality of law enforcement, promoting so called best practices in the regions in partnership with business, using the national investment climate ratings to this end. From next year, the ratings system will be introduced in all the regions. We will review the progress at a State Council meeting without fail.

We need properly developed construction sites and transport infrastructure in order to be able to expand businesses and accommodate new production sites. Our regions must focus on fixing regional and local roads. To enable them to do so, we have introduced additional sources for regional road funds. Overall, we should seek to double the volume of road construction across Russia.

Of course, what I have just said has been verified by the relevant government agencies. They all confirmed that this is a feasible project. We’ll be expecting to see the results of your work, colleagues.

In 2015, we will launch a programme to reimburse the regions’ expenses involved in creating technology parks. I hope that the regions will make good use of this opportunity to develop their own industrial capacity. These additional measures are being taken in order to support economic and industrial growth in strategically important Russian regions.

The law on a special economic zone in Crimea has been adopted. Favourable conditions will be created here for businesses, agriculture and tourism, manufacturing industries and maritime transport, including taxation, customs and other procedures.

As you may be aware, customs preferences for Kaliningrad Region will expire in 2016. It is imperative that alternative measures to support this region, which have already been prepared, be implemented in order to maintain a comfortable entrepreneurial climate.

I’d like to ask the Government to complete this work as soon as possible. I’d also like to ask the deputies not to delay their review of the law on priority development areas (PDA).

In addition, I propose extending PDA regulations to new projects in a number of single-industry cities with the most difficult socioeconomic situations, rather than waiting three years, as provided by the draft law (I believe it has passed its first reading). Instead, we should amend it and start working on single-industry cities right away.

Of course, PDAs should play a key role in developing the Russian Far East. We have announced ambitious plans for developing this region, and we will, of course, implement them. I’d like to ask the Government to consider recapitalising the Far East Development Fund. We can allocate a portion of federal tax increments, which will be obtained from new businesses opening in the region, for these purposes.

As is often the case in such matters, we had a tough conversation on this issue with the Finance Ministry. We agree that initially this can be done with an exception for VAT. Then, we’ll see how well this system works.

I propose providing a free port status to Vladivostok, with an attractive and easy customs regime. As you may be aware, Sevastopol and other Crimean ports have already been given this status.

We also need a comprehensive project for modern and competitive development of the Northern Sea Route. It must operate not just as an effective transit route, but also promote business activity on the Russian Pacific coast and the development of Arctic territories.

Colleagues, the quality and the size of the Russian economy must be consistent with our geopolitical and historical role. We must escape the trap of zero-level growth and achieve an above-average global growth rate within the next three to four years. This is the only way to increase Russia’s share in the global economy, and thus strengthen our influence and economic independence.

The national economy should also be more effective. It’s imperative that labour productivity be increased by no less than five percent annually. The Government should find reserves for this and come up with a plan for the best way to use them. At the same time, it’s important to maintain a stable macroeconomic environment and reduce inflation in the medium term to four percent, but, importantly, not through suppressing business activity. We must at last learn to harmonise two goals: containing inflation and stimulating growth.

Today we are faced with reduced foreign exchange proceeds and, as a consequence, with a weaker national currency, the ruble. As you are aware, the Bank of Russia has switched to a floating exchange rate, but this does not mean that the Bank of Russia has withdrawn from controlling the exchange rate, and that the ruble may now be the object of unchecked financial speculation.

I’d like to ask the Bank of Russia and the Government to carry out tough and concerted actions to discourage the so-called speculators from playing on fluctuations of the Russian currency. In this regard, I’d like to point out that the authorities know who these speculators are. We have the proper instruments of influence, and the time is ripe to use them.

Of course, a weaker ruble increases the risk of a short-term surge in inflation. It’s imperative that we protect the interests of our people, first and foremost, those with low incomes, and the Government and the regions must ensure control over the situation on the food, medicine and other basic goods markets. I’m sure this can be done without any problem, and it must be done.

A weaker national currency also increases the pricing environment and the competitiveness of our companies. We take this factor into account in our policy of import substitution (at least, where it’s appropriate and necessary). Within three to five years, we must provide our customers with high-quality and affordable medicines and food that are produced mostly in Russia.

The grain crop in Russia in 2014 was one of the best in recent history. The overall output growth across our agro-industrial complex currently stands at about 6 percent. We now have efficient large agricultural enterprises and farms, and we will support them. Let’s thank our agricultural workers for their performance this year.

We must also lessen our critical dependence on foreign technology and industrial goods, including in the machine-tool building and instrument-making industries, power engineering, and the production of equipment for field development, including on the Arctic shelf. Our commodities and infrastructure companies can seriously help our producers in this sphere. When implementing large oil, energy and transport projects, they must rely above all on domestic producers and promote demand for their products.

At this point, it’s mostly the other way around: we buy everything abroad, leaving the domestic industries and science empty-handed. I suggest creating a special governmental coordination centre and giving the Government more authority in this sphere. This centre would dovetail the implementation of large projects with placement of contracts at Russian companies, with further development of the national production and research facilities, and production localisation.

As for imports, we must only buy distinctly unique equipment and technology abroad. I’d like to add that we must also cooperate with domestic producers when upgrading the housing and utility sector, public transport, agriculture and other industries.

I am instructing the Government to take the necessary decisions to expand small and medium-sized businesses’ access to purchases by state companies, and in particular to determine the volume of state-owned companies’ mandatory annual purchases from small and medium firms. This is tens and hundreds of billions of rubles that must be used to boost the development of national businesses.

It goes without saying that their products must satisfy the strictest quality and price conditions. Next, we must prevent internal monopolism. I want to stress that reasonable import substitution – reasonable is the key word here – is a long-term priority, irrespective of external conditions.

Moreover, import substitution programmes must encourage the creation of a large group of industrial companies that can be competitive not only domestically but also on foreign markets. These companies exist in Russia. They are highly efficient and have export potential – very good potential. But they are short of capital, technology, personnel and equipment. We must remove as many of these restrictions as possible. We must provide investment incentives so that these companies can increase growth, increase their capitalisation and production severalfold and become established on foreign markets.

I am instructing the Agency for Strategic Initiatives to join forces with Vnesheconombank, the Russian Direct Investment Fund and other development institutions to draft a relevant programme and system. The first pilot programme for the support for non-commodity companies must be launched already next year.

The integrated credit and insurance export support centre, which will start operating in 2015, will stimulate domestic exports. Its services will be available to all non-commodity companies, both big and small.

In the next three years the capitalisation of Roseximbank, which was created for this purpose, should reach approximately 30 billion rubles. In the next three years, the volume of Russian high value-added exports should grow by 50 percent.

Of course, considerable funds will be needed for the development of the non-commodity and other economic sectors. Russia has these funds. We have large domestic savings, which must be used for this.

Despite any external restrictions, we must increase our annual investment to 25 percent of GDP by 2018. What does this mean? I’ll explain it with just a few words.

It means that we must invest as much as we save. Our savings must work for the national economy and development, rather than the export of capital. To be able to do this, we must seriously strengthen the stability of our banking system – the Central Bank has been working towards this end quite persistently – and also reduce the dependence of the national financial market on external risks.

I propose using our reserves (above all, the National Welfare Fund) to implement a programme for recapitalisation of leading domestic banks, with funding to be provided under clearly specified conditions to be funnelled into the most significant projects in the real economy at affordable interest rates. Furthermore, banks will have to introduce project financing mechanisms.

Regarding budget spending, the key requirements here should be thrift and maximum return, the correct choice of priorities and factoring in the current economic situation. For the next three years, we should set the goal of cutting costs and ineffective budget spending by at least five percent of total spending in real terms.

A huge economic reserve is lying on the surface. It is enough to look at government-financed construction projects to see this. At a recent forum of the Russian Popular Front, examples were cited of funds being invested in grandiose buildings or the construction costs of same-type – I want to emphasise this point – facilities, differing several times over, even in neighbouring regions.

I believe that it is necessary to phase in a system of a single technical contracting authority, and centralise the preparation of standard projects, construction documentation and the choice of subcontractors. This will make it possible to overcome the existing disparity in construction costs and ensure significant saving of public funds spent on capital construction projects, between 10 percent and 20 percent. This practice should be extended to all civil construction projects financed from the federal budget. I instruct the Government to submit relevant proposals.

Yesterday, the Prime Minister and I discussed this topic. Of course, there are some pitfalls here, and knowing what they are, it is important to avoid them, move with caution, implement several pilot projects in several regions and see what happens.

However, leaving the situation as it is today is no longer an option. As I said earlier, construction costs of similar facilities in neighbouring regions differ many times over. What is this?

Diversion or embezzlement of budget funds allocated for federal defence contracts should be treated as a direct threat to national security and dealt with seriously and severely, as in the suppression of the financing of terrorism. I mention this for a reason.

I don’t think there is anything to hide or gloss over here. We have just held our regularl meeting in Sochi with the leadership of the Defence Ministry, combat arms and services commanders and leading defence company designers.

On certain positions, prices double, triple or quadruple, and in one case they grew 11 times. You realise that this has nothing to do with inflation or with anything, considering that practically 100 percent of funding is provided in advance.

I would like to reiterate, and I’m bringing this to the attention of law enforcement agencies. I instruct the Defence Ministry, the Federal Service for Financial Monitoring and other relevant agencies to develop a system of strict, effective oversight over the use of funding allocated for federal defence contracts. This system should operate along the entire supply chain. Tougher penalties should be imposed on those in charge of federal defence contract implementation for misspending every ruble from the budget.

It is also crucial to streamline state-owned company budgets. To this end, unified financial settlement centres should be established therein, something like the treasury, to ensure the transparency and optimisation of financial flows and their effective management. Parent companies should also clearly see how funds are used in their subsidiaries.

Key efficiency parameters should be introduced in all companies where the state holds over 50 percent of stock, including the requirement to reduce operating expenses by at least 2–3 percent a year. I should add that compensations to state company management should be directly related to performance and economic realities.

Colleagues,

I’m confident that Russia is capable not only of carrying out a large-scale effort to upgrade its industrial sector, but also of becoming a supplier of ideas and technology for the whole world, emerging as a leading producer of goods and services that would shape the global technology agenda. Russian companies will embody national success and pride, just as our nuclear and space projects once did.

We have already adopted legislative amendments to introduce strict environmental standards. Their purpose is to push companies to implement the so-called best available technology, so that the key industries benefit from continuous upgrades.

That said, we should also be mindful of future challenges. In this regard, I propose implementing a national technology initiative. Long-term forecasts should provide us with insight into the tasks Russia could face in the next 10–15 years, what state-of-the-art solutions will be needed to ensure national security, improve quality of life, and promote industries operating in a new technological environment.

Promoters of promising creative projects should join efforts with vibrant companies that are ready to implement cutting-edge solutions. The leading universities, research centres, the Russian Academy of Sciences and major business associations should also be involved in this effort. And of course, our compatriots working abroad as academics or in high-tech sectors should also be invited to join in, but only those of them who actually have something to contribute.

I propose that the Government make the necessary arrangements, with assistance from the Agency for Strategic Initiatives. It is important that business representatives, academics and developers tell us what barriers need to be removed and what additional assistance they require. The most advanced technologies will yield results only if there are people who are ready to develop and use them.

Unfortunately, engineers are still mostly educated at universities that are no longer linked to the actual producers, and lack access to the latest research and solutions. It is high time that we focus on the quality of education, not sheer enrolment numbers, and ensure that engineers are trained by top higher education institutions with strong industry connections, and preferably in the same regions where the future engineers will live.

This quality requirement should also be applied to regular labour force. By 2020, at least half of Russia’s vocational training colleges are expected to offer education in 50 of the most relevant and promising labour professions, in accordance with the highest international standards and using advanced technology. Contests among workers and engineers should also become an important indicator of the changes in vocational training. The system of professional contests is not new, and Russia has joined it and has become a proactive member. This is not just about enhancing the prestige of engineering and labour jobs, but also an opportunity to be guided by the best practices in the training of such professionals. Building on this experience, professional and educational standards can be devised.

As you know, Russia competes in various international professional contests. I don’t have the data on hand, so I’ll cite them by memory, since they are worth mentioning. Three teams have been created: one with experts from leading enterprises, one with students and a third with 14 to 17 year old school students. They have trained to perform various tasks of the same kind. The team of 14 to 17 year old school students was able to find the best solutions for the most complex tasks in the space industry, where they worked on spacecraft, as well in traditional industrial tasks, despite the fact that such tasks were designed for highly-skilled workers. School students beat university students, as well as workers from the leading companies, by a wide margin. What this means is that, first, we have great potential, a lot of young promising talent. It also means that a lot has to be done to change the professional training system. It’s what I spoke about. We just need to avoid acting formally here. There is now a clear understanding of what should be done, so now we must just start doing it. Once we engage in this effort, we must keep up the momentum, since despite the changes in labour professions and training, the key economic driver always was and will continue to be the availability of highly-skilled qualified workforce and engineers. A network of certification centres should be created so that workers can prove that they meet professional requirements.

Colleagues,

I’ll move on to the next topic, which is demographics. In the early 2000s, UN experts predicted further demographic decline in Russia. According to UN forecasts, the population of our country was supposed to shrink to 136 million people by the end of 2013. On January 1, 2014, the population of Russia was almost 144 million people, 8 million more than forecast by the United Nations.

In addition, as you know, Russia registered natural population growth for two years in a row in 2013 and 2014. It is expected that by late 2014, with Crimea and Sevastopol included, Russia's population will exceed 146 million people. Our demographic programmes have proved their effectiveness, and we will continue to implement them, with full coverage for the people of Crimea and Sevastopol. Families in Crimea and Sevastopol that have had a second or subsequent child since 2007 will receive the full amount of maternity capital.

I would like to draw your attention to another important and meaningful fact. This year, Russia was for the first time recognised as a successful country in world health rankings. The average life expectancy in such countries exceeds 70 years. Currently, this indicator in Russia is over 71. I believe that we have every opportunity to increase average life expectancy to 74 years in the near future and achieve a drastic reduction in mortality. That’s why I propose declaring 2015 the National Year of Fighting Cardiovascular Diseases, which is the leading cause of death, and combining the efforts of healthcare workers, representatives of culture, education, media, civic and sports organisations in order to resolve this problem.

The 2014 Winter Olympics in Sochi played an enormous role in promoting a healthy lifestyle. Once again, I’d like to congratulate our Olympians on their success.

Of course, the kindest words go to the Paralympic athletes. Friends, you have become true heroes of Russia. Largely thanks to you, attitudes towards people with disabilities have undergone a dramatic change. I’m convinced that our society will become truly united when we provide equal opportunities to everyone.

Government programmes must include measures to provide vocational training and employment opportunities to people with disabilities and create a barrier-free environment in all spheres of life. I suggest extending the Accessible Environment programme to 2020. We also need to create a modern domestic industry to manufacture goods for people with disabilities, including devices for physical therapy and rehabilitation.

With regard to healthcare, it is imperative to complete the transition to an insurance-based system and to make sure all its mechanisms are working without a fault. We have been talking about it and working on it for quite a while now, but insurance-based medicine still isn’t working properly. Importantly, both patients and medical staff should have a clear understanding of how health insurance works. We must create a centralised system of public oversight over the quality of healthcare organisations with corresponding powers and levers. I’d like to ask the Government to amend the legislation accordingly.

I also propose providing a special training certificate to doctors. They will use it to choose the best educational programme for them in order to take advanced courses and improve their skills. The hours and methods of such training should be convenient for the doctors.

Even with the most advanced technological innovations in medicine, a doctor’s personal qualities remain important. That includes a focus on the patient, a noble attitude and commitment to their professional and moral duty. Such medical professionals are the backbone of our healthcare system. And we must create all the conditions for them to be able to do their job properly.

Colleagues, yesterday, for the first time in many years, students in Russian schools wrote graduation compositions. This is another step towards a more objective system of evaluating the academic progress, knowledge, perspective and intellect of the younger generation and, importantly, the quality of the teachers’ work.

I’d like to ask the Ministry of Education and Science in conjunction with the professional community to review the results of these compositions and the national final school exam and come up with solutions aimed at increasing teachers’ accountability and motivating children to learn new skills.

It should be noted that the national final school exam has allowed gifted children from remote towns and villages and low-income families to apply to the nation’s best universities.

Talented children are a valuable asset of the nation, and we need to provide additional support to young people who show an aptitude for technology, liberal arts or inventing at an early age, who have achieved success in national or international academic and professional contests, and have patents or publications in academic journals. We have many such young people.

I propose establishing 5,000 annual presidential grants for talented young people who study at higher education institutions. Each grant will be for 20,000 rubles a month.

Of course, certain conditions will apply for the duration of their studies at a higher education institution. First, such students must make a commitment to work for a certain time in Russia, as targeted training programmes currently require. Second, they would have to confirm their eligibility each year by demonstrating the necessary academic and personal achievements for the duration of their studies.

Every child and teenager in our country should be able to find something to do outside the classroom. Any curtailment of extracurricular, supplemental education is unacceptable. Art, technology and music centres help create well-rounded people.

I’d like to ask the Government and the regions to focus on this issue and come up with financial and organisational approaches to address it. Most importantly, children and their parents should have a choice between getting additional education at school, a municipal centre of creativity, or a non-governmental educational organisation. Importantly, all these options must be affordable and children must have access to classes taught by properly trained professionals.

Another important issue that I spoke about in last year’s address is overcrowded schools and classrooms. We have crunched the numbers and found that we need to create an additional 4.5 million spots at schools.

How did we arrive at this number? Today, nearly two million schoolchildren attend the second shift. There are schools with three shifts. In the coming years, with a growing birth rate (which we hope will continue), the number of pupils will increase by another 2.5 million.

Naturally, we also have to solve the issue highlighted in the executive orders signed in 2012, that of increasing the number of preschools, something we spoke about with our colleagues from the Government yesterday. This is the way it should be. We have to consider all our opportunities and remember that one problem will intensify – that of spots at schools. I ask the Government, together with the regional authorities, to develop a comprehensive approach to resolving these issues.

Colleagues,

Education, healthcare, and the social welfare system should become a true public benefit and serve all citizens of the country. Attention to the people cannot be faked. You cannot simulate teaching, medical assistance or social care. We have to learn to feel respect for ourselves and honour reputation. It’s the reputation of individual hospitals, schools, universities and social institutions that form the country’s overall reputation.

Citizens don't have to think about where to apply for a social service: at a state, municipal or private organisation. They have the right to come to those who can provide professional assistance, with full dedication, putting their soul in their work. All the other things – including technical, organisational and legal issues concerning the provision of services – is the responsibility of the state, the responsibility to properly organise the work.

We will continue to support socially oriented non-commercial organisations. Such NGOs, as a rule, bring together people who feel their civil duty and who are aware of how much mercy, attention, care and kindness mean. We should use their proposals and experience, especially when implementing social initiatives.

We must not allow discrimination of the non-governmental sector in the social sphere and eliminate all barriers to it: not only legal ones, which have been mostly abolished, but also those that persist, I mean organisational and administrative barriers. Equal access should be provided for the non-governmental sector to financial resources.

Competition is a crucial factor to boost the quality of services in the social sphere. Also, it is necessary to launch a mechanism of independent assessment of the quality of services and to ensure transparency of information on the work of agencies providing social services. I ask the Russian Popular Front, together with civic associations, to assist the reforms in the social sector.

Following next year’s results, I plan to meet with representatives of the non-governmental sector. We will discuss what changes we have succeeded in achieving lately. Overall, we should considerably expand the opportunities for dialogue, for exchange of ideas between the Government and the public, particularly the Civic Chamber and its regional branches.

These structures should be incorporated, both at the federal and regional level, into a comprehensive expert examination of draft laws and government decisions, including at the level of the so-called initial reading, which should serve as an efficient feedback mechanism.

We can see how active citizens are and what constructive efforts they are taking. Not only are they highlighting issues for the authorities to tackle, they also actively participate in settling issues and problems. They realise full well that much depends on their personal efforts. The will, deeds and generosity of these people make up the invaluable social potential of the nation.

Everyone who is prepared to take responsibility has to be involved in the implementation of the plans of developing the country, certain regions and municipalities. If the state and the public act as one, in an atmosphere of cooperation and mutual trust, success is guaranteed.

I would like to address representatives of all political parties and social forces. I am counting on our joint consolidated work. Russia’s interests demand this unity and this work.

Friends, citizens of Russia,

I will conclude my address where I began it. This year, as has been the case many times during crucial historical moments, our people have demonstrated national enthusiasm, vital endurance and patriotism. The difficulties we are facing today also create new opportunities for us. We are ready to take up any challenge and win.

Thank you.

Presidential Address to the Federal Assembly

2015-03-20T18:00:39+04:00

Vladimir Putin delivered the annual Presidential Address to the Federal Assembly.

In his Address, President Putin outlined the main areas of work, instruments and techniques to achieve Russia’s future development goals.

In the portion devoted to domestic policy, the President touched on the issue of local self-government, stressing that it is necessary to clarify the basic principles of its organisation and provide the relevant legislative support, so that local authorities become strong, independent, and financially sustainable.

Vladimir Putin emphasised that it is necessary to improve political institutions, encourage political competition and broad public debate. Russia’s federal and regional executive authorities must establish public councils, and for this a draft bill On Public Oversight is being prepared. The President referred to interethnic relations as a major theme requiring frank public discussion.

Mr Putin considers that the implementation of the May 2012 presidential executive orders – ones that contain specific measures to ensure Russia’s dynamic development in all spheres – require that the country optimise budgetary spending by eliminating inefficient spending, removing barriers inhibiting the full independence of public institutions, and creating a system for independent assessment of their performance.

The Address also touched on issues concerning the development of healthcare and education systems, and the large-scale construction of affordable housing.

In the economic portion of the Address, Mr Putin stressed the need to resume sustainable economic and labour productivity growth, in which factors such as high-quality education should be fully implicated. A flexible labour market, favourable investment climate, and modern technologies are also necessary. In particular, together with the Russian Academy of Sciences, the Government has been instructed to refine promising fields of science and technology. The President also proposed creating a National Council for Professional Qualifications, which should approve the whole range of professional standards within two years.

The President paid a great deal of attention to the agro-industrial sector, improving living and working conditions in rural areas, and establishing modern, comfortable infrastructure there.

The head of state also addressed problems associated with foreign labour migration, which is connected with social imbalances, ethnic conflicts, and rises in crime. The Address outlines specific proposals to improve the current situation, particularly via changes in the patent system, increasing the responsibility of employers, and strengthening oversight of the reasons why foreign nationals enter the country.

The President also drew attention to improving the business climate in Russia. For this purpose, a national investment climate rating will be launched in the regions in 2014, and incentives will also encourage the regions to develop their economic bases.

The President recalled that in his 2012 Address he talked about limiting the extent to which the Russian economy operates offshore, but as of yet there are few results. The Address contains a number of concrete steps to improve legislation in this area.

The development of Siberia and the Far East was a separate topic in the Address. In this respect, the President proposed, among other things, creating a network of special territories that can offer attractive conditions to non-resource industries (primarily export oriented ones). In turn, this will facilitate economic development.

The foreign policy part of the Address communicated that Russia will strive to be a global leader, defend international law, and ensure respect for the sovereignty, independence and unique identity of each people. Moreover, Russia does not aspire to be called a superpower, understanding that as a claim to world or regional hegemony.

The President described the current situation in Syria, stressing that the Syrian example reaffirmed the UN’s central role in global politics. Vladimir Putin also noted that a serious step towards resolving the Iranian nuclear problem has been taken. He also talked about preparations for the Eurasian Economic Union Treaty and the Customs Union’s expansion.

The last part of the Address was devoted to improving the Armed Forces. In particular, President Putin talked about developing new strategic missile systems for land, sea and air, developing general purpose forces, creating reserve forces, as well as the defence industry’s development.

Members of the Council of Federation, State Duma and Government, presidents of the Constitutional, Supreme and Arbitration courts, heads of the constituent entities, chairpersons of regional legislative assemblies, heads of traditional faiths, public figures, including heads of regional civic chambers, and executives of major media outlets, are in attendance at the ceremony taking place in St George Hall of the Grand Kremlin Palace

This year, the Address is being delivered on the 20^th anniversary of the Russian Constitution, which was adopted by popular vote on December 12, 1993.

* * *

President of Russia Vladimir Putin: Citizens of Russia, members of the Council of Federation and the State Duma,

The President’s state-of-the-nation annual Address to the Federal Assembly is a requirement set forth in the Russian Constitution, that which is exactly 20 years old today. I congratulate you on this important date for our state and our society. And of course, I also congratulate you on the 20^th anniversary of the Federal Assembly, Russia’s parliament, which was created in accordance with the provisions of our country’s basic law.

Our Constitution brings together two fundamental priorities – the supreme value of rights and freedoms of citizens and a strong state, emphasising their mutual obligation to respect and protect each other. I am convinced that the constitutional framework must be stable, above all in what concerns its second chapter, which defines the rights and freedoms of individuals and citizens. These provisions of our fundamental law are inviolable.

But life does not stand still, and no constitutional process can ever be regarded as finally completed or dead. Targeted amendments to other constitutional chapters, deriving from law enforcement practices and from life itself, naturally are possible and sometimes necessary.

You know that we have proposed to amend the Constitution and to unite the Supreme Court and Higher Arbitration Court. Today these courts often differ, sometimes quite substantially, in their interpretation of various laws. Sometimes they take different decisions in similar cases, and sometimes they agree. This results in legal uncertainty, and at times in injustices that affect concrete people.

I believe that unifying these courts will allow us to bring judicial practice onto one track, and therefore strengthen the guarantees protecting a crucial constitutional principle, the equality of all before the law.

Colleagues,

The Constitution contains crucial unifying national ideas.

”I am convinced that the constitutional framework must be stable, above all in what concerns its second chapter, which defines the rights and freedoms of individuals and citizens. These provisions of our fundamental law are inviolable.“

The meaning of its provisions on the welfare state consists in the mutual responsibility linking the state, society, the business community, and every Russian citizen. We must support the growing desire of citizens, representatives of public and professional associations, political parties, and the business class to participate in our country’s life.

Among other things we must support civic activism at the local level, in communities, so that people get a real opportunity to participate in managing their village or town, to deal with everyday issues that actually determine their quality of life.

Today quite a few problems have accumulated within our local self-government system. Unfortunately, and you know it well, the responsibilities incumbent on municipalities and their resources are not evenly balanced. This often leads to confusion regarding their authorities, which are not only blurred, but are constantly thrown from one level of government to another: from districts to regions, from towns to districts and back again. Local self-government authorities are being constantly shaken by corruption scandals.

The powers at the district level have been significantly watered down. Those that existed in education, healthcare, and social welfare have been transferred to the regional level of government.

In addition, local authority – because it is the closest power to the people – should be organised so that any citizen could reach out to it, figuratively speaking. In this connection I am addressing the All-Russian Council for Local Self-Government Development, All-Russian Congress of Municipalities, governors, and members of the Federal Assembly, of the Government of the Russian Federation – let’s comprehensively go over these issues again and finally bring the situation in line with common sense and attune it to the times.

Let me repeat: I think the most important task is to clarify the general principles of local self-government organisation, develop strong, independent, financially sustainable local authorities. And we need to start this work and give it sound legal foundations already next year, 2014, the year of the 150^th anniversary of the famous Zemstvo Reform of 1864.

Incidentally, at the time it was precisely the development of zemstvos, of local self-government that enabled Russia to make a breakthrough and find competent people capable of implementing major progressive reforms, including Pyotr Stolypin’s agrarian reform and the restructuring of industry during the First World War.

I am sure that today as well strong local self-government can become a powerful resource for enhancing and renewing our country’s human resource potential. And of course, we are all interested in ensuring that elections bring to power qualified, motivated, professional people who are ready to perform their duties responsibly. For this reason we shall continue to work on developing the political competition, improving political institutions, and creating conditions for them to be more open and efficient.

Recent elections demonstrated that today there is less officialdom, bureaucracy, and predictable results in our political life. I consider it important that many new parties have made their presence felt. By winning seats in municipal and regional bodies, they have laid a good foundation for participating in upcoming federal election campaigns. I am sure that they will act as worthy competitors to longstanding political actors.

Today’s Russia requires broad public debate that would yield practical results, when public initiatives become part of public policy, while society monitors their execution.

I think that all draft bills, key government decisions, and strategic plans should pass a so-called initial public reading involving NGOs and other civil society institutions.

Both the federal and regional executive authorities must establish public councils. Of course many such councils already exist within various levels of authority, but they are not everywhere. And most importantly, these councils should not be formal or decorative structures. On the contrary, they should act as expert groups, and sometimes as the government’s constructive opponents, and be active participants in anti-corruption efforts.

I would ask the Civic Chamber, the Human Rights Council and other non-governmental and human rights organisations to be actively involved in drafting the bill On Public Oversight that would establish the legal basis for such civic participation.

”Interethnic tensions are not provoked by representatives of particular nationalities, but by people devoid of culture and respect for traditions, both their own and those of others. Together we must rise to the challenge; we must safeguard interethnic peace and thus the unity of our society, the unity and integrity of the Russian state.“

Supporting the human rights movement should be a priority of joint work between the state and society. We expect that such organisations will not act in a way that is politically biased, and that they will engage as closely as possible with the interests and concerns of every citizen, every individual.

In this context, the role of the Civic Chamber is increasing. It must become a platform where various professional and social groups, associations, and unions can express their interests. More professionals should be involved in this work. I believe that members of these unions must compose at least half of the Civic Chamber’s members proposed by the President. Such an approach would balance the interests of different social and professional groups, and enable the Chamber to be more responsive to their concerns.

The most important topic requiring frank discussion in our society today is interethnic relations. This one topic concentrates many of our problems: challenges relating to socio-economic and regional development, corruption, shortcomings in the work of public institutions, and of course failures in educational and cultural policies, which often produce a distorted understanding of the true causes of interethnic tensions.

Such tensions are not provoked by representatives of particular nationalities, but by people devoid of culture and respect for traditions, both their own and those of others. They represent a kind of Amoral International, which comprises rowdy, insolent people from certain southern Russian regions, corrupt law enforcement officials who cover for ethnic mafias, so-called Russian nationalists, various kinds of separatists who are ready to turn any common tragedy into an excuse for vandalism and bloody rampage.

Together we must rise to the challenge; we must safeguard interethnic peace and thus the unity of our society, the unity and integrity of the Russian state.

Colleagues,

The May 2012 executive orders contain specific measures designed to ensure the country’s dynamic development in all fields. In fact, the orders amounted to a unified action programme, reflecting the will of millions of people, the desire of all Russian people for a better life. Sometimes we hear that there are insufficient funds to realise all stated plans and goals, that we need to lower our standards and simplify our tasks.

Colleagues, let me turn to a very important subject with profound implications. I think that it is impossible to elaborate policies following a formal approach. Yes, of course we all know that economic trends may and do change. But that is no reason to talk about revising our goals. We need to do real work, seek solutions, and clearly lay out budgetary and other priorities. I would ask you to update all state programmes accordingly.

Already within the next two years, all budgets should be changed to conform to our budget plan. This does not mean rewriting everything mechanically. It means increasing the personal responsibility of each manager for the achievement of results. What we need to do is to focus resources on achieving substantial changes in specific sectors.

For this reason we are raising salaries in education and healthcare so that the work of teachers, professors, and doctors becomes prestigious once again, and attracts strong university graduates. But as we agreed, decent wages must not only reflect budgetary transfers, but rather reforms designed to improve spending efficiency and, most importantly, the quality of social services. We need people to see how our schools, universities, clinics and hospitals are changing for the better.

Therefore, in addition to increasing salaries, which certainly needs to be done, and we will do it, we must also implement a whole set of other measures to ensure that all our objectives are met. What are those measures? They include transitioning to the use of an effective contract and the certification of specialists, as well as implementing per capita financing, when establishments (both state and private ones, which is very important) providing services of the highest quality receive special benefits. This means developing real competition, opening the public sector to NGOs and socially-oriented businesses. It certainly means optimising the budget institution network by reducing ineffective expenditures and components, and removing barriers that prevent public institutions from working independently.

What is happening with all these measures? A year and a half has passed since the executive orders were issued. You know what I’m seeing? Either things are being done in a way that elicits a negative reaction among the public, or nothing is done at all. Clearly, we will fail to achieve our stated goals with this kind of work.

It is taking us a long time to make these changes – an unacceptably long time. As a result, consumers of these services do not perceive any fundamental changes. We are allocating enormous resources, but if we do not hold reforms, instead of an improved quality, we will only see an increase in inefficient expenditures that inflate the administrative apparatus, which is what often happens in practice. I want to draw the federal and regional authorities’ attention to this.

One very important challenge is to create a system for independently appraising the quality of social institutions. This mechanism will allow their funding to be linked to their performance, which means effectively optimising the budget institution network.

I believe that we need direct application laws that will establish common approaches, standards and criteria, as well as responsibilities at all levels of government, to create a system for independently appraising the performance of organisations in the social sector. I am asking you to adopt a corresponding law in the upcoming spring session. Colleagues, this is an urgent request.

”We need schools that do more than just teach; teaching is very important –most important, in fact – but we also need schools to help our nation’s citizens form their identity, absorbing the nation’s values, history and traditions. We need open-minded individuals with a strong internalised knowledge of culture, capable of thinking creatively and independently.“

In recent years, we have been able to achieve a great deal in the healthcare sector. Life expectancy has gone up. Mortality from cardiovascular and many other types of diseases has gone down. However, we are still far from our target indicators.

The big question that remains is a realistic approach to the insurance principle in healthcare. Today, the function of mandatory health insurance is essentially to “pump money” to the recipient through the extra-budgetary fund rather than the budget. The objective is entirely different. The objective is for the insurance principle to work as an incentive for people to take responsibility for their health, to have financial incentives to live a healthy lifestyle, and for insurance companies to be interested in medical institutions providing high-quality services, so that a patient finally has the opportunity to select the medical institution that, in his or her opinion, works best.

The mandatory health insurance system should fully financially cover state guarantees for providing free medical assistance. This applies equally to the total spending volume and directing funding to a specific hospital or clinic. At the same time, the patient should clearly understand which healthcare services he or she is entitled to receive free of charge, and the doctor should understand the principles upon which his or her work is paid.

Particular emphasis should be placed on developing a preventive treatment system. Beginning in 2015, all children and teenagers must have a yearly mandatory free medical check-up, while adults should undergo such an examination every three years.

Clearly, there will be an increase in disease detection during routine medical examinations, and the need for high-tech medical care will grow. In recent years, we have created a whole network of federal centres, supporting ones that are located in major cities, but also creating a new federal network of centres capable of providing medical assistance at the most advanced level. We need to maintain and develop their potential. At the same time, services at these centres must be accessible not just to the residents of the cities where they are located, but also residents of other regions. We must provide the necessary financial resources for that.

On the whole, over the next three years, we must create the conditions to perform 50% more high-tech operations than today. This is an entirely achievable goal. At the same time, we cannot fall behind the global trends. Leading nations already stand at the threshold of implementing medical technologies built on bio- and genetic engineering, based on the human genome sequence. This will truly revolutionise medicine. I believe that the Healthcare Ministry and the Russian Academy of Sciences should make fundamental and applied medical research a priority.

We must greatly increase the professional community’s role in managing the healthcare system. I am aware that there are some ideas in this area that deserve support. I am asking the Health Ministry to work with leading healthcare worker associations to submit concrete proposals.

We must also revive our traditions of charity. I propose that we organise a nationwide movement for volunteers who want to work within the healthcare system, providing what assistance they can. I believe that volunteers who have spent several years working in healthcare institutions should have priority admission to medical schools.

Colleagues,

The year 2014 has been declared the Year of Culture in Russia. It is intended to be a year of enlightenment, emphasis on our cultural roots, patriotism, values and ethics.

We are aware of the all-encompassing, unifying role of Russian culture, history and language for our multi-ethnic population, and we must build our state policy with this in mind, including in education.

We need schools that do more than just teach; teaching is very important –most important, in fact – but we also need schools to help our nation’s citizens form their identity, absorbing the nation’s values, history and traditions. We need open-minded individuals with a strong internalised knowledge of culture, capable of thinking creatively and independently.

Instructions have already been given that starting from the next academic year, a mandatory essay-based final exam will be introduced for graduating high school students. The results of this exam will be taken into consideration alongside the National Final School Exam when applying to universities and other educational institutions.

Teachers’ professional development will be crucial to the future of Russian schools. Teachers must be ready to use modern technology and know how to work with children that have health-related disabilities. I ask you to prepare an integrated programme for upgrading school staff. I know that the Education Ministry is already working on this, and is developing a system of life-long training and professional development for teachers. We must complete the work on this programme.

There is another problem that requires urgent resolution. Even today, many schools operate with two shifts. This is true for nearly one quarter of Russian schools, and nearly half of schools in cities use this system. Thanks to positive demographic growth, the number of students in Russian schools will grow by a million in the next five to six years.

I ask the Cabinet, the Federal Assembly and regional authorities: we must assess the scale of this problem and provide effective solutions, which should include building preschools in such a way that in the future, they can be used as elementary schools as well.

This should not lead to an increase in the cost of preschool construction projects. We can consider the option of building schools and preschools under one roof, as a single campus.

Of course, let me stipulate that this is not the federal government’s responsibility. This responsibility falls on the regional and even local authorities. Nevertheless, we need to understand the scale of the problem. We cannot brush it aside. If it has enormous significance for our nation and takes on these forms, I do not think we will be able to address it without federal support.

Naturally, we must continue developing a wide array of sports infrastructure for children and teenagers. We must do everything to increase the popularity of active lifestyles. Indeed, that was the main idea behind the Universiade that was successfully held in Kazan and the Olympic Games in Sochi, which will open very soon.

I am confident that we will do an excellent job of organising the Olympics in Sochi, the 2018 FIFA World Cup and the Winter Universiade in Krasnoyarsk.

Colleagues,

The statistics from January through October of this year show that Russia has experienced natural population growth. This is the first time we are seeing such results since 1991, and it is a very positive indicator.

”We need to put order in the procedures for employing foreign nationals who have visa-free entry to Russia, and increase employers’ responsibility for employing foreign workers. Russia must be able to know why people are coming, and how long they plan to stay. ”

The birth rate exceeded mortality in almost half of Russia’s regions, and it surpassed the national average in all regions in the Urals and Siberia, and most Volga and Far Eastern regions.

But we need to understand something else as well. Right now, the generation born in the 1990s is beginning to start families of their own – this is the generation from the time when the decline in birth rates was the greatest, when it was catastrophic. We must make a special effort to ensure that the positive population growth remains irreversible.

I remind you that the birth rate in our country reached one of its highest figures in the late 1980s. Housing construction also peaked at this time. Today, housing construction must once again play a decisive part in encouraging population growth in Russia.

The Government has already drafted the policy measures needed to implement the programme for building affordable housing. This programme will see the construction of at least 25 million square metres of new housing, complete with the corresponding social infrastructure, by 2017, so that middle-income families can improve their housing situation. I propose that we call this programme Housing for Russia’s Families, so as to focus attention on this side of the issue.

Overall, by 2016, we will need to pass the 75-million square-metre mark, which is higher than the record set in 1987, when 72.8 million square metres of housing were built. Modern technology allows us to build a lot of relatively cheap and quality housing, but there are several problems we need to resolve on the way.

Above all, we need to finally make all the legal amendments that will clear the way for making land plots available for housing construction. This must be done within the coming months. This is a subject we are always discussing, and we have come back to this issue many times over these last weeks.

The local government authorities will have the task of organising bids for land plots under clear and transparent procedures. Developers will also have greater responsibility: if they receive the land but do not begin construction according to schedule, they will have to return the land.

Another barrier that is holding back construction is the lack of funds for providing land plots with the necessary engineering infrastructure. We will need to develop specially-designed instruments to resolve this and work out the financing sources and organisational form.

I know that at the tax authorities’ initiative the Government is drafting proposals on bringing order to online trade. This could also become a source of funding for developing engineering infrastructure. I ask you to make proposals on this matter.

Finally, we need to put the situation with permit procedures in order. These procedures are still not standardised. I ask you to draft a single and exhaustive list of all permits required for construction and reduce the time it takes to go through the necessary procedures as much as possible. I would like you to do this by the end of March 2014.

We all know why this work is not making progress and why problems have not been settled to this day. It is because there is a lot of corruption in this sector. This is where the root of the problem lies.

Colleagues,

We all know that renewed, sustained economic growth is the essential condition for achieving our social development goals. This brings me to the heart of our work.

Of course we are feeling the effects of the global economic crisis, but let’s be frank: the main reasons for the slowdown in our economy are internal rather than external in nature.

In terms of the size of its GDP, Russia is doing well and counts among the world’s five biggest economies. But in key indicators such as labour productivity, there is a two- to three-fold gap between us and the developed economies. We must work hard to close this gap.

To do this, we must make full use of all new development factors. What are these factors? We all know them well. They include high quality professional education and a flexible labour market, a good investment climate and modern technology.

I ask the Government, together with the Russian Academy of Sciences, to make adjustments to the programme of priority areas for science and technology development. The recently created Russian Scientific Fund will also need to organise its work in line with these priorities. The Fund’s purpose is to finance fundamental research and programmes with a long-term implementation timeframe. I consider this work to be of national importance.

The leaders of the parliamentary parties voiced their proposals on taking part in Russia’s innovative development at recent meetings held in preparation for today’s Address. You all voted for the law that established the Russian Scientific Fund. I propose that all of the parliamentary parties send their representatives to the Russian Scientific Fund’s Board of Trustees.

As for applied research, it should be based around technology platforms. I propose that targeted programmes such as Research and Development in Priority Science and Technology Fields refocus their funding on supporting this kind of applied research. It is also important at the same time to ensure co-financing of projects from state and private sector sources.

At the moment, only one out of every 265 scientific results obtained becomes protected by the law. Added-value contribution to Russia’s GDP from intellectual property turnover comes to less than 1 percent. This is not just a low figure – it is a very paltry figure indeed. In the United States, this figure is 12 percent, in Germany 7–8 percent, and in Finland, our neighbour, it is 20 percent. Technology platforms must therefore focus on concrete results, getting patents and licenses, and getting their developments into actual practical use.

We must develop internal demand for advanced technology. It is absolutely crucial to have demand for advanced technology from within the country. We must use the public procurement system and state company investment programmes to help encourage this demand. These sources represent a lot of money, trillions of roubles.

We must also carry out a thorough stock-taking of our development institutions. Their activities have become fragmented of late between numerous disparate projects that are not always directly related to innovation. That was not our objective when we established these development institutions. This is not to say that these projects are without merit, but the institutions were set up specifically to support the economy’s innovation development. We must reset their strategic focus back on technology breakthroughs.

In order to rid our economy of outdated, inefficient and harmful technology, we must finally put together a modern technical and environmental regulation system. This is a very complicated and sensitive matter for the economy. I hope that the Government will work energetically together with the business community and with our colleagues in the Customs Union to carry out this work.

I also propose that we establish a statistical evaluation system for the technology situation in the different economic sectors so as to gain an objective picture of our competitiveness. A system of this kind worked during the Soviet period. That old system was scrapped, but nothing was developed in its place. We now need to develop a new system.

”Russia’s reorientation toward the Pacific Ocean and the dynamic development in all our eastern territories will not only open up new economic opportunities and new horizons, but also provide additional instruments for an active foreign policy.“

The next task is support for the non-raw materials export sectors. This support system has still not begun working in full. Many administrative barriers remain in place. It takes more than 20 days to get an export permit. In comparison, it takes 6 days in the United States, and in Canada or South Korea it takes 8 days. These are all issues that need to be addressed in a new roadmap for supporting exports. I ask the Government, together with the Strategic Initiatives Agency, to draft this roadmap by March 1, 2014.

Colleagues, new professional standards play a crucial part in quality economic development. These standards must set the qualification demands that professionals in the different sectors should meet. But they will work only if they meet the demands of business itself, and they must therefore be developed with the professional communities’ involvement. I propose establishing a National Professional Qualifications Council. Rather than being attached to a government body, it would be a truly independent organisation. The main business organisations and professional associations should be involved in its work. Over a two-year period, this council will have the task of approving the entire package of new professional standards.

I ask our colleagues from the business community and from the associations I just mentioned not to shirk their part in this work. After all, it is in your own interests to get involved.

The entire professional education system should be reorganised so as to fit with the new standards and their demands. There is much in our own experience that we can draw on here, updating it for today’s needs. I am thinking here of things such as professional and workplace-related training right from school and technical higher education centres set up by big industrial companies. The main principle is to have on-the-job training so that theory is reinforced by practical skills and experience.

A few words separately on the subject of higher education, most young people want to get higher education, and the quality of our universities must measure up to this demand. Only in this way can we really turn our young people’s education drive into a powerful force for our country’s development. But today, both in the capitals and in the regions, there are still many universities that do not meet modern demands.

I think that in order to reinvigorate the entire higher education system, we must make use of our best universities’ potential by delegating to them the power to evaluate education quality and help to ensure that graduates’ knowledge and skills will be needed in the labour market and will bring our economy and society real returns.

In no circumstances must we create barriers for educational mobility. This also concerns the cost of student residences. The prices here should not be excessive in any way, but must be directly linked to the living conditions and services provided. I ask the Ministry of Education and Science and the student organisations to strictly monitor the situation here. It is unacceptable to set exorbitant prices for student accommodation.

A word of warning to university rectors in this respect: the situation will soon reach a point where the Finance Ministry will look at your revenues and will lower the norms accordingly. This is what you will end up with, and education, students and the universities will all suffer as a result.

We must also make a much greater effort to export quality education services and create conditions for having foreign students and our compatriots abroad, especially from the CIS countries, to study in Russian universities. This is something that can play a very big part in strengthening Russia’s cultural and intellectual influence in the world.

Over this coming period we must settle the matter of mutual recognition of school diplomas within the CIS and also examine the matter (as a proposal) of setting up centres for sitting the Russian National Final School Exam in accordance with Russia’s standards in the CIS countries, at Russian language centres, for example. These exams would be held at the same time as the National Final School Exam takes place in Russia’s schools. This would give talented young people from the CIS greater opportunities for coming to study at Russia’s universities.

Finally, we need to speed up the adoption of laws that would enable Russian universities to actively develop distance learning, which would also be aimed above all at our compatriots abroad and at the CIS countries.

As we improve professional education, we must remember that the labour market is becoming more flexible and people need to have possibilities for re-training and getting a new professional start in life. We must provide the right conditions for people who are willing to change jobs or move to a different town or region. Of course, this needs to be coordinated with our regional and local development plans, and working together with business.

We must give people information support, including by setting up a national job database, so that people everywhere can see in which region they might find a good job. This requires a whole series of decisions. I ask you to draft these measures, including those on rental housing and so forth. You know what sorts of issues I am talking about. The list is long. This work can and must be carried out as soon as possible.

”We do not claim to be any sort of superpower with a claim to global or regional hegemony; we do not encroach on anyone’s interests, impose our patronage onto anyone, or try to teach others how to live their lives. But we will strive to be leaders, defending international law, striving for respect and national sovereignty and peoples’ independence and identity.“

The second task is to make the countryside a more attractive place for life and work. We have already invested considerable money in developing the agriculture sector. The sector is showing a positive dynamic now. In many areas we can now fully cover domestic demand with Russian-produced goods. I want to thank our rural population for their work and the results they have achieved.

The big task now is to encourage people to stay in the countryside and build a modern and comfortable infrastructure in rural areas. I ask you to pay particular attention to this issue when making changes to the state agriculture development programme.

I would like to say a few words about the situation in single-industry towns. They are part of the complicated legacy we inherited from the Soviet economy. These towns are home to more than 15 million people. Many of them are in a difficult situation, but these towns do have an excellent base: social infrastructure, housing and a skilled labour force. We need to identify what is stopping business from coming here, what incentives and conditions we can offer so that investors will come to these towns not under pressure, but because they see real opportunities for themselves there. Believe me, it is better to resolve things this way than to end up pumping tens of billions from the budget later into job creation there, which is what we will end up having to do if we do not properly address the situation now.

I therefore ask you to draft proposals on comprehensive development in the single-industry towns, investment projects that can be carried out there, and proposed financing sources, as well as proposals on reducing labour market tension and targeted support for small and medium business.

In this respect, I want to say to all of the regional heads that we are aware of the constraints that regional budgets face, but we do need to look beyond our immediate problems too.

The proposal has already been made – and I support it – that all regions could offer two-year tax holidays to new small businesses working in the manufacturing, social or scientific sectors (applause). Probably not all of the governors are applauding, but I want to say that carrying out this kind of idea today would bring dividends tomorrow in the form of additional revenue for the regions and municipalities. These would be new businesses. They do not even exist at present, and so we are not talking about any loss in budget revenue here. On the contrary, if we create the conditions for these new businesses, we will create revenue too.

We also need to make it possible for small businesses and individual entrepreneurs to pay their taxes and insurance payments using the ‘one window’ system. These are different payments, but we need to make it possible for them to be paid at a single place and time.

Another complicated problem related to the labour market is foreign labour migration. The lack of proper order in this sector creates labour market distortions, causes imbalances in the social sector, provokes ethnic conflicts, and leads to higher crime rates.

We need to put order in the procedures for employing foreign nationals who have visa-free entry to Russia, and increase employers’ responsibility for employing foreign workers. Of course, if these people are living and working in Russia and using our country’s education and healthcare services, they must also take on their share of obligations and pay their taxes and other payments.

The task is not an easy one. We must preserve our special ties with the former Soviet republics, but at the same time we also need to put the situation in order. I think that in this context we should change the current license system. Foreign workers currently need to acquire a license if they are employed by a private individual. I propose that legal entities and individual entrepreneurs should also have the possibility of hiring foreign workers on a license basis. The license’s cost would be set by the particular region depending on the situation on the region’s labour market and the average income there. The license system should be differentiated and encourage above all professionals, educated specialists, who speak Russian and have an affinity for our culture to come to work in Russia. I stress too that licenses would be valid only in the region where they were issued.

I hope that if we organise this work competently, it will be an economic instrument that can help us regulate the migration flow. I call it an economic instrument because of the differing cost the licenses would have from one region to another in Russia.

Finally, we need to establish tighter scrutiny of the purpose foreign nationals declare when entering Russia. All civilised countries do this. Russia must be able to know why people are coming, and how long they plan to stay. We also need to settle the issue of foreigners who enter Russia under visa-free travel arrangements and without any specific purpose. At least they supposedly have no specific purpose, though in actual fact they probably do have a purpose, but the authorities know nothing about it. Their time in the country should be limited, and entry into Russia should be prohibited for people who have broken the immigration rules. Depending on the seriousness of the violation, entry should be prohibited to enter the country for 3–10 years.

These measures would set an additional barrier for foreign citizens who are working in the shadow economy or are even engaged in criminal activity, or who are working illegally, often in inhuman conditions, and who, sadly, themselves become the victims of criminals.

Colleagues,

Two years ago, together with the business community, we began systematic work to improve Russia’s investment climate. I can say that we have already achieved some good results. Perhaps not many people believed that we would actually achieve these results, but they are there. Now we must go further. By 2015, we must have completed the main work to put in place the laws and regulatory base that will make it attractive and easy to do business in Russia.

For this reason, starting next year, we will publish a national rating of the investment climate situation in the different regions. This will essentially be an instrument for evaluating the national business initiative’s implementation in each of the country’s regions.

At the same time, we need to create incentives for regions that are developing their economic base and that have made it their mission to support business initiative and create new production facilities and jobs.

Let me announce a piece of good news for the regional governors. Regions that invest in developing industrial and technology parks and business incubators will have the federal taxes paid by their resident companies returned for three years to the regional budgets in the form of inter-budgetary transfers. Let me stress that this will be within the limits of the region’s expenses for building the infrastructure for these sites.

There is nothing to laugh about here! This is a good proposal. It was the result of long and exhausting discussions with the Finance Ministry. I ask the Finance Minister not to water down these agreements, but to give them your full attention and carry them out.

One issue that is still a sensitive matter for businesspeople is excess attention from various inspectors. Inspections and checks are necessary, but the work to change the principles on which the oversight and inspection agencies carry out their work must continue.

”No one should entertain any illusions about achieving military superiority over Russia; we will never allow it. Russia will respond to all these challenges, both political and technological. We have all we need in order to do so.“

This work is still ongoing and it must continue. To make this area more transparent, I propose that we set up a unified federal portal, where every check and inspection will be given an individual number and it will be clear immediately who initiated each investigation, who was inspected, on what grounds the inspectors carried out their investigations, and, most important, what results the investigations produced.

Let me note another problem too, namely, that our mechanisms for settling economic disputes are still a long way behind the best global practices. In this context, we also need to make a serious effort to raise the arbitration courts’ authority.

I ask the Government, together with the Russian Union of Industrialists and Entrepreneurs and the Chamber of Commerce and Industry, to draw up a draft law on fundamental improvements to the arbitration system and submit it to the State Duma as soon as possible.

In last year’s Address, I spoke about the challenges in relieving the economy of offshore activity. This is another topic to which I want to draw your attention and which we must return to today.

Why is that? I will tell you frankly that so far, the results are barely perceptible. Let me remind you about a major transaction that took place this year, worth over $50 billion. The sale of TNK-BP shares occurred outside of Russia’s jurisdiction, although we all know that the sellers were Russian nationals, and the buyer was one of Russia’s largest companies.

Last year, according to expert assessments, $111 billion worth of Russian goods passed through offshores and partial offshores – that’s 20% of our exports. Half of the $50 billion of Russian investments abroad also went to offshores. These figures represent the withdrawal of capital that should be working in Russia and direct losses to the nation’s budget.

Since nothing significant has been achieved in this area this year, I want to make the following suggestions.

The incomes of companies that are registered in offshore jurisdictions and belong to Russian owners or whose ultimate beneficiaries are Russian nationals must follow Russian tax laws, and tax payments must be made to the Russian budget. We must think through a system for how to collect that money.

Such methods exist and there is nothing unusual here. Some countries have already implemented such a system: if you want to use offshores, go ahead, but the money has to come here. It is being implemented in countries with developed market economies, and this approach is working.

Moreover, companies that are registered in a foreign jurisdiction will not be allowed to make use of government support measures, including Vnesheconombank credits and state guarantees. These companies should also lose the right to fulfil government contracts and contracts for agencies with government participation.

In other words, if you want to take advantage of the benefits and support provided by the state and make a profit working in Russia, you must register in the Russian Federation’s jurisdiction.

We must increase the transparency of our economy. It is imperative to introduce criminal liability for executives who knowingly provide false or incomplete information about the true state of banks, insurance companies, pension funds and other financial institutions.

We need to maintain our fundamental, firm position on ridding our credit and financial system of various types of money laundering operations. Meanwhile, the interests of honest clients and depositors in problematic banks should be securely protected.

Today, the fight against the erosion of the tax base and the use of various offshore schemes is a global trend. These issues are widely discussed at the G8 and G20 summits, and Russia will conduct this policy at both an international and national level.

The need for liability fully applies not only to private businesses, but executives at state-controlled companies and development institutions as well. I propose that the Government should radically change the principles of its work; there should not be any executive comfort zones here. They are paid very good money. We will not achieve much economic progress if we undermine them; we will not be able to employ the professionals we need. But we must establish supervision over their work, and we must do it the right way.

All such organisations must develop their own long-term strategies, which should state clear goals and personal responsibility indicators for their leadership. Executives’ employment agreements must stipulate liability for failure to fulfil the set objectives, including financial liability.

Company programmes for corporations included in the strategic enterprise list must be approved by the Government of the Russian Federation, and their implementation should undergo an external audit. I looked at the list yesterday: there are several dozen such companies. We have several lists, but the list of strategic enterprises includes only several dozen. Of course, this means an additional workload, but I am confident that the Government will rise up to this challenge.

I will stress again that government and private sector resources should go toward development and achieving strategic objectives. For example, let’s look at such objectives as developing Siberia and the Far East. This is our national priority for the entire 21^st century. The challenges we will need to tackle are unprecedented in their scale, which means we must take unconventional approaches.

We have already made a decision on a reduced income tax rate and a number of other taxes for new investment projects in the Far East. I feel it would be expedient to expand this regime to all of Eastern Siberia, including Krasnoyarsk Territory and the Republic of Khakassia.

Moreover, I suggest creating a network of special advanced economic development zones in the Far East and Eastern Siberia with special conditions for organising non-extractive production, including that intended for export. New companies located in such zones, in such territories, should be provided with five-year exemptions for income tax, mineral extraction tax (with the exception of oil and gas, which is a profitable sector), land and property taxes, as well as preferential insurance rates, which are very important for high-tech manufacturing.

What’s also important is to create conditions here that will be competitive with key business centres of the Asia-Pacific region. Such conditions should apply to authorisation procedures for construction, connecting to electricity networks, and passing through customs. We will make active use of the Far East Development Fund in order to resolve infrastructure issues in these territories.

We will need to decide on the exact location of these territories by July 1, 2014, and adopt all the legal regulatory acts necessary for them to operate. Given the importance and scale of this endeavour, I am asking the Prime Minister to personally supervise this work. In the future, we will make decisions about their future development based on the experience and practice of working in such zones and the resulting effect.

We will also continue the projects already being implemented at this time. As you know, a new university has been established on Russky Island. It will conduct a sound scientific evaluation with regard to Far East development programmes, and provide for the region’s employment needs, first and foremost in areas such as space, biotechnology, robotic technologies, design, engineering, oceanography and the use of marine resources.

I am confident that Russia’s reorientation toward the Pacific Ocean and the dynamic development in all our eastern territories will not only open up new economic opportunities and new horizons, but also provide additional instruments for an active foreign policy.

Colleagues, global development is becoming increasingly contradictory and dynamic. Russia’s historical responsibility is growing in these conditions, not only because it is one of the key guarantors of global and regional stability, but also a nation that consistently asserts its value-based approaches, including in international relations.

The intensity of military, political, economic, and informational competition throughout the world is not decreasing, but only getting stronger. Other power centres are closely monitoring Russia’s progress as it grows stronger.

We have always been proud of our nation. But we do not claim to be any sort of superpower with a claim to global or regional hegemony; we do not encroach on anyone’s interests, impose our patronage onto anyone, or try to teach others how to live their lives. But we will strive to be leaders, defending international law, striving for respect and national sovereignty and peoples’ independence and identity. This is absolutely objective and understandable for a state like Russia, with its great history and culture, with many centuries of experience, not so-called tolerance, neutered and barren, but the actual common, natural life of different peoples within the framework of a single state.

Today, many nations are revising their moral values and ethical norms, eroding ethnic traditions and differences between peoples and cultures. Society is now required not only to recognise everyone’s right to the freedom of consciousness, political views and privacy, but also to accept without question the equality of good and evil, strange as it seems, concepts that are opposite in meaning. This destruction of traditional values from above not only leads to negative consequences for society, but is also essentially anti-democratic, since it is carried out on the basis of abstract, speculative ideas, contrary to the will of the majority, which does not accept the changes occurring or the proposed revision of values.

We know that there are more and more people in the world who support our position on defending traditional values that have made up the spiritual and moral foundation of civilisation in every nation for thousands of years: the values of traditional families, real human life, including religious life, not just material existence but also spirituality, the values of humanism and global diversity.

Of course, this is a conservative position. But speaking in the words of Nikolai Berdyaev, the point of conservatism is not that it prevents movement forward and upward, but that it prevents movement backward and downward, into chaotic darkness and a return to a primitive state.

In recent years, we have seen how attempts to push supposedly more progressive development models onto other nations actually resulted in regression, barbarity and extensive bloodshed. This happened in many Middle Eastern and North African countries. This dramatic situation unfolded in Syria.

As far as Syria is concerned, the international community had to jointly make a momentous choice: to either descend into further erosion of the world order’s foundations, or collectively make responsible decisions.

I feel it was our common success when the choice was made on the basis of the fundamental principles of international law, common sense and the logic of peace. So far, at least, we have been able to avoid external military intervention in Syria’s affairs and the spread of the conflict far beyond the region.

Russia made significant contributions to this process. We acted firmly, thoughtfully and carefully. We never jeopardised our own interests and security, nor global stability. In my view, that is how a mature and responsible nation must act.

As a result, together with our partners, we managed to steer the course of events away from war and toward establishing a nationwide political process and civil consensus in Syria. Syria’s chemical weapons arsenal is now under international control. Its liquidation is an important step in strengthening non-proliferation regimes for weapons of mass destruction. The Syrian precedent confirmed the UN’s central role in global politics.

The Syrian crisis, and now the situation in Iran as well, clearly demonstrate that any international problem can and should be resolved exclusively through political means, without resorting to forceful actions with little potential that are rejected by most nations in the world.

This year, we saw a breakthrough with the Iranian nuclear programme, but it was only the first step. It is imperative to continue patiently searching for a broader solution that will guarantee Iran’s inalienable right to develop peaceful nuclear energy and – I want to stress this – security for all countries in the region, including Israel.

Incidentally, it was Iran’s nuclear programme that once served as the main argument in favour of deploying a missile defence system. So what is happening now? The Iranian nuclear issue is being resolved, but the missile defence system remains. And it doesn’t just remain, it is being developed further. But I will talk about that a little later.

I want to stress again: Russia is prepared for joint efforts with all partners in the interest of ensuring common, equal, indivisible security.

Russia’s G8 presidency in 2014 will focus on acute global problems: strengthening non-proliferation regimes, combating international terrorism and drug trafficking. We will also act in accordance with these principles when preparing to host the BRICS and Shanghai Cooperation Organisation (SCO) summits in 2015.

We are now entering a crucial stage in preparing the Eurasian Economic Union Treaty. We expect to have agreed on the Treaty’s text by May 1, 2014 and to have submitted it to the Russian, Belarusian and Kazakhstani parliaments by that time. Colleagues, I would ask you to prioritise this document and give it your consideration and support.

Let me add that working groups are currently preparing roadmaps governing the accession of Kyrgyzstan and Armenia to the Customs Union. I am sure that the real achievements of Eurasian integration will only enhance our other neighbours’ interest in it, including that of our Ukrainian partners.

Even before all these protests that we are now witnessing in Kiev – and I very much hope that the country’s political forces will be able to negotiate and resolve Ukraine’s accumulated problems in the interests of its citizens – before all these problems began, starting in May Ukraine has expressed its desire to be present at all meetings between Russia, Belarus and Kazakhstan as an observer. Ukraine participates in discussions and has repeatedly declared its interest in joining some of the Customs Union’s agreements.

We are not imposing anything on anybody. But if our friends want to work together, then we are ready to continue this work at the expert level.

Our integration project is based on equal rights and on real economic interests. We will consistently promote the Eurasian process, without setting it against other integration projects including the more mature European one. We proceed from our complementarity and naturally we will continue to work with our European friends on a new basic agreement.

Colleagues,

A few words about our actions to further strengthen our Armed Forces.

I just mentioned the issue of missile defence, and here’s what I would like to say in this regard. We are all perfectly aware that the missile defence system is defensive in name only. In fact, it is a crucial component of strategic offensive capabilities. The development of new weapons systems, such as low-yield nuclear weapons, strategic non-nuclear missiles and hypersonic high-precision non-nuclear systems for prompt, long-range strikes are also causes for concern.

We are closely following the development of the so-called Prompt Global Strike system, which is being actively developed by some countries. Implementing all of these plans could have extremely negative consequences for regional and global stability.

The ramping up of high-precision strategic non-nuclear systems by other countries, in combination with the build-up of missile defence capabilities, could negate all previous agreements on the limitation and reduction of strategic nuclear weapons, and disrupt the strategic balance of power.

We understand this very well, and in this context we know exactly what we need to do. No one should entertain any illusions about achieving military superiority over Russia; we will never allow it. Russia will respond to all these challenges, both political and technological. We have all we need in order to do so.

Our military doctrine and advanced weapons, weapons that are being and will be deployed, will unconditionally allow us to ensure the security of the Russian state.

We still have a lot to do to develop modern high-precision weapons systems. At the same time, judged by qualitative parameters for modern strategic nuclear deterrent forces, today we are successfully reaching new milestones on schedule, and some of our partners will have to catch up.

We are developing new strategic missile systems for land, sea and air to further strengthen our nuclear forces. We will continue to strengthen our strategic missile forces and continue building a fleet of nuclear submarines. We are also starting work on a promising long-range aviation system.

The establishment of a global intelligence network is the next step on our agenda. The formation of an integrated, real-time global network for reconnaissance and targeting, which will operate in a single informational space in the interests of the Armed Forces of the Russian Federation, is extremely important. This is connected with additions to our satellite group.

We will continue to develop our general purpose forces: aviation, the navy and the land forces. This year in keeping with our plans, the number of privates and sergeants under contract increased to 220,000. At the same time we have to think how to create highly trained reserve forces.

There is another suggestion in this regard: keeping deferrals for students and changing the very system of military training offered by institutions of higher education. This will enable all students to study, receive military training for their next military assignment and a particular area of military specialisation.

This mechanism will allow us to train the right amount of reservists for the most needed, primarily technical military specialisations, while not drafting them into the Armed Forces. I would ask the Government and the Security Council to submit concrete proposals for how such a system could be organised.

Next. As you know, the funds we are allocating for rearming the Army and the Navy, for modernising the defence industry are unprecedented. They total 23 trillion rubles [more than $700 billion].

In the next decade, our defence companies will be fully loaded with orders. They will be able to upgrade their manufacturing base and create high-quality jobs. Let me recall that in Russia about two million people work in the defence industry. Together with their families, the number comes to almost seven million people. And specialists in this sector will have stable, well-paid jobs, and their families will be provided for.

Now we have to think about what the defence industry’s companies will do after having fulfilled the state defence procurement order, after 2020. We cannot allow them to become obsolete.

We need to strengthen our position in global markets. I would ask the Military-Industrial Commission to submit proposals in this regard, to ensure that our businesses can promptly switch to releasing in-demand civilian products onto both our domestic market and foreign ones.

There’s another point I would like to emphasise. We said that all Defence Ministry servicemen who began their service before January 1, 2012 would receive permanent housing by the end of this year. This task should be fully completed in the near future, and it will be. I would draw the Defence Ministry’s attention to this and ask you to deal with the issue on a case-by-case basis, helping people choose the best option for them.

Colleagues,

For the first time in our country’s history, we are turning the page on the issue of permanent housing for servicemen in Russia’s Army and Navy. Now we can concentrate on completing the construction of modern service housing and comfortable military bases.

Colleagues,

A sense of responsibility for the country is the main theme, lifeblood, and core value of the Russian Constitution, and it is also a call to each of us.

The nation’s strategic development agenda is well-known; this Address has outlined main areas of work and ways to achieve specific goals.

Everything that has been stated here must be executed without any reservations, new suggestions or bureaucratic interpretations. This is what the authorities’ most important and most notable task consists in.

It is our duty to increase people’s trust. Only in this way will we be able to increase the activity of our citizens, and people will want to contribute to our country’s development.

Let me repeat that if a decision has been made, then it must be implemented. I consider this approach to be a concise expression of shared responsibility, and would suggest making this the motto of the coming year, a motto for everyone: for the government, for society, for citizens.

I am absolutely convinced that by drawing on the best traditions of our people, by using the latest ideas and most effective development paths, we will meet all the challenges we face and guarantee our success.

Thank you for your attention.

Address to the Federal Assembly

2015-03-20T18:01:11+04:00

Vladimir Putin made annual Presidential Address to the Federal Assembly of the Russian Federation which outlines priority targets for national political and economic development.

The event took place in St George Hall of the Grand Kremlin Palace and was attended by the members of the Council of Federation, State Duma and Government, Presidents of the Constitutional, Supreme and Higher Arbitration Court, heads of the constitutional entities, chairpersons of regional legislative assemblies, heads of traditional faiths, public figures and executives of major media outlets.

The President highlighted several fundamental issues that are vitally important for Russia’s present and future.

Vladimir Putin stressed that the coming years will be decisive and perhaps even ground-breaking not only for Russia, but also for the entire world, which is entering an era of dramatic changes and possibly even shocks. Global development is becoming increasingly unequal, which may give rise to new economic, geopolitical and ethnic conflicts. Competition for resources is becoming tougher and a great deal will depend not only on the economic potential but also on the will of each nation, its internal energy and ability to move forward and change.

In the 21^st century Russia must be a sovereign and influential nation amid a new balance of economic, civilisational and military forces. It must not only develop with confidence, but also preserve its national and spiritual identity, its sense of national unity. In this regard, the President noted the rise of civic engagement in the country. Vladimir Putin sees civil responsibility and patriotism as a consolidating force behind Russian politics.

Next, the head of state focused on addressing demographic issues, noting that demographic programmes adopted in the past decade have been effective. The country's population has not only stabilised but also began to grow. The President outlined the main directions of further growth, including the creation and implementation of regional demographic programmes. He believes families with three children should become the standard in Russia.

The President also touched on the issue of creating quality new jobs that will be the driving force behind growth of wages and wellbeing, the revival of engineering schools and professional training.

Speaking of the social sphere, which employs highly educated and qualified people, the so-called creative class of doctors, school and university teaching staff, scientists and culture professionals, Vladimir Putin recalled that the Presidential executive orders he signed in May stipulate wage increase for each category of employees in these fields, and instructed the heads of the federal and regional authorities to mobilise all available resources to achieve this goal.

It is also necessary, the President stressed, to strengthen the spiritual and moral fabric of society. Issues of secondary education, culture and youth policy take on special importance in this regard as they are responsible for shaping a balanced, moral and responsible citizen of Russia. It is essential to give every support to the institutions that have enshrined our traditional values and have historically proven their ability to pass them on from generation to generation.

The President spoke about the revival of national consciousness, the development of Russia as a multinational state and the inadmissibility of any manifestations of nationalism and chauvinism, which cause the greatest damage to the nation and the ethnic group whose interests the nationalists claim to be defending. Vladimir Putin made several proposals in the field of immigration policy, including on such issues as granting Russian citizenship and the fight against illegal immigration, as well as the development of distance education in Russian that would be available to everyone in the world.

Democracy is the only political choice for Russia, the President said. But Russian democracy is the power of the Russian people, with their own traditions of self-rule, and not the fulfilment of standards imposed on us from the outside. The framework of the state and society must not be affected, the continuity of national development must not be disrupted, national sovereignty and the rights and freedoms of our citizens must never be questioned. Moreover, democracy is the ability not only to choose the government, but also to constantly monitor the government and evaluate the results of its work.

In his Address, the President formulated a set of rules of fair political competition.

Russia is characterised by a tradition of a strong state, the President said, citing poor performance of state agencies and corruption as the main problems in this area. The President listed the key principles for a new model of public administration, including the new forms and methods of control, effective motivation of municipal officials and the introduction of certain restrictions concerning, in particular, foreign accounts, assets and real estate.

The President made a number of proposals with regard to the fight against corruption, including the development of public control mechanisms.

Talking about the economy, the President highlighted the importance of moving away from a commodity-based economic model and overcoming the economy’s dependence on financial and commodity markets in other countries, as well as some issues of jurisdiction and administrative proceedings. The President suggested that the Government and the Central Bank consider new mechanisms for financing the economy and further reducing inflation. The tax system must correspond to the needs of economic restructuring. It is essential to stimulate investment and development, shifting the tax burden towards consumption, including excise goods and expensive real estate, the President stressed.

The President also asked the Government to adopt a roadmap for enhancing competition as part of its efforts on the national entrepreneurial initiative and to begin its implementation next year.

Vladimir Putin also touched on the issues of food security, the environment, industry modernisation, development of science and technology, which requires the full use of the unprecedented funds allocated for defence procurement and modernisation of the defence industry.

We also need an investment map of Russia, the President said, providing investors with clear information on the regions where it is more profitable to work, to set up production facilities, and what forms of state support will be available to businesses in the near future.

In the international part of the Address, the President stressed the multipolar nature of the modern world, noting that Russia stands for the principles of coherent and collective efforts in addressing challenges facing the world today and can propose projects that will unite nations and regions. Vladimir Putin confirmed Russia’s intention to move towards closer integration with its immediate neighbours. He stressed that the Customs Union and the Common Economic Space of Russia, Belarus and Kazakhstan are already working effectively. Efforts have begun on the establishment of the Eurasian Economic Union, and this goal will be achieved.

* * *

President of Russia Vladimir Putin: Citizens of Russia,

Federation Council members and State Duma deputies,

Recently, just a few months ago, in the articles written during the presidential election campaign and then in the executive orders signed in May 2012 I set out our position and our short and medium term plans. They covered all areas of our work and our lives: the economy, social sphere, domestic policy, international affairs and security issues. These documents describe our plans in detail, sometimes citing specific figures and deadlines. Some of them are already being implemented, for example raising teachers’ wages and some other tasks. We have put together the required regulatory framework with regard to all other items on our agenda. The work has begun. I want to assure all citizens of our country that it will continue; we will tackle all the tasks we have set without fail. The commission that was created specifically for this purpose will monitor these efforts.

“A great deal has been achieved in the first twelve years of the new century. The stage of national reconstruction and strengthening, which is enormous in its importance, has been completed. Our task now is to build a rich and prosperous Russia.”

Today, in my first Address to the Federal Assembly since being elected President, I will not speak in detail about those plans. It is too early to talk about any substantial adjustments but there are several points I would like to make in this regard.

I would like to highlight some of the key aspects of our progress, questions that are fundamental for Russia’s present and future not only in the medium but also in the long term, the most basic issues for each and every one of us.

A great deal has been achieved in the first twelve years of the new century. The stage of national reconstruction and strengthening, which is enormous in its importance, has been completed. Our task now is to build a rich and prosperous Russia. I would like all of us to understand clearly that the coming years will be decisive and perhaps even ground-breaking not only for us, but for the entire world as it enters a period of transition and possibly even shocks.

Global development is becoming increasingly unequal. This creates a fertile ground for new economic, geopolitical and ethnic conflicts. Competition for resources is becoming more intense. And I can assure you and want to emphasise that this competition will not be limited only to metals, oil and gas, but above all will focus on human resources and intelligence. Who will take the lead and who will remain outsiders and inevitably lose their independence will depend not only on the economic potential, but primarily on the will of each nation, on its inner energy which Lev Gumilev termed “passionarity”: the ability to move forward and to embrace change.

“Russia must be a sovereign and influential country. We should not just develop with confidence, but also preserve our national and spiritual identity, not lose our sense of national unity. We must be and remain Russia.”

People in countries with developed economies and many countries with developing economies have become used to constant consumption growth, the expansion of life and cultural opportunities. That is good but it is possible to ensure the continuation of such growth in the modern world only through the introduction of a new technological order, and that is a great obstacle in many parts of the world. A country that is unable to secure its place among the developers of new innovative technologies is not just doomed to dependence: the share of the global ”pie“ which will benefit its businesses and citizens will be much smaller than that of the leaders. See how the revenue is distributed today between those who produce intellectual products and the consumers of the end product. The share is 15% and 75–80%.

In the 21^st century amid a new balance of economic, civilisational and military forces Russia must be a sovereign and influential country. We should not just develop with confidence, but also preserve our national and spiritual identity, not lose our sense of national unity. We must be and remain Russia.

After 70 years of the Soviet period, Russian people went through a period when the importance of their private interests regained its relevance. That was a necessary and natural stage. However, working for one’s own interests has its limits. Prosperity cannot be achieved if chaos, disorder and insecurity reign beyond the walls of your house. You cannot live without having regard for others, without helping the weak, without extending your responsibility beyond the responsibility of your family or profession. Today more and more people in our country understand this. This has lead to the rise of civic engagement. People begin to relate their own lives and work with caring for others, with the aspirations of the entire nation and the interests of the state.

Today is December 12, the Constitution Day, and I would like to say a few words about the values that are rooted in the fundamental law of our country. The nation-wide responsibility for our country to the present and future generations is hailed by the Constitution as a fundamental principle of the Russian state. It is in civil responsibility and patriotism that I see the consolidating force behind our policy.

“The nation-wide responsibility for our country to the present and future generations is hailed by the Constitution as a fundamental principle of the Russian state. It is in civil responsibility and patriotism that I see the consolidating force behind our policy.”

Being a patriot means not only to treat one’s national history with love and respect, although, of course, that is very important, but first and foremost to serve one’s country and society. As Solzhenitsyn said, patriotism is an organic, natural feeling. And as a society cannot survive without civil responsibility, so a country, especially a multinational one, cannot exist without a nationwide responsibility. These are remarkable words, they really bring it home.

A sense of responsibility for one’s country cannot be instilled with slogans or appeals; people must see that the authorities are transparent, accessible, work hard for the benefit of the country, city, region, village and every citizen, and respond to public opinion. The authorities must not be an isolated caste. This is the only way to build a strong moral foundation for creative work, an affirmation of order and freedom, morality and civic solidarity, justice and truth, and nationally oriented consciousness.

What will guarantee Russia's sovereignty in the 21^st century? We often talk about this today. First, the country must have a sufficient amount of its own resources. This is not so that we could produce everything at home. Nobody lives like this anymore and I think that no one will ever live like this again. Russia must not only preserve its geopolitical relevance – it must multiply it, it must generate demand among our neighbours and partners. I emphasise that this is in our own interest. This applies to our economy, culture, science and education, as well as our diplomacy, particularly the ability to mobilise collective actions at the international level. Last but not least it applies to our military might that guarantees Russia’s security and independence.

Against the background of conflicting processes in the world, the interests of the nation require decisive action. We must look ahead and focus on the future.

Colleagues,

In the 20^th century Russia went through two world wars and a civil war, through revolutions, and twice it experienced the collapse of a unified state. The whole way of life changed radically in our country several times. As a result, at the beginning of the 21^st century, we were faced with a real demographic and moral catastrophe, with a demographic and moral crisis. If the nation is unable to preserve and reproduce itself, if it loses vital references and ideals, it does not need an external enemy because it will fall apart on its own.

“For the first time in our country’s recent history, natural population growth has been posted for five months in a row: the birth rate has finally started to exceed the death rate. In the past four years life expectancy in Russia has grown by almost 2.5 years and has exceeded 70 years.”

I have talked about this many times but I want to emphasise it again. For Russia to be a sovereign and strong nation there must be more of us and we must be better in our morality, competences, work and creative endeavours. Today, the share of the young, active, working population aged 20 to 40 years in Russia is one of the highest among the developed countries. But in just 20 years, this age group could be reduced by half. If nothing is done, this trend will continue. Either right now we can open up a lifelong outlook for the young generation to secure good, interesting jobs, to create their own businesses, to buy housing, to build large and strong families and bring up many children, to be happy in their own country, or in just a few decades, Russia will become a poor, hopelessly aged (in the literal sense of the word) country, unable to preserve its independence and even its territory.

The demographic programmes adopted in the past decade have shown their effectiveness. The country's population has not only stabilised, but it has also begun to grow. In January-September 2012, it has grown by more than 200,000 people. For the first time in our country’s recent history, natural population growth has been posted for five months in a row: the birth rate has finally started to exceed the death rate.

In the past four years life expectancy in Russia has grown by almost 2.5 years (this is a good indicator) and has exceeded 70 years. However, the mortality rate remains very high, especially among middle-aged men. Together we must fight the frankly irresponsible attitude in society towards healthy living. Along with the development of public healthcare more attention should be paid to preventive care. Naturally, this does not mean that we should focus less attention on improving healthcare and increasing its accessibility – not at all. However, it is not enough to limit our efforts to medicine. The Government should introduce programmes for replacing jobs with hazardous conditions and improving road safety. Only smoking (we know this well as we have discussed this many times already), alcohol and drug addiction cause hundreds of thousands of premature deaths in our country every year.

A vitally important area is the development of physical fitness and sport, especially among young people. After all, the reason why we will be hosting the biggest international sports events is to encourage people to exercise, to raise the popularity and prestige of sports and fitness. But this task, the task of promoting sports and fitness, mass sports, cannot be achieved through international sporting events and even increasing the hours of physical education in schools and universities. We need new methods, a wide range of not only sports, but also fitness activities, especially for children, and I want to emphasise this: activities for young children. As we know, lifelong habits and interest are formed at this age, and we must work to encourage them.

I believe it is crucial to support the idea of creating associations of student sports clubs. Such an organisation would not only contribute to the development of university sports, but in a sense could give a social boost for talented, focused and active young people. I think it is important that such an organisation remains beyond politics and unites young people with a wide variety of political views.

“We have a unique opportunity in the next decade to fundamentally resolve another long-standing Russian problem: housing. I think this is the most important issue both for the Government and heads of the Russian regions.”

We have adopted a programme providing family (maternity) capital at the birth of the second child. It is being implemented successfully, and will continue to be implemented until the end of 2016. We will fulfil all our obligations under this programme.

I want to stress once again: the programme was adopted until 2016, that is, every family that has a second child before 2016 will receive maternity capital and other benefits as required by law. This does not mean that I now want to encourage women to have a second child. Women know what they need to do and when. But it is our responsibility to inform people, just as we must decide what to do with this programme after 2016. Starting in 2013, we will begin paying additional benefits for the third and subsequent children in those regions where the demographic situation is worse than the national average.

We have 50 such regions in the Russian Federation, and most of them are concentrated in the Central, Northwestern, Volga and Far Eastern federal districts.

In addition, I would like to remind the heads of all Russian regions about the need to adopt and implement their own regional demographic programmes. Demographers say that the decision to have a second child is a potential decision to have a third. It is important that more families take this step. And, despite some experts’ doubts (with all due respect), I still believe that families with three children should become the standard in Russia. But a great deal must be done to make this a reality.

First of all, we must create a favourable environment for women so that they do not fear that the birth of the second and subsequent children will limit their career opportunities, their chances to find a good job and will force them to become housewives. Our efforts to eliminate waiting lists for kindergartens, introduce vocational training programmes for women who have children and provide support for flexible forms of employment will have a direct influence on each family’s decision to have the second and third child.

“We have set the goal to create and modernise 25 million jobs by 2020. Quality jobs will become the driving force for the growth of wages and wellbeing. That is the most important aspect of our work.”

Special attention should be given to pre-school education, including support for the creation of private pre-schools. The Government has already eliminated many barriers in this area. Please finalise this work in the first six months of 2013, and I ask the regions to make active use of the opportunities provided. We must finally let the people work normally so that they can open small home-based kindergartens and all-day childcare, which means that parents will have a choice of day care without the waiting lists and all the anxiety.

I am confident that we have a unique opportunity in the next decade to fundamentally resolve another long-standing Russian problem: housing. I think this is the most important issue both for the Government and heads of the Russian regions. In the first stage of the Housing National Project we successfully promoted the development of mortgage loans. In the past two years, these loans have been growing by 40–50% a year. This is a good indicator, but frankly, as we know, mortgage loans mostly benefit people with above average incomes. Other people cannot afford them.

Therefore, now, at the new stage, we must attempt to resolve the housing problem for a broader range of people: young families, social sphere professionals, doctors, teachers, scientists and engineers, and take measures to increase the commissioning of affordable economy class housing, as well as greatly enhance the opportunities to rent housing. Some regions already have pilot projects that serve as case studies for various forms of rental market support. Such housing must be affordable to working people.

We also emphasise that in 2013–2014 we will fully meet our obligations to provide housing to military personnel and war veterans, and make significant progress in relocating people from unfit housing. In the next few years all people who were recognised on January 1, 2012 to be in need of better living conditions due to the poor state of their housing will move into their new flats.

We have set the goal to create and modernise 25 million jobs by 2020. This is a very ambitious and difficult challenge, but we can achieve it. We can help people find good, interesting employment. Quality jobs will become the driving force for the growth of wages and wellbeing. That is the most important aspect of our work. We need to revive engineering schools and professional training. Overall, we must pay more attention to working people.

“Schools must regain their absolute value. This means renewing educational content, while of course maintaining our traditions and advantages, such as our fundamental mathematical education. Whether or not a student comes across a talented, dedicated teacher largely determines the formation of his or her personality, his or her future. The education system must be built around strong, gifted teachers.”

I am instructing the Government Cabinet to develop and implement a national system for evaluating the quality of professional training in the next two years.

I also want to particularly mention the social sector. The specialists working there are known as public-sector employees. However, these people are highly educated and highly qualified, and in terms of their work, their cultural needs and social engagement, they are members of the so-called creative class. This creative class, or if we use the traditional term, the intelligentsia, is comprised, first and foremost, of doctors, teachers, university educators, workers in science and culture; these people are working in every region, in every village, in every city. At the same time, in terms of their incomes, they are still beyond the middle class level and are unable to afford proper vacations or comfortable living conditions, and must constantly seek additional sources of income.

For many years, the government underpaid these specialists, simply because it did not have the means, primarily because we needed to resolve other, more pressing problems such as increasing pensions, because the elderly were in an even worse situation, often living below the poverty line.

Now, we can radically change the situation in the social sectors. I laid out my suggestions in detail in the executive orders I mentioned, as well as my pre-election articles. The executive orders signed in May set the parameters for wage increases for every category of workers in these sectors. I am asking the heads of federal and regional government agencies to mobilise all their resources to implement this goal, and not just because these are our pre-election promises, although that is certainly very important – we must fulfil every promise we made. But even more importantly, if we fulfil this goal, we will be able to solve several key problems at once.

First of all, we will see a significant improvement in the quality of healthcare and education, because new, talented professionals will be drawn to these fields. And current workers in these areas will get the opportunity to focus on their main jobs, improve their training, and not take on additional side jobs and overtime. This is how we hope to eradicate such problems as day-to-day corruption and indifference to one’s responsibilities – everything that so greatly offends and hurts people today.

Second, the number of citizens who classify as members of the middle class will grow significantly – by a quarter. This will be particularly noticeable in the regions. We will support the revival of provincial intelligentsia, which was once Russia’s professional and moral backbone.

Third, professional communities of medical workers, educators, scientists and cultural workers will gain a new impetus for development. These communities must become the core of a competent and active civil society. It is fundamentally important for society to have the opportunity to objectively assess the state of science and the social sector.

I am asking the Government Cabinet, jointly with the Presidential Executive Office, to put together suggestions on creating a system for publicly monitoring the quality of healthcare, education, results of academic research and the need for cultural institutions by April of next year. First and foremost, we must attract professionals to these lines of work, and to look at international best practices.

“We must promote technical and artistic creativity, establish summer sports camps and create special educational tourist routes for children. All this should be accessible to every child, regardless of where they live and how much their families earn.”

Let me stress that it would be incorrect to perceive the programme of professional development support as simply increasing everyone’s wages equally, without taking into account the qualifications and the actual input of each and every worker. Every organisation – medical, educational, scientific – must create its own programme for development and personnel renewal.

In this respect, I would also like to say the following. All of us (I do not know anybody who would be against this) speak about the need to restructure various sectors, but as soon as the restructuring process begins, we hear people complaining: this should not be touched, that should not be approached. We must avoid and eliminate this. If we understand what needs to be done, then we must do it, but at the same time, we must do it wisely. Here, I must agree with everyone who feels this work should be carried out in constant dialogue with the professional communities; we must always explain our policies. I am also asking media executives and leading journalists to give particular attention to the transformations happening in these areas – this is a highly important nationwide challenge.

I am confident that growth of wages will attract top graduates to education, healthcare and science sectors. Indeed, we are already seeing the beginning of this process. In the last three years, medical universities have taken the lead with the highest average Final School Exam [EGE] score among their applicants, leaving economics and law departments behind. This year, we have seen a significant change in the knowledge level of applicants to teaching professions. The number of talented, well-advanced school graduates who have enrolled in pedagogical universities has increased significantly.

Colleagues, today, in our cities and villages, we are seeing the results of what has been happening in our nation, in society, in schools, in the media, and in our heads for the past fifteen to twenty years. And this is understandable. That was the time when we discarded all ideological slogans of the previous era. But unfortunately, many moral guides have been lost too. We ended up throwing out the baby with the bath water. Today, this is often manifested in people’s indifference to public affairs, willingness to tolerate corruption, brazen greed, manifestations of extremism and offensive behaviour. And all of this occasionally takes an ugly, aggressive, provocative form; I’ll go even further and say that it creates long-term threats to the society, security and even integrity of Russia.

It is painful for me to say this, but I must say it. Today, Russian society suffers from apparent deficit of spiritual values such as charity, empathy, compassion, support and mutual assistance. A deficit of things that have always, throughout our entire history, made us stronger and more powerful; these are the things we have always been proud of.

“The morale of our Armed Forces is held up by traditions, by a living connection to history, by the examples of bravery and selflessness of our heroes.”

We must wholeheartedly support the institutions that are the carriers of traditional values, which have historically proven their ability to pass these values from generation to generation.

The law can protect morality and should do so, but a law cannot instil morality. Attempts by the government to encroach on people’s beliefs and views are a manifestation of totalitarianism. This would be completely unacceptable to us and we do not plan to follow that path. We must not follow the path of prohibition and limitations, but instead, we must secure a firm spiritual and moral foundation for our society. That is precisely why issues of general education, culture and youth policy are so significant. These areas are not just a collection of services; rather, first and foremost, they are the environments for creating a moral, harmonious person, a responsible Russian citizen.

Friends, we must acknowledge that schools’ influence on shaping children and adolescents has grown weaker in recent years. They now have some powerful competitors: the Internet and the electronic media. The parents and students themselves are now much more demanding and a school must not fall behind its students, the development of society, or the flow of information; instead, it should be well ahead of them all. Schools must regain their absolute value. This means renewing educational content, while of course maintaining our traditions and advantages, such as our fundamental mathematical education, without forgetting the enormous significance of high-quality education in the Russian language, history, literature, the foundations of secular ethics and traditional religions. These subjects have a special role: they form a personality, an individual.

Whether or not a student comes across a talented, dedicated teacher largely determines the formation of his or her personality, his or her future. The education system must be built around strong, gifted teachers. Such teachers should be selected scrupulously, taken care of and supported. Schools do not simply impart a set of knowledge. I think you will agree with me that high-quality school training is impossible without education. I am asking the Government Cabinet to prepare a programme for the comprehensive development in schools of educational component, and it must above all be modern.

We must promote technical and artistic creativity, establish summer sports camps and create special educational tourist routes for children. All this should be accessible to every child, regardless of where they live and how much their families earn. Let me point out that this falls under the direct responsibility of the Russian Federation’s regions. But clearly, the Government must keep these matters under control.

“For centuries, Russia developed as a multi-ethnic nation, a civilisation-state bonded by the Russian people, Russian language and Russian culture native for all of us, uniting us and preventing us from dissolving in this diverse world. We treat and will continue to treat with great care and respect every ethnic group, every nation in the Russian Federation. Our diversity has always been and remains the source of our beauty and our strength.”

We should let the wealth of Russian culture guide us. Russia has always been among the nations that not only create their own cultural agenda, but also influence the entire global civilisation. State policy in this area must aim to resolve current societal challenges. We must clearly understand and respond to the needs of modern society, particularly those of youth, and strengthen the traditions of the peoples of Russia.

Our citizens who have made outstanding achievements in the creative sphere, in their work, business, sports and charity must be known in society and supported by the state.

Today, there are many people in Russia who work selflessly on public charity projects. The construction brigade movement is being revived. I think it is important to support such volunteer initiatives. And soon, we will be discussing this in detail at a meeting with members of volunteer organisations.

Friends,

In order to revive national consciousness, we need to link historical eras and get back to understanding the simple truth that Russia did not begin in 1917, or even in 1991, but rather, that we have a common, continuous history spanning over one thousand years, and we must rely on it to find inner strength and purpose in our national development.

We are nearing the end of 2012, which was declared the Year of Russian History. But this attention to our nation’s history and related educational and scientific projects should not fade away. I am counting on the active work by the recently recreated Russian Historical Society, as well as the Russian Military History Society and the Russian Geographical Society, which has been active now for several years.

I would like to particularly thank the search parties that are restoring the names of heroes for our nation and for their families, honourably interring the remains of soldiers who fell in the Great Patriotic War and caring for war memorials.

At our meetings with search party participants, we spoke about how important it is to preserve the historical military memory of the Fatherland. After all, is it fair that we still do not have a single worthy national monument to the heroes of World War I? Our predecessors called it the great war, but it was undeservingly forgotten and struck from our historical memory and history for political and ideological reasons. Meanwhile, the morale of our Armed Forces is held up by traditions, by a living connection to history, by the examples of bravery and selflessness of our heroes. I feel that we should revive the names of the most renowned regiments, military units and major formations of past eras within the Russian army – both from Soviet times and earlier eras, such as Preobrazhensky ans Semenovsky regiments. The Defence Minister should present corresponding suggestions.

We must value the unique experience passed on to us by our forefathers. For centuries, Russia developed as a multi-ethnic nation (from the very beginning), a civilisation-state bonded by the Russian people, Russian language and Russian culture native for all of us, uniting us and preventing us from dissolving in this diverse world.

To the rest of the planet, regardless of our ethnicity, we have been and continue to be one people. I recall one of my meetings with veterans. There were representatives of several ethnicities: Tatars, Ukrainians, Georgians, and ethnic Russians of course. One of the veterans, who was not an ethnic Russian, said, “As far as the entire world is concerned, we are one people, we are Russians.” That was true during the war, and it has always been true.

“I ask the Government Cabinet to submit proposals for the implementation of distance learning programmes in Russian. It should be available for young people in the CIS and for our compatriots all over the world. We should strive to ensure that quality education in Russian is available globally. In general, we should talk about ways to expand Russia’s presence in the global humanitarian, informational and cultural space.”

We treat and will continue to treat with great care and respect every ethnic group, every nation in the Russian Federation. Our diversity has always been and remains the source of our beauty and our strength.

But we must not forget that any nationalism and chauvinism do direct and enormous damage especially to the people and the ethnic group whose interests the nationalists are supposedly defending. That is why there is a grave danger for Russia in all manifestations of “simple and definitive” solutions offered by the nationalists and extremists of various stripes and persuasions. Whatever their slogans, they drag the country towards social decline and disintegration. We must regard attempts to provoke ethnic tensions and religious intolerance as a challenge to the unity of the Russian state and as a threat to all of us. We will not allow the emergence of closed ethnic enclaves in Russia with their informal jurisdiction, existing outside the country’s common legal and cultural norms, and disdainfully disregarding the accepted standards, laws and regulations.

I appeal to the heads of the republics of the Russian Federation, to the governors and mayors of major cities. This is primarily your responsibility. You must work with people on a daily basis, and you must organise this effort to make it effective.

Russia needs new blood. That much is clear. It needs smart, educated, hard-working people who do not just want to make some money here and leave, but want to move to Russia, settle down here and consider this country their homeland. However, the current regulations do not contribute to this goal. Quite the contrary. The process of obtaining citizenship for our compatriots, for those who are culturally and spiritually close to Russia is difficult and outrageously bureaucratic. At the same time it is very simple to import unskilled labour, including illegally.

I ask you to develop a simplified procedure for granting Russian citizenship to our compatriots, the bearers of the Russian language and Russian culture, the direct descendants of those who were born in the Russian Empire and the Soviet Union, for those who want to take up permanent residence in our country and, therefore, to give up their current citizenship.

At the same time I consider it reasonable and necessary to toughen penalties against illegal immigration and violations of registration rules. The relevant amendments have already been submitted to the State Duma. I ask the deputies to pass these laws.

I would like to make another proposal. We still allow citizens of CIS states to enter the Russian Federation using their national passports. Enough time has passed and all CIS states have become firmly established. It is almost impossible to ensure effective immigration control when foreign citizens can enter the country using their national passports. I believe that beginning from no later than 2015 entry into Russia should only be possible for bearers of international passports.

“Democracy is not only an opportunity to elect power, it’s about being able to monitor it and evaluate the results of its work. We must pay greater attention to the development of direct democracy and self-rule.”

I ask the relevant agencies to work on this matter together with our colleagues in the Commonwealth. We do not want to create problems for anyone. If necessary, we can provide them with assistance and support, including financial and technical. It is a simple matter of issuing documents. We must adopt the practice of many of our neighbours and strategic partners around the world. We can provide technical and financial assistance, if needed.

At the same time, the current regulations will remain in force for citizens of the Customs Union and Common Economic Space, who will enjoy the simplified rules for crossing the border within the territory of the Customs Union and the Common Economic Space.

The role of public institutions is extremely important in immigration policy matters. In this regard, I consider it correct to broaden the powers of national and cultural autonomies, to provide them with federal grants for the implementation of programmes for the legal, social and cultural adaptation of immigrants. This experience has shown to be effective in many countries.

I also ask the Government Cabinet to submit proposals for the implementation of distance learning programmes in Russian. It should be available for young people in the CIS and for our compatriots all over the world. It is important to support schools in the CIS and in other states which teach in Russian, including by providing support for the teachers, help with textbooks and equipment. We should create a system of international school competitions in the Russian language. The winners should be granted admission to the leading Russian universities.

“Political competition is important for the country. We must establish a kind of code of fair political competition.”

Colleagues, I would like to address especially those of you who work in this field. I believe we should strive to ensure that quality education in Russian is available globally. In general, we should talk about ways to expand Russia’s presence in the global humanitarian, informational and cultural space.

Colleagues,

Democracy is the only political choice for Russia. I would like to stress that we share the universal democratic principles adopted worldwide. However, Russia's democracy means the power of the Russian people with their own traditions of self-rule and not the fulfilment of standards imposed on us from the outside. Democracy means compliance with and respect for laws, rules and regulations. The ruling parties, governments and presidents may change but the core of the state and society, the continuity of national development, sovereignty and freedoms of people must remain intact.

Democracy is not only an opportunity to elect power, it’s about being able to monitor it and evaluate the results of its work. We must pay greater attention to the development of direct democracy and self-rule, including the right of popular legislative initiative (I have already talked about this), when an idea that receives public support, including via the Internet, must be considered in Parliament.

In addition, I believe members of the Federation Council and State Duma deputies must be given the right to initiate legislation in the regional legislatures. Thus, we will strengthen the connection between federal laws and the life of the regions and each legislator.

Political competition is important for the country. At the same time, we must establish a kind of code of fair political competition.

There are several points I would like to make in this regard.

First. Russia’s unity, integrity and sovereignty are unconditional. Any manifestations of separatism and nationalism must be completely removed from the political agenda.

Second. Any direct or indirect foreign interference in our internal political processes is unacceptable. Anyone who receives money from abroad for his or her political activities, thus serving certain foreign national interests, cannot be a politician in the Russian Federation.

“Russia’s unity, integrity and sovereignty are unconditional. Any manifestations of separatism and nationalism must be completely removed from the political agenda.”

Third. There can be no place in politics for criminals. This should become standard practice for all political forces. Of course, people will say that it is already against the law for criminals to take part in politics. Yes, it is against the law but they still try to enter the political arena, sometimes receiving help, and this should not happen.

Fourth. Civilised dialogue is possible only with those political forces that make, justify and articulate their demands in a civilised way, defending them in compliance with the law. The change and modernisation of the political system are natural and even necessary, but I have said in the past that it would be inadmissible to allow for the destruction of the state to satisfy this thirst for change. The whole history of Russia screams about it.

Fifth. The state must and will seek to ensure equal access to the media for all political parties, and not only during election campaigns but at all times. However, this is not an easy task, as I am sure you realise. We had seven political parties at the beginning of this year, and now we have 48, if I am not mistaken, plus there are over 200 organising committees working to establish their own political parties. Nevertheless, the authorities must strive to ensure that all of them enjoy equal rights. Many political parties and experts propose that we return to a mixed system of State Duma elections – to party lists and single-mandate voting districts, which, of course, will have to be established first. I agree with this, let's go back to this system.

Some people talk about restoring the electoral blocs’ right to participate in elections. Let's think about this matter separately. It requires a detailed discussion, consideration and analysis. I am convinced that this can make our political system more fair, open and competitive, and will satisfy the society’s demand for new leaders in politics and the government, a demand for outstanding and independent people.

Colleagues,

Russia is characterised by a tradition of a strong state. Therefore, the main public demands are addressed to the state: to guarantee civil rights and justice, to reduce violence and social inequality, to restore order in the housing and utilities sector, and so on.

“We will certainly continue to combat corruption, which is a threat to national development prospects. I would like to stress that businesses must never enjoy any privileges based on their proximity to the executive, legislative or judicial government bodies at any level.”

Poor government efficiency and corruption are major problems that everyone can see. We will never be able to tackle the challenges facing our society and our nation without quality, modern public administration, and without a high level of personal responsibility of everyone involved in it.

The following principles should be the key to the new model of public administration.

First. All parts of the state mechanism and all levels of government must be oriented towards a result that is measurable, transparent and understandable to the public.

Second. There must be extensive introduction of new forms and methods of control. Public opinion must become the main criterion for assessing the effectiveness of state bodies that provide public services as well as institutions in the social sphere.

Third. Effective motivation of municipal employees: competitive salaries, a system of moral, financial and career incentives to encourage continuous improvement in the work of state bodies. At the same time, personal liability must be increased dramatically, up to and including temporary disqualification.

This means that not only can an official found guilty of negligence be dismissed from office, but he or she can also be banned from engaging in this activity for a certain period of time.

“The state’s moral authority is a fundamental prerequisite for Russia’s development. Therefore the policy to cleanup and renew state authorities at all levels will be firm and consistent.”

Fourth. When we criticise public officials I would like us to bear in mind that the vast majority of employees in various state bodies are honest and responsible people. This is a special responsibility for those who take on a number of legal and ethical obligations and restrictions. We must not forget that. But if a person has chosen public service, he or she should be ready for these restrictions, for public scrutiny and special requirements, as is the case in almost all countries around the world. How can the public have confidence in an official or politician who says high-sounding words about the national good but at the same time tries to take his money and assets out of the country?

I ask you to support legislative proposals limiting the rights of state officials and politicians to hold foreign accounts, stocks and shares. (Applause.) Hold your applause, you may not like what is coming. (Laughter.) This requirement should apply to all officials who are in charge of key decisions: the top leaders of state and government, the senior staff in the Presidential Executive Office and their immediate families. It should also apply to members of the Federation Council and State Duma deputies.

As for the ownership of foreign real estate, it must be declared in accordance with the law, and the official must submit a report on the cost of the property and the origin of the funds used to purchase it.

Fifth. Control over agencies exercising regulatory oversight requires special attention. According to various estimates, about one million people are employed in these bodies, which is comparable to the number of doctors or teachers in the country.

I ask the Government Cabinet to submit proposals on ways to reshape the key functions of oversight agencies. Oversight is undoubtedly one of the key government functions. However, it is unacceptable when performance indicators for oversight agencies are not based on the result, but on the number of investigations.

It is essential to introduce public reports by oversight agencies about the results of investigations, as well as the financial and human resources used to conduct them. That will clearly show the cost of each investigation and even whether it is necessary at all.

We will certainly continue to combat corruption, which is a threat to national development prospects. I would like to stress that businesses must never enjoy any privileges based on their proximity to the executive, legislative or judicial government bodies at any level.

“We cannot be satisfied with today’s situation, when the Russian budget, the social sector, are basically held hostage to the financial and commodities markets of other countries. A lopsided raw materials economy does not allow for developing and putting to adequate use human potential; it is incapable of giving most of our people the opportunity to make use of their strengths, talents, labour and education, which means, by definition, that it breeds inequality.”

In this regard, first, in addition to monitoring income and assets, we will also begin monitoring the expenditures and major acquisitions of civil servants, executives of state companies and their close relatives. At the same time, I want to point out that the Prosecutor General’s Office has now got the right to petition the courts to confiscate property that was acquired as the result of unlawful enrichment.

Furthermore, I believe that the level of remuneration for the executives of organisations financed through the state budget should be pegged to the organisation’s performance and the average salary of its employees. We have already spoken about this many times. When we adopted new salary calculation principles a couple years ago, there were initially many disputes as to whether they should include mandatory principles or whether it would be enough to just set guidelines. But some guidelines were written, and yet ultimately, executives at some companies have salaries many times higher than the regular personnel. This is wrong and this situation is to be changed.

Third. State purchase contracts have become the current “breeding grounds” for corruption. I am asking parliament to accelerate the passing of a law on the federal contract system. And it is exceedingly important to audit the efficacy and expediency of budgetary expenditures as well as purchases by the government and state companies, and instil public accountability for the process and results of fulfilling state orders.

Fourth. The Accounts Chamber has significant instruments. We expect much greater efficacy and professionalism from this institution. The ruling party, as well as the parliamentary opposition, should have the right to propose candidates for the post of chairperson, deputy chairperson, and auditors. At the same time, given the specifics of this type of work, it would be best to limit their tenure to two consecutive terms.

Fifth. Active civic participation and effective public monitoring are necessary conditions for effectively fighting corruption. Today, many citizens are already building a system of public control at the municipal level on their own initiative, including for the housing and utilities sector. We are obligated to support this this type of attitude. Just recently, the day before yesterday, we spoke on this topic at a meeting with election campaign activists.

The media also play a very important role in this work. That said, while we understand that the media operate in the market environment, they must not sell the objectivity of their information to the highest bidder; instead, their efforts must be based first and foremost on the interests of the entire society and on high moral principles.

“Economic freedom, private property, competition and a modern market economy, rather than state capitalism, must be the core of a new growth model.”

Let me stress that the state’s moral authority is a fundamental prerequisite for Russia’s development. Therefore the policy to cleanup and renew state authorities at all levels will be firm and consistent.

Colleagues,

We cannot be satisfied with today’s situation, when the Russian budget, the social sector, are basically held hostage to the financial and commodities markets of other countries. A lopsided raw materials economy, as has been pointed out on many occasions, is not just vulnerable to external shocks. Most importantly, it does not allow for developing and putting to adequate use human potential; it is incapable of giving most of our people the opportunity to make use of their strengths, talents, labour and education, which means, by definition, that it breeds inequality. Finally, the capacities of the raw materials based economy model are exhausted while Russia’s development needs require an annual GDP growth of no less than 5 or 6 percent over the next decade.

At the same time, I am fully aware of the reality in which we live and I am familiar with the calculations and forecasts by the Economic Development Ministry. Nevertheless, it is important to set this high goal and strive toward achieving it.

Essential changes in the structure of the economy, the launch of new industries and regaining leadership in traditional industrial sectors, as well as the development of small and medium-sized businesses are key targets. I am confident that economic freedom, private property, competition and a modern market economy, rather than state capitalism, must be the core of a new growth model.

Our entrepreneurs are often criticised for lacking patriotism. The high degree of offshore investments and ownerships in the Russian economy is an absolute fact. Experts call this phenomenon fleeing from jurisdiction. According to some assessments, nine out of ten major transactions made by major Russian companies are not regulated by Russian laws – including, incidentally, companies with state participation. We need a comprehensive system of measures to reverse the offshoring of our economy. I am instructing the Government to make corresponding integrated proposals on this matter.

“The best way to make businesses patriotic is to ensure effective guarantees for protecting property and honouring contracts, and to make Russia’s jurisdiction appealing.”

We are to strive for offshore transparency, disclosure of tax information, as is done by many nations through negotiating with offshore zones and signing corresponding agreements. All this can and should be done. Nevertheless, if in choosing a jurisdiction, a foreign legislation is preferred, we then certainly must admit that we should improve the improper elements in our own judicial system, in our law-making, in our law enforcement practices. Only by admitting this honestly can we fundamentally change the situation. We have to carry out systemic work to improve our legislation, while refuting the presumption of guilt of businesses, the accusatory slant in our law enforcement and judicial practices, once and for all.

We must eliminate all hitches in the legal system that allow turning economic disputes into score-settling through instigating contracted criminal cases.

I want to thank the deputies of the State Duma and members of the Council of Federation for their work on a package of amendments that are bringing order to this domain. Thus, instituting criminal proceedings will not be allowed without a complaint filed by the damaged party regarding a variety of economic offences, while the penalties for policemen for tampering will be toughened.

We should as soon as possible draft special laws to regulate administrative legal proceedings. The Supreme Court President and I have discussed this in great detail several times. We need to have juries to resolve the disputes between citizens and state authorities at all levels – this is a highly important objective that has still not been resolved. The opportunity to file collective lawsuits in the interest of an unlimited number of individuals, as well as lawsuits by public associations, will provide citizens with additional protection. I ask that you accelerate the implementation of the corresponding amendments to the Civil Procedure Code.

Another important issue. Modern legislation, particularly financial and corporate legislation, is very specific. In this regard, I suggest that we work with partners to promote (or rather to complete, since it has already essentially begun but needs to be finished) the process of creating an arbitration court for the Customs Union, which can become a leading independent agency for examining financial and other disputes. Overall, it is imperative to come up with a set of measures to develop arbitration proceedings in Russia, at a qualitatively new level.

I would also like to stress that the best way to make businesses patriotic is to ensure effective guarantees for protecting property and honouring contracts, and to make Russia’s jurisdiction appealing.

“We need a kind of investment map of Russia, providing investors with clear information about which regions are more profitable, better to work in, to set up production facilities, and what forms of state support will be available to businesses in the near future.”

The state itself must show a good example of using Russian jurisdiction, making a point of choosing Russian platforms for the placement of state resources in privatisation transactions. Incidentally, the privatisation the Government intends to conduct should not have anything in common with the practices of the 1990s, the notorious loans-for-shares auctions. Today’s privatisation should be based on the fair, transparent sale of state property at a just, realistic price.

Colleagues, the quality of privatisation is not just about money flowing into the state budget. It is, first and foremost, a question of society’s trust in the actions of the state; it is the emergence of a truly legitimate, respected proprietor. I am asking all Government representatives who are responsible for conducting privatisation processes to remember this.

Businesses should work to achieve their own success as well as that of the nation; and should breed talented, sensible organisers, patrons and patriots, as was the case in earlier times in Russia. It is then and only then that entrepreneurs will be able to gain widespread public respect.

Let me remind you that together with the business community, we began implementing a national entrepreneurial initiative. According to expert assessments, Russia’s inclusion in the group of 20 nations with the best business climate will allow us to add no fewer than 2.5 percent to the current GDP growth rate, and the additional growth will be primarily in the non-raw materials sector, through small and medium-sized businesses.

The most important factor in economic revival is the quality of the work done by regional authorities. We already have regions that have no oil or gas but, as you all know, show GDP growth of more than 10 percent per annum. Incidentally, this is a good response to those who state that our growth rate can not be over 4 percent per year. Here you go, you can easily add another 2 or 2.5 percent to that, and end up with 5 or 6 percent growth.

We need cheap and longer-term money for financing the economy, for further suppressing inflation, for offering competitive bank rates. I am asking the Government and the Central Bank to think about mechanisms for addressing these challenges. I know very well that certain experts will disagree and I know what they will say, that providing longer-term money is not the Central Bank’s job, that this type of money is represented by citizens’ and companies’ savings, pension money and so on. Yes, we all know this. But we also know that the Federal Reserve System of the United States, the European Central Bank, and certain other central banks have it written right in their charters that they are obligated to consider jobs and ensure the economy’s growth rate.

“In the 21st century, the vector of Russia’s development will be the development of the East. Siberia and the Far East represent our enormous potential. And now we must realise our potential. We have the opportunity to assume a worthy place in the Asia-Pacific region, the most dynamic region in the world.”

I am not calling on you to review anything in our legislation right now; I am simply drawing your attention to the fact that we must all be concerned with the key issues of our nation’s development. Our national savings must work in our country and for our country; at this time, however, very little of the National Welfare Fund’s resources are invested into national development. We came to an agreement (I remember this very well and I concur with it) that after the Reserve Fund surpasses 7 percent of the GDP, we can direct half of the surplus revenue into the Russian economy, primarily toward infrastructure projects.

Now a few words about possible adjustments to our previous agreements, which I spoke about in the very beginning. By the end of this year, the Reserve Fund and the National Welfare Fund already amount to approximately 9 percent of GDP combined, which means that we will have a certain cushion of security in place. Thus, beginning in 2013, after the establishment of a corresponding management entity, I suggest that some of the National Welfare Fund’s resources, perhaps about 100 billion rubles [3.3 billion dollars] (some experts think it should at least this amount) should be invested in Russian securities and implementation of infrastructure projects. Today, the government experts already agree with this. So I am asking the Finance Ministry to produce a corresponding plan. It is important that such projects pay for themselves.

I want to particularly stress the exceedingly important condition that they must be profitable and generate steady, guaranteed revenues, rather than requiring constant injections from the National Welfare Fund or the federal budget.

The tax system must also correspond to the needs of economic restructuring. We shall encourage investment and development, and shift the tax burden towards consumption, including excise goods and luxury real estate.

As a matter of fact, in many countries around the world and in Russia we always come back to this issue, namely the question of income tax, in one way or another. I have already talked about this, you know my opinion: we must keep the so-called flat tax. Even though a progressive tax might seem at first glance to be promoting social justice, in actual fact it does not. On the contrary, it will act as a burden for millions of citizens with average incomes. If you start to calculate what such a system will lead to, you’ll see that this will be the case.

And on top of this, what else will happen? Tax evasion; both the budget and the treasury will find themselves lacking the funds this tax supposedly generates. This means that we will have budget shortfalls in financing for the army, pensions, and the public sector. So that’s social justice. Therefore any action we take in this regard must be carried out extremely carefully. But here’s what we can do, what I think we must do, and what is also just: to impose additional taxes on so-called prestige, conspicuous consumption.

I would remind the Government that we must implement critical decisions relating to the so-called luxury tax already in the first half of 2013. This tax affects luxury properties and, no matter how harsh it might seem, expensive cars, even new ones.

Qualitative economic revival requires fair competition. As part of its efforts regarding national entrepreneurial initiative, I would instruct the Government to adopt a so-called road map for enhancing competition and to implement it next year.

Why do I think that this simply must be done in all important fields? Let me talk about this for a second, because I know very well how discussions go. They are usually sporadic: we talk about something important, confer, leave the conference room and forget about it, and the issue is put on hold. We need clear guidelines, we need documents we can track and whose implementation we can follow. I would ask you not to forget this and to make sure to do it.

“Russia stands for the principles of coherent and collective efforts in addressing challenges facing the world today. This position is absolutely consistent with contemporary realities. We propose projects that will unite nations and regions.”

The core of our economic policy should be the competitiveness of all essential aspects of doing business in Russia, from loan availability and tax incentives to comfortable administrative procedures and low inflation. This is almost a direct path to economic revival and to moving away from commodity dependence, because tens of thousands of new projects are becoming profitable. Projects that involve processing raw materials, engineering, light and heavy industry, the service sector, small and medium businesses and, of course, the agricultural sector.

A few words about agriculture. Demand for food is growing rapidly all over the world, especially in developing countries. As you know, Russia has more than half of the world’s arable land, 55 percent. In the next four to five years we must fully ensure our independence in all major types of food production, and Russia must then become the world’s largest producer of food. This will open up huge new opportunities for us.

We also should pay very close attention to environmental issues, and the environmental rehabilitation of various regions. In fact, we have already started working in some areas, such as the Arctic.

Our reference points are high quality environmental standards of development.

We intend to take full advantage of unprecedented funds allocated for defence procurement and modernisation of the defence industry in order to upgrade that industry, and to develop science and technology. Almost all sectors of the Russian economy will benefit from these funds via the implementation of related orders. We must strengthen our position in space, nuclear energy, revive key sectors such as aviation, shipbuilding, instrumentation, and establish them on a new foundation, at a new level, based on new technologies.

We have begun to rebuild our national electronic industry, and done so with the active participation of private capital. I believe that we need to prepare a road map for the development of new industries similar to the road maps for improving the investment climate. These industries include rare earth metals and composites, biotechnology and genetic engineering, IT, new urban planning, engineering, and industrial design.

“Russia’s economy has demonstrated its ability to grow quickly and qualitatively. We were able to maintain and strengthen our development potential, and to set its new horizons.”

A long-term prognosis for Russia’s scientific and technological development through to 2030 is currently being finalised. It highlights specific ways to both revitalise traditional sectors and to penetrate new high-tech markets. A special fund for promising research on the defence technologies of the future will be established.

Colleagues,

Imbalances between regional development, the labour market, and the social sphere are direct consequences of a commodity-based economy. As a rule, finding a job today with a decent salary is only possible in Moscow and St Petersburg or in resource-rich regions, and quality education and medical care is only available in several major cities. This is where people go to work, study, receive medical treatment, this is where young people want to go, and therefore other regions lose active citizens willing to work and be of value. Imperatives of our time include a decisive step towards decentralised development, a new geography of economic growth and the labour market, new industries and new centres for industry, science, and education, a new, modern social environment in all Russian regions, cities, and towns, including a barrier-free environment for individuals with limited abilities.

At present the difference between regional incomes is extremely high. You are well aware that ten regions generate more than half of Russia’s revenues. We must consistently work to ensure that all Russian regions without exception become economically self-sufficient and subjects of the Federation in the fullest sense. Therefore, we must slightly change the current logic of relations among state budgets at various levels. May the Finance Ministry not be frightened by these words.

We should create and strengthen the economic base of our regions, and help those who are working proactively there. One priority measure at the municipal level involves the reallocation of the bulk of taxes collected from small businesses, currently working under a special tax regime, to municipalities. In addition, we are eliminating many federal tax breaks for the properties and land of various legal entities. These funds will also flow into regional and local budgets.

However, I now address the Government first of all since you know what I’m referring to, we will get rid of the tax breaks for infrastructure companies and infrastructure monopolies, among others. This means that they will have to pay more. But not everyone is ready to start paying new amounts, because at that point we could completely deprive them of investment possibilities. We have already agreed on a smooth transition period and compensation for these companies. We absolutely must think about this. Such decisions are not taken casually, though of course it is necessary to move in this direction, and we will do so.

I also believe that as of 2014 regions should receive the right to tax real estate based on its cadastral value, and this would strengthen a given region’s tax base. But this must be the regions’ own choice, and along with this we must finish all work related to evaluating properties and verifying data about their owners.

I want to stress that we have to examine in detail all aspects of Russia’s balanced regional development, including education. It would be correct to provide priority support to those universities working in the regions and cooperating with major companies there, companies with which they promote research and development. Already during their studies the graduates of these universities are linking their futures to the places where they live and study.

We are to create more publically-funded places in precisely these universities, and the government must support their development programmes. Along with this it is essential that business takes part in the management and funding of these universities. Among other things, the above will stop the practice whereby a lot of resources are spent on training students in Moscow and St Petersburg, students who do not even plan to work in their field of training.

We need a kind of investment map of Russia, providing investors with clear information about which regions are more profitable, better to work in, to set up production facilities, and what forms of state support will be available to businesses in the near future. By using our competitive advantages we should encourage production to migrate from other Russian regions, just as we are currently doing in the automotive industry. Just yesterday I met with the CEO of one of the world's largest companies in this field.

We are currently moving in this direction. This is helped by the fact that Russia's WTO accession gives us the opportunity to relocate production to Russia that is designed not only for the domestic market but also for export. In the 21^st century, the vector of Russia’s development will be the development of the East. Siberia and the Far East represent our enormous potential, as [Mikhail] Lomonosov once put it. And now we must realise our potential. We have the opportunity to assume a worthy place in the Asia-Pacific region, the most dynamic region in the world.

Just recently at a State Council Presidium meeting we discussed in detail specific steps to stimulate economic growth in the Trans-Baikal and Far Eastern regions. I will not repeat everything that we agreed to do. But one of things we agreed on was creating attractive living conditions there. By the end of the first quarter of 2013, the Government must work out in detail its proposed measures, including tax breaks for so-called start-ups (new businesses), plans for the development of energy, infrastructure and so on. This must absolutely be done, and I would ask you to pay you utmost attention to this task.

In addition, I would ask the Government to submit proposals concerning the future development of Kaliningrad Region, especially since the law on special economic zones will expire in 2016.

We need a real breakthrough in the construction of roads. In the coming decade we should at least double current rates of road building. Here too different calculations exist, but it is absolutely correct to consider that current figures must double.

Our most important development priority is regional aviation, as well as seaports, the Northern Sea Route, the Baikal-Amur Mainline (BAM), the Trans-Siberian railway, and other transit corridors. It is not enough to simply think about all of this, we must work hard in all these cases. We have to ensure the unity of Russia’s entire territory, in the full sense of transport connectivity.

Dear friends,

The main feature of the present era is that no one can solve global economic and political problems alone. In fact, this has always been the case, in the 1990s as well. Even though quite recently, ten years ago, some people thought that the world had become unipolar; some of my former colleagues told me so at the time. Today, no one thinks so.

It is absolutely obvious to everyone that the modern world is becoming increasingly multipolar. This creates both risks and opportunities. Risks will prevail when each player plays their own game, if they are not relieved of the illusion that it is possible to manage chaos (you know there is such a theory). And if people stop sowing such chaos, risks will not prevail.

Russia stands for the principles of coherent and collective efforts in addressing challenges facing the world today. This position is absolutely consistent with contemporary realities. We propose projects that will unite nations and regions. The experience and reality of the past 20 years as well as simple common sense put everything into its true place. And it is natural that interest in integration is growing in America (both North and South America), in Europe, and in Asia, and these processes are gaining momentum. Why should we remain on the sidelines? On the contrary, together with our immediate neighbours we must make use of all our advantages.

Our immediate neighbours are also showing more interest in integration processes. One example of this was their very practical and pragmatic approach to developing and adopting the agreement on the CIS free trade zone. By the way, I am grateful to our parliamentarians who were the first to ratify this very important document.

We will move towards closer integration. This is exemplified by the Customs Union and the Common Economic Space of Russia, Belarus and Kazakhstan, which are already functioning effectively. We have begun to establish the Eurasian Economic Union, and naturally we will continue to work at this and achieve this goal.

Dear colleagues and citizens of Russia,

We had set ourselves the goal of doubling our GDP and by the end of 2008 we were very close, somewhere in the range of an 80 to 85 percent increase. It was only the global crisis that slowed our momentum. And yet there was a reason we set such a high bar for ourselves, such a difficult challenge. Russia’s economy has demonstrated its ability to grow quickly and qualitatively. We were able to maintain and strengthen our development potential, and to set its new horizons.

What do I want to say? Using 1999 as a benchmark, our GDP per capita has almost doubled. Federal and consolidated budgets have increased, not by a certain number of percentage points, but by 2.6 times. Public debt in relation to GDP decreased almost tenfold. It went from more than 100 percent of GDP (I think it was about 120 to 125 percent) to 10 and some percent. Moreover, our external debt fell to 2.5 percent. The rate of inflation fell sixfold: in 1999 it was 36.5 percent and in 2011 6.1 percent. This year it will increase a little but remain less than 7 percent, at approximately 6.5 percent.

By 2000 Russia's population had declined (just think about these numbers, you know them well but I would like to remind you of this tragedy), and was declining by a million people almost every year. And it seemed that the disaster could not be stopped. At the time, demographic forecasts seemed like the country’s final judgment.

But we were able to reverse this destructive trend. Launching demographic programmes allowed Russia's population to stabilise, as I already said, and begin to grow as of 2010. This represents our crucial achievement. I want to draw your attention to this, and not to say: “Oh, look at how great we are!” No. I stress this so that we understand that people believed us, and changed their planning horizons accordingly. They believed that stability is essential for development and the improvement of living conditions. I say this because we should value such trust and take it into account in our work.

All growth rates I mentioned bear witness to enormous changes in both economic and social development. But the main thing is that we – as a country, a society, and citizens – can all overcome hardship and resolve significant problems. And we must remember that we have accomplished this difficult journey in commendable fashion, and achieved our goals step by step.

We have a lot of work ahead of us, and such work is always required if we want to move forward. And we need everyone’s contribution today, not tomorrow.

Why do I cite these figures? Our country has historically had an attitude to life that involves living for the future, for our children. Of course this is a very important and noble task and purpose. But it seems as if one’s own prosperous life is always being delayed, postponed, and postponed for the future. And this was almost always the case in Russia, for all generations. But let me go back once again to the reason I cited these figures: the time has come to drastically improve our situation. We are doing this and we can do it. If we continue consistent national development policies, harness our development to common creative work, if we work with dignity and spare no efforts, then we will achieve our goals and accomplish all the tasks before us.

Thank you for your patience and attention.

(The national anthem of the Russian Federation.)

Address to the Federal Assembly

2015-03-20T18:01:33+04:00

In particular, Dmitry Medvedev proposed a number of initiatives to further develop the country's political system. In addition, the President outlined his position on the main directions of domestic and foreign policy, economic modernisation and social development, defence and security.

* * *

President of Russia Dmitry Medvedev: Citizens of Russia, State Duma deputies and members of the Council of Federation,

Yesterday, the State Duma of the sixth convocation held its first meeting. I congratulate all the deputies on the start of their work. I wish you every success and would like to assure you of my openness to dialogue on all issues.

Following the parliamentary elections in Russia, various statements were made regarding their results, both in Russia and abroad. Some people were pleased with the elections’ results, others were not entirely satisfied, and still others were not happy at all. It was the same after the previous elections. This always happens.

I would therefore like to stress that we treat any criticism of state institutions and individual officials with the utmost attention and respect. We draw relevant conclusions where criticism is valid, restore justice where laws had been broken, take the necessary decisions in consultation with the main political forces, openly state our position and justify it if the criticism is unfounded.

People have a guaranteed right to express their opinions using all legitimate means but attempts to manipulate Russian citizens, to mislead them and incite social discord are unacceptable. We will not let instigators and extremists involve society in their reckless activities, and we will not allow foreign interference in our internal affairs.

”People have a guaranteed right to express their opinions using all legitimate means but attempts to manipulate Russian citizens, to mislead them and incite social discord are unacceptable.“

Russia needs democracy, not chaos; it needs faith in the future and justice. The fact that society is changing and people are increasingly expressing their views and making legitimate demands on the authorities are a positive sign, a sign of a maturing democracy. In my view, this is a positive trend that will benefit our country, just as increased political competition, which forces us to work more efficiently and to respond more promptly to the problems of millions of Russian families.

Today I will state my proposals for the near future aimed at expanding people’s opportunities to influence Russian state policy and the decisions on matters that involve their rights and interests. But first, if I may, I would like to talk about the results of our efforts.

I am sincerely grateful to those who have given their support to my work as President of Russia in the past four years. Bear in mind that the start of my term in office coincided with a very difficult period. Everyone remembers the events in South Ossetia in August 2008. Just a month later we faced the most severe global financial crisis. This has left a serious mark on all of our work. The problems generated by the crisis have remained unresolved to this day in many countries. I would like to name our most important achievements of this challenging period and the main results.

First. We have successfully overcome the most difficult period of economic turmoil and returned to pre-crisis indicators. The economy is growing rapidly: by 4% per year, which exceeds the recovery rate in most leading economies. Russia’s sovereign debt remains at a minimum. Our country has become the sixth largest economy in the world. We have fulfilled our social obligations in full. Pensions and wages of most public sector employees grew faster than we had planned before the crisis. Today, there are no pensioners in the country whose incomes are below the regional minimum subsistence level. The average size of the retirement pension has increased by over 50% in the past four years (and this is growth in real terms) and the average salaries of teachers and doctors have approached the regional average.

This year, we had the lowest inflation in the history of the new Russia. It is less than 7% and may even be closer to 6%. Salaries, social benefits and real incomes are the highest since the Soviet period, although they are still far from our targets. There are too many low-income families in the country although in 2011 their number came close to the lowest in 20 years.

The economic crisis has clearly shown that setting aside a part of the oil revenues to make reserves has been and remains a successful policy. Due to these savings the Government and the Bank of Russia prevented a currency crisis. Now the volume of gold and foreign currency reserves is close to the pre-crisis level, while people’s bank deposits have increased by almost 80%. Lending volumes have also grown.

”The political system’s modernisation has made it more efficient. I have suggested measures for its development every year in my Addresses. All these measures have been implemented, and I would like to thank the Federal Assembly for it once again.“

We have provided strong support to manufacturing, construction and infrastructure companies, as well as small businesses. Big companies received funding on the basis of a detailed analysis of development programmes and their readiness to preserve and create jobs.

Agricultural producers also received systemic support. This has allowed the whole industry and the food market to fully recover last year’s losses caused by the drought and wildfires.

The number of unemployed in the past two years has decreased by almost two million people. Today, the unemployment rate in our country is one of the lowest in the world.

Overall, Russia’s anti-crisis policy has been more effective than in many other countries or in previous crises, of which, as we know, there were many. I think we passed this difficult test with flying colours.

Second. We have ensured full implementation of demographic programmes, which became one of the factors in demographic stabilisation. More than 6 million children were born in Russia over the past four years – and that is an excellent figure, a 20-year record. The mortality rate declined even faster than we initially expected.

Modern Russia has the highest life expectancy in its history. It has increased by almost three years since 2006 and has reached just under 69 years. Life expectancy for women – because they take better care of themselves – is nearly 75. We had never had such figures before. Never!

Naturally, we must strive to make these numbers even higher. That is the aim of the new healthcare modernisation programme. All the decisions required for its implementation have already been taken.

Third. A key theme of my Address last year was the policy on motherhood and childhood. A great deal has been achieved in this area. By the end of this year Russia will have 23 perinatal centres. We poured enormous resources into the development of paediatric services. Medical examinations of schoolchildren will now be held throughout the school years. Another hour of physical fitness has been introduced in the school curriculum. A law has been adopted that allows for the use of maternity capital for private housing construction. 38 regions have decided to pay an additional regional maternity capital, as I told you here a year ago.

The regions are entitled to provide free of charge municipally-owned land plots to large families. The tax on charity donations to individuals has been abolished, including assistance to children. Commissioners for children’s rights have been appointed and begun to actively work in almost all regions. Public councils are set up at institutions for children who have no parents or guardians, which help address these children’s problems more promptly.

Fourth. At the peak of the economic crisis, I initiated a shift in Russia's development strategy: the modernisation of our economy. I am sure it was the right decision. Today we can see the initial results in all priority areas of modernisation: we have achieved the highest level of funding for research and development since the Soviet times, built an efficient system of development institutions and gradually decreased the energy intensity of the Russian economy. This means – and I want everyone to stop and think about it – that the share of the utilities costs in family and company budgets will eventually stop growing, and if energy is used rationally, it can even be reduced.

We have launched production of new drugs, including for the treatment of infectious diseases and cancer. An entire line of next generation products has been developed together with our foreign partners.

”I propose a comprehensive reform of our political system. I hear all those who talk about the need for change, and I understand them. We must give all active citizens a legitimate opportunity to participate in the country’s political life.“

We have created supercomputers supporting new competitive technologies in the nuclear and aerospace industries, shipbuilding and automotive industries; completed the development of technical documentation for the construction and operation of a new generation nuclear power station that will be highly resistant to external shocks, as well as have significantly higher economic efficiency rates.

Half of Russian regions already use the services of the GLONASS navigation system and are implementing remote sensing projects. The number of home broadband Internet connections has doubled in the past three years and now the country has nearly 55 million active subscribers. I want to emphasise that this is the highest figure among all European countries.

Television and radio networks are switching to digital broadcasting. This increases the freedom of choice and stimulates competition. As promised, Russia will have more than 20 freely available TV channels by 2015, and the number of channels offered by private broadcasting companies can be measured in hundreds.

A few words about another major modernisation project, the Skolkovo Innovation Centre. I am aware that there were many sceptics when we launched this project, and there are some that remain to this day. But what do the facts tell us? Skolkovo corporate residents include over 300 companies engaged in advanced research and development. A modern technological university is being built, partnership agreements have been signed with leading global companies, which are setting up their research centres at Skolkovo. This is only the beginning but I'm confident that Skolkovo will become an example of the first successful global project in science, education and innovation in 30 years; the first but I'm sure it will not be the last.

Fifth. The political system’s modernisation has made it more efficient. I would like to remind you that I have suggested measures for its development every year in my Addresses. All these measures have been implemented, and I would like to thank the Federal Assembly for it once again.

Yes, we have improved the quality of popular representation and stimulated the development of political competition. Over the past few years the role of political parties in our country has increased. They have obtained the right in case of winning the elections to the region’s Legislative Assembly to submit their nominations to the President for the post of the highest regional official. The parties were given the authority to implement supervision functions. Now, the Government makes an annual report to the State Duma on its efforts. In the regions senior officials report to the legislatures. At the local level, the practice of reports of municipal entities’ heads to representative bodies has been made mandatory. The mechanism of removing municipal officials from office has been introduced.

The parliamentary parties have obtained guarantees of equal coverage of their activities in the state media. Meetings of the State Duma and regional legislative assemblies are being broadcast live online. This certainly increases the openness of the parliament’s work and allows the parties to inform the voters of their positions online. In order to ensure the rights of political parties not represented in the legislature, they have the opportunity to make regular appearances in the State Duma and regional parliaments.

The new procedure for forming the Council of Federation, which came into effect this year, should also be viewed in the context of expanding popular representation. Now only the people who have won federal, state or municipal elections will be able to sit in the Upper House of Parliament. Finally, the electoral threshold in the State Duma elections has been decreased to 5%.

”A package of draft laws on decentralisation will be submitted to the State Duma. Their implementation will allow us to seriously redistribute powers and budgetary resources in a way that favours our regions and municipalities. It is time to bring the government’s most important functions closer to the people they serve.“

Sixth. Our civil society has become stronger and more influential; public organisations have significantly increased their activities, as was confirmed by the events of recent weeks. I believe an increase in non-profit organisations’ activity is a key achievement of recent years. We have done a great deal in their support, as well as for the development of volunteer movements in the country. Today Russia has over 100,000 non-profit organisations. The registration procedure has become far easier for them, and the inspections of non-profit organisations have been significantly reduced. Many of them receive direct assistance from the state. Annual charity donation volumes are now close to 100 billion rubles. Millions of people take part in volunteer initiatives, getting involved in landscaping, providing social assistance to families in difficult situations, searching for missing persons, protecting the environment and many other useful initiatives. All this deserves our respect and benefits our homeland.

Seventh. We have made considerable progress in reforming the judicial system, particularly criminal legislation, making it more just, humane and corresponding to our social development goals. At my initiative, the Federal Law on Amendments to the Criminal Code has been adopted. In line with these amendments, the sentence of imprisonment for a first-time offender who has committed a minor crime can be imposed only in the presence of aggravating circumstances. The list of alternative penalties to imprisonment has been greatly expanded. These include multiple fines, correctional and compulsory labour. The courts are increasingly granting bail and placing defendants under house arrest.

In addition to the relaxation of many Criminal Code provisions, criminal responsibility has been increased for grave and especially grave crimes such as terrorism, aiding and abetting terrorism, child abuse, sexual abuse of minors and other violent crimes.

Finally, we have launched a law enforcement reform, which opened the doors to a large number of professionals who actively protect the rights and legitimate interests of our citizens.

Eighth. On my instructions, a large-scale anti-corruption effort is being conducted. Russia has acceded to international conventions in this sphere and adopted the required legislation for the first time in the history of our state. Now, state and municipal officials who have been found guilty of corruption offences can be dismissed from office for the loss of confidence, in addition to other forms of punishment.

Since 2010, all state officials, military personnel and law enforcement officers must declare their incomes and assets. The information contained in the declarations is verified and the results are analysed by special commissions. As a result of this work, more than 3,000 officials have been prosecuted just in the first six months of 2011.

I would like to stress that this is only the beginning of this massive and systemic war on corruption and we will fight it vigorously, systematically and consistently.

Ninth. As part of my decision to actively upgrade our Armed Forces, the troops were equipped with modern equipment and weapons. We have begun the transition to the professional army. As early as next year 220,000 officers and over 180,000 soldiers and sergeants will serve under contract.

The state armament programme to 2020 places the emphasis on new weapons and equipment created with the use of modern technology. A large part of the state defence order is placed for several years ahead. This significantly improves the opportunities for defence companies’ development. In turn, they must do their work well and on time.

”In order to further counter corruption, I feel we should start monitoring spending by individuals holding public office or serving within certain federal state services, in cases when their expenditures clearly do not correspond with their income. I am talking about declaring major expenditures for purchasing land, other real estate, vehicles and securities.“

Despite the challenges of the crisis, we have taken steps to make our army and navy more compact, mobile and combat-ready. By 2010, the number of troops amounted to one million people and it became possible to build truly modern and effective Armed Forces. A new high-tech arm has been created, the Aerospace Defence Forces. The intensity of the operational and combat training has increased significantly. Until recently, most of the exercises were held at the headquarters or on the maps, while now strategic scale exercises are held annually, involving all types and kinds of troops.

We have achieved significant results in improving the social guarantees for military personnel. On January 1, 2012 their pay will increase by almost 200%. This will make a qualitative change in the Armed Forces. Officers will have additional motivation to serve honourably. The financial situation of retired military personnel will also improve. The rise in military pensions from January 1, 2012 by not less than 1.6 times on average is an important step in showing appreciation for their service to the fatherland. These pensions will increase annually by at least 2% above inflation.

Finally, for the first time in the history of our country’s Armed Forces we have come close to tackling one of the toughest and most critical challenges: providing servicemen with permanent and service housing. In 2009–2010, the Defence Ministry acquired nearly 100,000 flats to provide permanent housing, and in 2011–2013 another 80,000 will be acquired for this purpose. Those who signed their contracts after 2007 will be scheduled to receive housing in line with the savings and mortgage system. The number of participants exceeded 180,000 people in five years, and 20,000 flats have been purchased.

By 2014, a specialised service-housing fund will be established for the stuff numbers stipulated for the new Armed Forces. Thus, the military housing problem will be resolved completely.

Tenth. Our foreign policy has become more modern, working for the national modernisation goals. Breakthrough results have been achieved in the integration processes with former Soviet states. From July 1, 2011 the Customs Union of Belarus, Kazakhstan and Russia came into force, and more recently an Agreement on free trade zone was signed within the framework of the CIS and will start operating next year. I am very pleased that together with our colleagues we have been able to finally move forward on these major tasks.

I would also like to emphasise a very practical aspect. As a result of removing the barriers to mutual trade, the market for the free sale of Russian products expanded by 20%, according to experts’ conservative estimates. The volume of trade within the Customs Union has increased by one third. A competitive environment is being formed in its member states’ markets and new jobs are being created. The transit potential is used more efficiently. Businesses have better conditions for entering international markets.

We will continue economic integration. Common Economic Space for Russia, Belarus and Kazakhstan will be launched on January 1, 2012, and the free movement of goods will be followed by the free movement of services, capital and labour. The aim is to create the Eurasian Economic Union by 2015, which will largely determine the future of our countries.

We have Partnership for Modernisation agreements with 23 EU countries, as well as contracts for dozens of projects. We have stepped up joint efforts with the EU on easing visa restrictions with a view to their complete abolition.

Finally, another very important achievement: after 18 years of negotiations, Russia has acceded to the WTO. The negotiations marathon ended on terms that fully correspond to our country’s interests. Now we must learn to work in this organisation, drawing the maximum advantages from its membership. WTO accession is a significant factor in Russia’s integration into the global economy. It meets both our national interests and the objectives of stabilising the international trading system.

One of the most important breakthroughs in the field of international security in the recent years is the conclusion of a new Russian-US Strategic Arms Reduction Treaty. It works directly on strengthening strategic stability and non-proliferation. In addition, our initiative to conclude a treaty on European security initiated a serious dialogue on the establishment of a new architecture of equal and indivisible security in the Euro-Atlantic region.

On the whole, we have achieved a great deal. The past years can be considered successful, and some of the achievements are unprecedented. Once again I sincerely thank all those who have actively supported my plans and initiatives. I believe that our efforts on economic modernisation and upgrading the life of our society should be the main tasks for those who will govern the state in the coming years.

Colleagues, now let us move on to the practical aspects of our country’s modernisation. I would like to start by telling you what I, as President of the Russian Federation, intend to achieve in the coming months.

”I suggest we work on creating public television in the near future, possibly on the basis of one of the existing federal channels. In this case, none of the owners of this new type of media will have a determining influence in making any decisions – neither the government nor the private owners. I am certain that this kind of public television can make our information environment more competitive and therefore more interesting.“

First. Today, at the new stage of the nation’s development and in support of the new initiative put forward by Prime Minister Vladimir Putin, I propose a comprehensive reform of our political system.

I would like to say that I hear all those who talk about the need for change, and I understand them. We must give all active citizens a legitimate opportunity to participate in the country’s political life. To achieve that, I believe the following measures are necessary.

To return to direct regional elections for the heads of Russian constituent entities.

To introduce a simplified procedure for the registration of political parties. My suggestion is that it should require an application signed by at least 500 people representing no less than 50% of the regions.

Next. To abolish the requirement to collect signatures for the elections to the State Duma and regional legislatures.

Finally, to reduce the number of voter signatures needed to participate in the presidential elections to 300,000, and for candidates from non-parliamentary parties to 100,000.

In addition, I propose to change the State Duma election system. I consider it expedient for strengthening the links between the deputies and the electorate to introduce proportional representation of 225 districts. This measure will allow each region to have a direct representative in parliament. Now, unfortunately, as everybody knows, some constituent entities of the Russian Federation do not have a single deputy elected by local residents.

I also suggest changing the procedure for forming the Central and regional election commissions. We should have broader representation by political parties in the election commissions. The parties must have the right to recall their representatives in the commissions before term, if necessary. I will soon submit the corresponding draft laws to the State Duma.

Colleagues, this is not the final list of initiatives. But let’s be patient. Ancient Chinese philosopher Lao Tzu once said that governance must be consistent, business must spring from opportunities, and all actions must take time into account. Nevertheless, we will take additional necessary steps in the future.

I suppose that the measures already proposed will make our nation’s political system more efficient, better able to meet the needs of our citizens. These changes are particularly relevant ahead of a very important political event: Russia’s presidential elections. The elections must be just, transparent, and meet modern standards for lawfulness and fairness.

Second. A package of draft laws on decentralisation will be submitted to the State Duma. Their implementation will allow us to seriously redistribute powers and budgetary resources in a way that favours our regions and municipalities. I promised to do it, and I will do it. It is time to bring the government’s most important functions closer to the people they serve. Naturally, we will do this step by step, over the course of several years, within the framework of the next political cycle.

The sources of revenue for regional and municipal budgets, including their own, will be expanded significantly. We will discuss the budgets’ volumes separately, but I feel the figure may be as high as one trillion rubles. This should create the conditions for our territories’ successful development, for better fulfilment of the state’s obligations to the people. In particular, we will gradually abolish federal exemptions for regional and local taxes. The timeframe for this should be analysed by the Cabinet separately. Many regions will impose real estate tax instead of property tax. In addition, regions and municipalities must be given much broader rights in managing the funds coming from the federal budget. Excessive regulation, which impedes independent work on a local level, will be eliminated and the system of financial support for regional budgets will encourage the diversification of the regions’ own revenue base.

Finally, regional heads will get the right to bring up the issue of delegating a significant number of public powers from the federal to the regional level – if they are ready for it, of course. At the same time, some of the powers may be additionally given to all regions by a federal law – first and foremost, those powers that directly influence the investment climate and socioeconomic development of those regions. At the same time, we should seriously strengthen the material base of municipalities, of local self-government as an institution closest to the people. Municipalities must get a solid and predictable financial base for their work.

There will also be other changes, which we will discuss in the coming months. And it is certain that the process of power decentralisation will go hand in hand with higher political liability of regional and municipal leaders as regards the final results of their work on developing their territories and increasing the quality of services offered to their citizens.

Third. During the first half of next year, we must replace our “beloved” 94^th law with a federal law contemplating the creation of a federal contract system. New procedures for government and municipal procurement must ensure high quality in the fulfilment of government orders and prevent monopoly price-setting and multi-billion ruble corruption schemes.

”I hope we will overcome the new challenges as well, regardless of who becomes the President of Russia or the Prime Minister. There is a set of absolute priorities that the nation’s leaders will pursue in order to ensure its successful development.“

In order to further counter corruption, I feel we should start monitoring spending by individuals holding public office or serving within certain federal state services, in cases when their expenditures clearly do not correspond with their income. I am talking about declaring major expenditures for purchasing land, other real estate, vehicles and securities.

By introducing this provision, along with larger fines established by our criminal legislation, possibility of being dismissed on a loss-of-confidence basis for corruption-related violations, and other existing measures, we are essentially implementing the goal of the UN Convention against Corruption as regards establishing liability for unlawful enrichment. And this liability is established in accordance with the principles of our legal system.

I also feel we should look into broadening the list of individuals whose incomes are subject to declaration.

In addition, we need to think about how to radically reduce the economic interest in committing profit-motivated crimes, in addition to already-existing measures (I am referring to larger fines and confiscation).

Finally, I think it would be expedient to impose restrictions on transactions between state institutions and profit-making organisations whose major shareholders include close relatives of the heads of such government institutions or state-owned companies. The number of cases like this in our nation is enormous.

Fourth, we are in the final stage of a full-scale transfer to electronic document management system as regards carrying out state functions and providing public services to our citizens.

Beginning on July 1, 2012, all regions and many municipalities will switch to electronic interdepartmental interaction. We are expanding our citizen’s opportunities to receive many state and municipal services remotely, including through the use of a corresponding Internet portal and with the help of universal electronic cards. In just a few months, millions of people from all across our nation, from the most distant of our regions, will start using them. It will be easier for citizens to communicate with the government in real time and to save time and money, in addition to the fact that electronic technologies provide the best level of transparency, which is essential in countering corruption.

Fifth. Soon, we will begin implementing programmes I have initiated to support families with three or more children, as well as teachers, doctors, young engineers and scientists. They must have better opportunities to improve their living standards with the help of a preferential mortgage.

Sixth. One of the important challenges for all government agencies and for society as a whole is the full-fledged implementation of the Barrier-Free Environment programme. I would like to point out that we have allotted a significant amount of funding for its implementation. Step by step, we will reduce barriers for people with disabilities; we will work on helping them get jobs and significantly improve the number of schools providing inclusive education. Our attitudes toward people with disabilities, the efforts we are making, are imperative for reducing the barriers and restrictions in their lives and opportunities. This is important for all of us, for all of society.

Seventh. We will implement all plans as regards public sector development. In particular, in 2012, we will step up work to deal with the shortage of places in pre-schools. For children aged 3+, I think we can fully solve this problem in the next five years. At the same time, we must not just resolve it, but do so while increasing the salaries for teachers and educators working with children. We will also continue to increase salaries for schoolteachers.

At the same time, we must give particular attention to improving the situation on a regional and local level at cultural institutions that work directly with children – I am referring to art schools, museums, clubs and libraries. They are facing difficulties, and the Government must help the regions implement programmes in this area.

Eighth. The government will take additional measures to encourage placement of orphans in foster families. I will give relevant instructions to the Government in the next few days, and I also think that the regional heads must adopt programmes to provide medical, psychological, and educational support for families taking in orphans. They need help, and such help must be practical.

In addition, every region must finalize the development of social adaptation programmes for youth coming out of orphanages. Let me remind you that in many territories, this instruction has not yet been carried out.

Ninth. On further steps regarding criminal law and judicial proceedings. In the first six months of next year, draft laws will be prepared to help form a social rehabilitation system for citizens who have finished serving or are currently serving penalties that do not involve imprisonment.

A special role in conducing efficient criminal policy must be given to the judicial system. It determines whether our system for imposing penalties becomes more flexible, graded, and therefore, more just. We will continue working to improve the quality of the judicial corps. And one of the first steps is to create a system of independent examination commissions, which will assess all candidates for the high office of judge.

”One of our constant priorities remains overcoming the effects of the global crisis. It is our shared priority. It remains extremely important to fully implement the decisions made by the G20 concerning the stabilisation of the financial situation of a number of leading countries, and international financial system reform.“

The number of judges per capita in our nation is about the same as in most European nations. But remember, Russian judges look at far more cases, dozens times more, primarily because nearly 80 per cent of disputes in these nations are resolved with the help of reconciliation procedures, as was the case, incidentally, in pre-revolutionary Russia.

Unfortunately, at this time, we have practically no culture of holding a dialogue and finding mutually acceptable solutions. The laws we have passed on mediation barely work at all, and cases when an agreement is reached are still rare. We need to make our citizens better aware of the option to resolve disputes with the help of a qualified mediator, and to consider the expediency of implementing the mandatory use of mediation procedures in resolving certain types of conflicts.

And tenth. Two months ago, I suggested expanding beyond the framework of our established institutions and creating an extended, or perhaps more accurately, open government, aimed at resolving strategic and operative tasks by uniting all levels and branches of power, public figures, experts, and everyone who is prepared to participate in the processes of really running the state affairs, to contribute to the development and expert evaluation of the most important decisions and programmes. This kind of open government is, in essence, a social lift for the most active and talented people, a talent pool for renewing and reinforcing executive government in the centre and in the regions.

We have already launched the rotation of civil servants. The talent pools created in our nation encompass nearly one hundred thousand individuals. That is a large number. More than 200 people from the presidential talent pool created at my suggestion have been appointed to higher positions. But to be frank, this work needs to be done more consistently and more actively.

Finally, an open government is an effective way to get feedback that allows us to assess the efficacy of government policy, to build the work of the government in a fundamentally different way, to make it modern, relying on local initiatives. Eisenhower once said that the slogan of a true democracy is not “Let the government do it,” but “Let’s do it ourselves.” I absolutely agree with these words.

These mechanisms will begin to function in just a few weeks. And at the first stage this will happen within the framework of a special temporary group, a body created to serve these purposes. One of the first projects will be a public contest to identify the most pointless, suffocating bureaucratic procedures. Hopefully, we will have a corresponding website up at the start of the new year.

I would like to now address everyone who has encountered these procedures: please tell us about them, if you feel they are detrimental to normal life and the full-fledged development of our nation. Decisions will be made to eliminate or adjust certain procedures on the basis of your suggestions; we will also be making personnel-related decisions where necessary.

Overall, I believe we should use all modern information technologies to improve public communication. I am giving this my utmost attention. We need to use everything we have, and create the things we don’t have.

So I suggest we work on creating public television in the near future, possibly on the basis of one of the existing federal channels. In this case, none of the owners of this new type of media will have a determining influence in making any decisions – neither the government nor the private owners. I am certain that this kind of public television can make our information environment more competitive and therefore more interesting.

Colleagues, I have listed the challenges I will focus on in the upcoming months. Our citizens’ choice will determine what our federal and executive authorities will look like in the subsequent period. This is an important election that will decide our common future, particularly given the difficult situation unfolding around the world.

You know, the financial turmoil has already resulted in a decline of the leading nations’ financial capacity and a sharp slowdown in their growth rates. Fears about the main reserve currencies and concerns regarding the position of transnational banks currently have a greater influence on investors than the situation in the real economy. It is true, there is the developing world with a big share of the planet’s population, and this developing world continues to grow; but it cannot fully compensate for setbacks of the global economy’s former powerhouses. Thus, there are many politicians, heads of international organisations, leading economists and businesspeople who are talking about the onset of a global depression.

Friends, it is obvious that difficult times are ahead of us. I have already said that our nation withstood the test of the crisis admirably. The present team managed these trials. I hope we will overcome the new challenges as well, regardless of who becomes the President of Russia or the Prime Minister. There is a set of absolute priorities that the nation’s leaders will pursue in order to ensure its successful development. Incidentally, I was once again reminded of this during the election campaign, when I spent a particularly great deal of time talking to people; I came to a number of conclusions which strengthened my conviction that our choice of strategy and modernisation was the right one.

”An absolute priority for the coming years is providing an additional stimulus to integration processes and strengthening cooperation with our closest partners. The most important aspect of this work is strengthening allied relations within the framework of the Collective Security Treaty Organisation, especially in crisis situations, including by exploiting the potential of the Collective Rapid Reaction Force.“

Let’s see: clearly, the greater our achievements, the more acutely we perceive the problems which have not been resolved. The more successful our society is overall, the more clearly we see displays of poverty, unlawfulness, and injustice. People have grown tired of lacking the opportunity to resolve the most critical problems within a reasonable time. People are sick of their interests being ignored, or sometimes not even noticed at all.

It is unfair when thousands of families essentially live in barbaric conditions, lacking the simplest housing services and utilities, when children from distant villages cannot receive a normal education, when people do not have the opportunity to reach places where they can receive high-quality medical assistance or other modern services if they do not have the means to find a decent job, and often, they don’t have prospects for finding any kind of job at all.

It is unacceptable when entrepreneurs and investors in most regions spend months fighting their way through bureaucratic barriers and at every step they find themselves at the mercy of officials’ arbitrary rule, including those officials who lobby in the interests of their competitors. Finally, our citizens are suffering from unjust decisions and the ineffective performance of judiciary acts. I repeat: all these problems exist, but we are aware of them and know how the future leaders of our country should deal with them.

What do we need to do? First, Russia must create the broadest possible opportunities for the operations of small and medium-sized businesses. This would allow us to benefit from innovation and create millions of new high-performance jobs, to attract private, including foreign, investments for the creation of a modern industry, high-performance agriculture, so-called smart infrastructure, housing, and the service sector. I would repeat what I have already said more than once: improving the business climate is the best way to ensure dynamic economic growth. There is no better way!

I consider maintaining macroeconomic stability crucial to being able to successfully achieve these goals. With high inflation and interest rates, our goals would simply become unattainable, so we have to maintain low levels of budget deficit and public debt. The government’s financing commitments should be met primarily through income received from high rates of economic growth, the improvement of tax and customs administration, as well as the full implementation of the programme designed to privatise government assets.

Inflation and interest rates must come down to more acceptable levels through the development of competition and the reduction of associated legal and financial risks. This is necessary both for the development of our financial system and the creation of an International Financial Centre in Moscow, something that we have been working on lately.

Just as during the crisis three years ago, neither the Central Bank nor the Government have the right to tolerate disruptions in the foreign exchange market or the banking sector. For that reason we must all continue to live within our means and not fritter away our financial resources, especially in the light of the coming global recession. However, our intention to live responsibly does not mean that we should abandon new social programmes, or even reduce existing benefits. All these commitments will be kept in full. This applies to pensions, measures to support families with children, healthcare, creating a barrier-free environment for disabled people, as well as the development of education and culture.

Along with this, we need to determine the long-term development strategy of our pension system as soon as possible. I think we need to give citizens the opportunity to choose when to retire, based on the expected pensions to salaries ratio, and as soon as the crisis is over return to more actively encouraging voluntary retirement savings.

We must implement programmes to modernise healthcare in all Russian regions. New legislation on healthcare will allow us to determine the guaranteed volume and quality of health services. And when allocating resources to this issue we need to improve the material base of healthcare facilities and to increase the salaries of medical personnel. At the same time, our entire society must make every effort to ensure that a healthy lifestyle becomes the norm.

We need to continue implementing our national initiative: Our New School. Our priorities for the coming years are the comprehensive development of a new system for searching out and supporting young talents, a transition to a practice-oriented education model in middle and high school, and the transformation of schools into the central focus of multiple lives, not just places where children are taught. It is necessary to train a new generation of teachers who have all the skills required by modern pedagogy and receive a decent wage for their work.

”On a practical level we have decided to take up an ambitious task, namely the creation of the Eurasian Economic Union. This new arrangement will be set up to achieve the maximum benefit from our economies and produce simple, practical, tangible results for our citizens.“

We must correct another extreme condition or situation in higher education which has developed over the past 20 years. Unfortunately, in that field the trend remains, not classical or research universities, strong universities, but rather hundreds of third-rate institutions. We need to continue building a network of modern universities which meet international standards both in terms of the quality of education on offer and the level of research conducted.

We must purposefully work at ensuring a cultural revival. This may be one of the main factors in Russia’s modernisation. We must support both traditional schools and new projects in all artistic fields. We must pay special attention to upgrading infrastructure in the cultural spheres, using modern technologies, as well as increasing the salaries of those who have dedicated themselves to this important cause. Currently, the average wage in this sector is only half that of the average monthly wage in the economy in general – this is both unfair and completely shortsighted. Along with this, our cultural heritage should be as accessible as possible to children. Familiarity with the finest examples of the art world and, of course, independent creative work should be part of the educational process. But while there are numerous such opportunities in big cities, small and medium-sized ones require special support.

Harmonising interethnic relations within our country remains an absolute priority. Russia is inhabited by representatives of more than 180 peoples that speak 239 languages and dialects. This multicultural world is also Russia’s unique advantage, a world in which representatives of different nationalities and faiths have lived together for more than a thousand years.

In general, our society does not support extremism and other ideologies which are founded on hate. The scholar [Dmitry] Likhachev wrote: ”Nationalism is a reflection of a nation’s weakness, not its strength.“ This is a profoundly correct remark. But a significant tension between international and internal migration remains to this day, especially in large cities. Sometimes it results in ethnic hatred and conflict.

We need to address the economic foundations of large-scale internal migration, and of the concentration of emigration in some Russian regions. We should create the conditions for the rapid development of areas that are currently losing population.

In addition, we must pay more attention to our children’s cultural and moral education, and in fact teach them mutual respect and tolerance just as grammar or history are taught in school today. This is necessary in order to save our country.

And naturally, we must be consistent and uncompromising in our fight against all forms of extremism and crimes aimed at inciting ethnic hatred. Let me stress that this work remains a constant priority.

Dear colleagues, over the next decade our Armed Forces must be significantly upgraded. I just talked about the very important decisions taken regarding pay increases for troops and service housing. By 2020 at least 70 percent of Russia’s army should be equipped with new weapons and high-tech military equipment. A modern, well-equipped army would imply a consistent reduction in the number of conscripts and replace them with professionals who work on contract. By 2017 these professionals should number 425,000.

Russia's foreign policy should be dictated by its geopolitical situation, the need to ensure our national security, and our partnership with other countries in the interests of our citizens.

Not very long ago I spoke about our fundamental approach to the problem of missile defence. I will not go into detail about it again – everyone knows my opinion. I would just like to confirm one thing, namely that we are open to constructive dialogue and substantive work with our partners, if they are ready to listen to us. And we expect that they will take steps in our direction in order to achieve a mutually acceptable solution as soon as possible, as well as to preserve an atmosphere of trust. We look forward to continuing discussions and work on a new European Security Treaty.

We are interested in finding mutually acceptable solutions to all crucial outstanding issues on the international agenda. Thus, one of our constant priorities remains overcoming the effects of the global crisis. It is our shared priority. It remains extremely important to fully implement the decisions made by the G20 concerning the stabilisation of the financial situation of a number of leading countries, and international financial system reform.

I will remind you that in recent years I have talked about a range of initiatives in these fields. Specifically, they include the idea of establishing an international mechanism to prevent and eliminate the effects of disasters on the sea shelf, strengthening the international regime governing nuclear safety, the establishment of a new legal framework for energy security, the protection of intellectual property rights in the light of the development of the Internet and, finally, the fight against piracy at sea.

We look forward to working together to implement these proposals. Some of them have already been discussed in the G8 format, others in a broader one. I believe that it would be useful to exploit the potential of BRICS countries and the Shanghai Cooperation Organisation to promote them.

The events of these past months have demonstrated the relevance of our role as mediator in solving serious regional problems using political and diplomatic means, without foreign interference or the use of force and, of course, under the auspices of the United Nations.

”An important feature of the Eurasian Economic Union is its openness to our partners in the EurAsEC, CIS, and others too. Depending on how ready they are, they can join our work. We expect that this economic union will bring together the European and Asia-Pacific regions, and act as an influential force and prized partner in the global economy.“

Finally, an absolute priority for the coming years is providing an additional stimulus to integration processes and strengthening cooperation with our closest partners. The most important aspect of this work is strengthening allied relations within the framework of the Collective Security Treaty Organisation, especially in crisis situations, including by exploiting the potential of the Collective Rapid Reaction Force.

We need to make use of the enormous potential of the Customs Union and, naturally, that of the Common Economic Space that we just created.

On a practical level we have decided to take up an ambitious task, namely the creation of the Eurasian Economic Union. This new arrangement will be set up to achieve the maximum benefit from our economies and produce simple, practical, tangible results for our citizens.

An important feature of the Eurasian Economic Union is its openness to our partners in the EurAsEC, CIS, and others too. Depending on how ready they are, they can join our work. We expect that this economic union will bring together the European and Asia-Pacific regions, and act as an influential force and prized partner in the global economy.

Citizens of Russia, dear friends.

All these years I have been guided by one purpose, that of making life better for our citizens, making them feel safer and more confident with regards to the future of their children and grandchildren, and so that the older generation can live a decent life. This is why it was so important to maintain economic and political stability, and so critically necessary to begin our country’s modernisation. But there really are difficult times ahead.

The global depression could last for several years and the competition for minds, ideas, and resources will only intensify. Meanwhile, we are at the epicentre of this rivalry. But even in these difficult conditions we have no right to pause our development. Such work will require perseverance, strength and, naturally, time to overcome inertia and a great deal of old stereotypes. And we can only take this difficult path together.

It is true that we do not all perceive the world in the same way; sometimes we have very different ideas about priorities. There are different opinions about how to proceed, but at the end of the day we all want one thing, namely a better life for our citizens. Therefore we must learn to listen to each other, respect public opinion, and refrain from imposing top-down solutions.

And we must continue what we have begun, continue with renewing our state and society from its depths. That's why I want every one of us to become conscious of the responsibility he or she bears for the way their friends and family live, the success of their own affairs and, by implication, the future of our beloved country.

I am fully aware of my responsibility for everything that remains to be done. I believe in each of you and I know that we will succeed.

Presidential Address to the Federal Assembly of the Russian Federation

2015-03-20T18:02:02+04:00

Dmitry Medvedev outlined his views on the main issues of the nation’s economic development, its social sphere, national political system, national security and defence.

President of Russia Dmitry Medvedev: Citizens of Russia,

State Duma deputies and members of the Federation Council,

Speaking in this room a year ago, I presented my political strategy, which was to modernise our economy and give impetus to progress in all areas, based on democratic values; to raise a generation of free, well-educated and creative people; to raise the living standards of our people to a fundamentally new level; to confirm Russia's status as a modern world power whose success is based on innovation.

These processes, modernisation in our country, began at a time, which was hard for the whole world, a time of the global crisis. Compounding this were the heat wave and wildfires of last summer. Yet, despite the difficulties, on the whole we were able to accomplish quite a few things, and I would like to thank all those who contributed to renewing our society.

We managed to stabilise our economy after a significant downturn, and this year we expect economic growth of 4%. Despite the growth of food prices, which regrettably occurred throughout the world, we prevented an inflation upsurge. Our objective for the next three years is to bring it down to 4–5% a year.

Almost 150 billion rubles were allocated to the agricultural sector in order to mitigate the consequences of the drought. Our decisions will stabilise the situation in this key industry, help the farmers and prevent a drop in living standards in the affected areas. I will continue to personally monitor the implementation of these decisions.

The number of the unemployed is now about 5 million people, a reduction of 2 million since the crisis peaked. This is a significant achievement. Sovereign debt is at a very low level. Russia's international reserves today amount to about $500 billion, much more than at the end of 2008.

”Taking care of future generations is the most reliable, smart and noble sort of investment we can make.“

After the anti-crisis measures, which were unprecedented in scale, we are now moving on to a more balanced budget policy. The budget deficit, unfortunately, remains quite high. We will reduce it lest it becomes an obstacle to development. All the leading nations have taken up similar obligations.

Of course, the economic situation is still quite complex. We haven’t overcome all the consequences of the crisis yet, and we must admit this openly. But we will fulfil our social obligations regardless of anything.

The real income of our people has grown by approximately 5% over the last few months. Next year, we are planning to raise the salaries of public employees. We are implementing targeted programs to provide housing for war veterans and army personnel.

We have been able to raise pensions every year. I had set an objective to provide all pensioners with an income of at least the subsistence minimum, and this goal has been achieved. Yet, the average level of pensions remains quite low, of course.

To raise pensions and modernise the healthcare system, we made a number of tough decisions, including raising mandatory medical insurance premiums. People talk a lot about this today. We need to find a way to mitigate the negative impact of this measure on businesses. In this context, I made the following decision. Small businesses working in manufacturing or providing social services will be given a two-year transition period with a lower premium level set at 26%.

This year, we focused on the priority areas of technological modernisation. Our goal is to raise our economy’s energy efficiency by 40% by 2020. This goal is realistic, and I am absolutely sure we can achieve it. This will both reduce corporate expenses and help people save their money, primarily and perhaps most importantly, when they pay utility bills. We discussed the issue recently, and the main conclusion we came to was that, in order to prevent further degradation of the utility infrastructure and at the same time enhance energy efficiency, we need to attract private investors to the housing and public utilities sector more actively. I have already given all the necessary instructions on this issue.

Also, I’d like to note that we have certain achievements in the development of high technology. For example, Russia’s nuclear industry is once again building and launching new power plants every year. Nine reactors are currently under construction in Russia. In addition, Russia is working on projects in India, Iran, China and other countries. The total volume of atomic industry’s orders for machine-building products has grown tenfold over the past three years, or by 25 times against 2005. It is a good figure. Of course, the state budget and all the people employed in the industry benefit from that.

To give you another example, today the world’s top 500 supercomputers feature 11 systems made in Russia. Next year the performance of Russia’s Lomonosov supercomputer will grow by more than 2.5 times, making it one of the most powerful computers in the world. The GLONASS satellite grouping will be complete before the end of this year, and within the next two years all key digital navigation maps will be ready, so our own satellite navigators will be available for use. The capacities of GLONASS will serve the mass consumer. By next year, most border regions will have digital access to the package that includes all must-carry public TV channels. We will build over 1000 facilities for the public digital broadcasting system. This year, we taught the Internet to speak Russian, so to say. It is important, even in terms of Russia’s reputation. The .рф domain is open and gaining popularity. I consider that to be another one of our achievements.

In addition, we have started to implement the new strategy for the development of Russia’s pharmaceutical industry. Over the next few years the share of Russian pharmaceuticals on the domestic market has to be radically increased. We want to see an increase from 20% to 50% and up to 60% for innovative products. This will make medicines more accessible. I hope growth in pharmaceutical exports will become an important item of income for Russia.

”The modernisation is not a goal in itself. It is an instrument, a tool that would allow us to solve economic and social problems that are long overdue. An instrument we can use to support those who need it most and create the conditions that would help develop the potential of those we pin our hopes on: our youth and our children.“

The Skolkovo centre remains our most renowned innovation project. I put forward this idea less than a year ago. Today the project is becoming reality. We have the land, the management team and we have laws setting up unique preferences for those who will be involved in the project. Finally, we have concrete suggestions from private and state-owned companies that are ready to start work on it at any time.

I’d like to emphasise that tax exemptions and state funding for research should be made available to anyone who has ideas and meets our eligibility criteria.

In addition, we are planning to allocate approximately 30 billion rubles for joint research projects between universities and businesses. That is a significant sum of money but if the projects are successful I believe the financing should be increased.

There is another project that we consider important. Our project to turn Moscow into a major international financial centre. The responsibility for that project lies on the federal authority, the city administration and the new mayor of Moscow. Major financial institutions from Russia and abroad are involved in the work. I am sure we have a chance to succeed in that project. The benefits of having an efficient financial market will be evident for the people, for the business, which will be able to take advantage of the whole range of modern financial services, and of course for the whole country which will benefit from an influx of investments and taxable new enterprises.

We have, achieved a lot in one year but I hope we all realise that this is only the very beginning. The resources we possess should be used to modernise our economy rather than to mend holes. We have to create new, competitive goods and services and millions of jobs. We have to create a demand for innovation, develop our small and medium-sized business and expand the professional and social prospects of our people.

I’m instructing the Government to direct at least 50 percent of the saved budget funds and part of our extra income towards modernisation projects. That includes the much-talked-about rise in the energy efficiency of our economy, the development of new technologies in the energy, IT, telecom and medicine sectors. The quality of our people’s life depends on our success in these fields.

Colleagues,

Everything I was talking about just now, all the modernisation is not a goal in itself. It is an instrument, a tool that would allow us to solve economic and social problems that are long overdue. An instrument we can use to support those who need it most and create the conditions that would help develop the potential of those we pin our hopes on: our youth and our children. Modernisation is carried out for their sake. We must not be ashamed for the country we pass on to our children and grandchildren but who we pass Russia on to is also crucial. The 26 million children and teenagers living in Russia have to fulfil their potential, grow up to be happy and healthy and become worthy citizens of Russia. This is our No. 1 priority.

Taking care of future generations is the most reliable, smart and noble sort of investment we can make. A society that effectively protects the rights of its children and respects their dignity is not only kinder and more humane. It develops faster and better. It has a good and predictable future.

I believe it is vitally important for us to introduce an efficient state policy for children. A modern policy that would correspond with our national development interests. This is why today’s address will focus on that subject as I speak about the issues that I believe need to be addressed and resolved in a new way.

First, the measures to improve the demographic situation. Compared to 2005, our birth rate has increased by over 21%. This is one of the best growth rates in the world. Infant mortality dropped by 25%. Last year, for the first time in the past 15 years our country saw an increase in population. To a large extent, this is the result of the maternity capital programme, the national Healthcare project and other family-oriented social support measures.

We started tackling the demographic problem seriously and have launched a long-term program. But we should understand that the next 15 years will see the effects of the demographic downturn we suffered in the early 1990s, with the number of women of reproductive age decreasing considerably, which poses a serious threat and challenge to the whole of our nation.

What should we do about it?

First, we must enhance both the quality and availability of medical assistance and social benefits to mothers and their children. We must further develop the maternity certificate programme, as well as rehabilitation programmes for children under 3 and low-birth-weight infants. We must also increase state support of fertility programmes, including in vitro fertilisation.

Second, we must undertake technological modernisation of children’s hospitals and clinics and to upgrade the skills of medical staff working there. Considerable funds must be allocated for these purposes through co-financing of regional programmes starting already from the next year. At least 25% of the funds earmarked for healthcare modernisation schemes will go to developing children’s healthcare. This is a lot of money; essentially, it can amount to some 100 billion rubles in the next two years.

”We started tackling the demographic problem seriously and have launched a long-term program. But we should understand that the next 15 years will see the effects of the demographic downturn we suffered in the early 1990s.“

Today, almost a third of all children have health problems by the time they reach school age. Teenage statistics are even sadder: two thirds have health deviations. Starting from 2011, we must monitor more closely their health through extended medical examinations.

Special attention should be given to vaccination, to making quality medicines available to children and teenagers, to early detection of tuberculosis, oncological and other dangerous diseases. Funds should be allocated for these purposes, as well.

The third point, which is of the utmost importance, is supporting young and large families. One of the most acute problems is that of housing. Since 2008, law allows using the maternity capital to pay out mortgages and housing loans under contracts closed before December 31, 2010, which means that this money can be used even before the child turns three. Almost 250,000 Russians have already used this opportunity, while the housing market got extra incentives for development, which is important in the post-crisis period. I believe that starting from the next year this should become regular practice.

The forth point is that according to the experts, the main way to overcome the demographic crisis is a radical increase in the number of families with three and more children. Quite recently, while searching the web I’ve come across a piece of interesting information about a social advertising campaign, which took place in the Altai Territory, if I am not mistaken. The idea is simple, but very nice. People were asked to tell which Russian celebrities and distinguished Russians were third children in their families. Among them were Nikolai Nekrasov, Anton Chekhov, Yuri Gagarin, Anna Akhmatova. Without these great people, without their creative work and achievements, the world would have been different. Humanity would have been poorer in terms of morality and culture.

Therefore, I believe that most favourable conditions must be created for large families. In some regions, for instance, in the Ivanovo region, as far as I am concerned, a family gets a free land lot to build a house or a dacha when a third child is born. It’s the right kind of decision and a good example for other regions.

I believe that this should become common practice across Russia. I instruct the Government and regional authorities to design a programme of free land allocation for house/dacha construction, when a third and every subsequent child is born. This standard may be introduced gradually, with due regard to regional specifics.

Regions may go for other measures to support large families. For example, in the Ulyanovsk region young families receive a 100,000-ruble certificate with the birth of a third child and subsequent children. I suggest that all regional heads should think of introducing regional maternity capital. This step will definitely require money. Its implementation depends on the situation in a specific region, but the result is worth it.

The fifth point. We must introduce additional tax benefits for families with three or more minors. Specifically, tax refund must be increased up to 3,000 rubles per month per child starting with the third child. I am instructing the Government to submit relevant proposals and draft a programme to increase tax refund amounts for every large family while at the same time cancelling standard tax refunds. For most of our citizens they have become symbolic.

The sixth point. Today many foundations and mass media organise fund-raising for children suffering from severe diseases. There are also businessmen, who help orphanages, and support children’s sport and leisure without making a show of it, which is probably most important. To support such initiatives, we’ve been trying to improve our legislation on charity activities for several years now. However, we still have problems here. For example, any repeated charity support for a child, even the one who is seriously ill, is subject to tax. That’s not fair.

Funds received from charity organisations to support children must be fully excluded from taxable income. I expect that the State Duma will soon adopt a relevant law. Judging by the applause, this will be the case.

”I instruct the Government and regional authorities to design a programme of free land allocation for house/dacha construction, when a third and every subsequent child is born.“

The seventh point. A highly charged and sensitive matter for young families is that of kindergartens. Wherever I go, people almost always ask me this question. At the beginning of the year, 1,684 million children were in the queue to get a place at a kindergarten. People actually have to join this queue even before their child is born. Often this is the reason why young families either postpone the birth of a child or choose to limit themselves to one child.

My instructions in this respect are as follows. Firstly, all regions must implement programmes to reconstruct old kindergartens and build new ones that comply with today’s requirements, or to allot buildings to accommodate them. These requirements must be reasonable, valid and realistic. As I said before, they should not be excessive.

Secondly, we must promote alternative forms of preschool education, including the system of private preschool facilities and family kindergartens, to consider possible reduction of rental rates and introduction of property tax privileges for new types of kindergartens, including family kindergartens.

Thirdly, preschool groups in general education schools must be created for children not attending kindergartens.

Colleagues,

For two years now we’ve been presenting the Order of Parental Honour instituted by me. Among the recipients are fathers and mothers of not only their own children, but also of adopted ones. We are justifiably proud of such families. To be frank, just talking to them when they come here to the Kremlin to receive state decorations gives me true joy.

Sadly, our country still has 130,000 children left without parental care. They have neither parents, nor guardians; they are denied of the most important thing – family warmth. We still have a long way to go to get rid of the ‘abandoned children’ notion. Guardianship authorities must be directly focused on placing those children in families and helping foster families. There should be no ‘un-adopted’ children in our country.

The so-called correctional orphanages remain a serious challenge. Unfortunately, they work more to isolate children rather than help them socialize. Therefore, the situation here should be monitored not only by state agencies and services, but by civil society as well. We must introduce a board of trustees in every orphanage or correctional institution, and these boards’ work should be transparent as possible.

Finally, we need social adaptation programmes for those leaving orphanages. It’s not enough to just teach and feed them; we have to help them start a new adult life, be ready for it, be self-confident. It’s not only teachers, but also local authorities that should play an important role here. They could, for instance, cover the expenses for pre-study courses of those leaving orphanages.

Our policy for children is based on generally accepted international standards. Declaration of the Rights of the Child adopted by the UN General Assembly states that “humanity must give the child the best it has”, while the Convention on the Rights of the Child established that children’s interests have a priority before the interests of society and the state.

In 2009, we introduced a new institution – a presidential commissioner for children’s rights. The commissioner has a lot to attend to, to put it mildly. Last summer, for example, several gross violations of safety regulations in summer camps were registered, which resulted in disease outbreaks and even death of children. We have to preclude any chance of such things happening again.

Local administrations and supervisory bodies have to prepare for the next summer season well ahead, which means they should start right now. Child ombudsmen who currently work in 58 regions of Russia have to look into the issue as well. I believe every Russian region should have its own commissioner for children’s rights.

”The health and future success of our nation depends directly on what kind of environment we leave to our children. In spite of the fact that Russia’s environment is unique and rich, we can hardly say that it is in perfect condition.“

Child abuse is a truly horrible problem. Official data provided by the Interior Ministry says that over 100,000 children and teenagers suffered abuse in 2009. Just think about the figure. Some facts really break your heart. Children, mostly orphans and unprivileged children get involved in drug abuse, prostitution and other criminal activities. The scoundrels responsible for this should be punished with utmost severity.

Last year we introduced a harsher punishment for sexual abuse of minors. Preventive measures against that kind of crimes are no less important. I believe that convicted child abusers or those who drag children into criminal activity should be banned from working in the education sector. People like that should not be allowed anywhere near children.

The respective draft law introducing the amendments to the Labour Code has been submitted to the State Duma. I hope it is approved by the end of this year.

Esteemed deputies and Federation Council members,

Protecting the life and health of a child is a direct responsibility of the child’s family and relatives. That makes domestic violence against children even more horrible. As we know, cruelty breeds cruelty. Children adopt the behaviour model they see in adults and apply it in their lives – in school, in college, in the army and then in their own families. Our society has to adopt an attitude of intolerance towards cruel treatment of children. We need to expose domestic violence and stop it. I know that several regions have social aid centres that deal with domestic violence cases. The experience we’ve accumulated in St Petersburg, the Orenburg region and the Khanty-Mansi Autonomous Area has to be used in all regions of Russia.

I have to mention another problem. Our country has practically no infrastructure for people with disabilities and serious diseases. I don’t need to explain to you how much of a problem that is for children. Even a daily trip to school often becomes a torture for a disabled child. Finding a wheelchair-accessible bus is a real problem. Residential and office buildings are usually just inaccessible to children in wheelchairs. Although, I have to say that new houses, at least the ones I saw, are being built in accordance with these new standards.

At the same time, disabled people often achieve great results in sports and art. They are truly the glory of Russia. Take, for instance, our Paralympics team. Their success is amazing, though it happens in spite of the circumstances rather than because of systemic measures taken by the state and society. Creating a favourable environment for disabled children should be a priority in our new federal programme on the Accessible Environment.

The job of raising future generations is closely linked with the modernisation of the education system. By implementing the Our New School initiative, we have redefined our standards for elementary school and prepared new standards for secondary and senior high school. Also, during Year of the Teacher, we introduced new qualification requirements for teachers and new procedures for regular professional examinations and re-training. Teachers should also have an opportunity to undergo internships at Russia’s best schools and receive additional professional training at the best universities. We are planning to allocate over 2 billion rubles for those purposes in 2011. But regional and municipal authorities should provide their share of financial support.

As Winston Churchill said, “headmasters have powers at their disposal with which Prime Ministers have never yet been invested.” Those powers should be used today to bring out the potential of every child and prepare children to choose their future professions as well as we can. In order to achieve that, we have to pay attention to the following.

First, in 2011 each school should create its own “school of the future” project. It will be a vision of how the school should develop. Of course, these projects should be devised primarily by teachers, current and former students of the school and parents. But I think that regional administrations could work on the implementation procedures for those projects, engaging the business, if necessary.

Second, we need to complete the creation of a nationwide system that would help locate and support talented children. All children should be able to develop their potential regardless of where they live, the incomes of their families or their social status. I am instructing the Government to take this recommendation into account when new educational standards are introduced and to establish a standard per capita subsidy for educational programmes for gifted children.

Third, children today are different from what we were at their age. Every generation is different from the previous one. They feel at home in the world of telecommunications and are used to new ways of information gathering. They like using new gadgets. As it has been said, and rightly so, no one in the world is as sensitive to novelty as children. Using modern software and technological advances in education has to become the norm. It has to be envisaged in the new standards.

The teachers have to learn all about that as well. We can’t tolerate the situation where students know more about modern technology than teachers. Teachers have to know about these things.

Fourth, the upbringing of our children is a responsibility not only of the education system but of our culture and society as a whole. We need new, quality films that will be of interest to our children. Let us remember the influence that good science fiction has had on entire generations. We all read those books. They fascinated children, encouraging them to make their own discoveries. A whole generation was raised on those books.

Fifth, we need to pay more attention to the patriotic upbringing of our youth. True, we need to make serious changes in this area but some traditional methods such as military games can still be used today. They build character, promote teamwork and teach children to overcome difficulties.

I would like to specifically note the work of groups that find and identify soldiers’ remains. In 2010, the year when we marked 65^th anniversary of the Victory, they helped a lot of people find out where their loved ones were buried. This way our young ones are learning true patriotism.

I instructed the Government to step up efforts to recover the remains of missing soldiers and repair war memorials. The situation is not altogether positive. But I believe authorities at all levels should be doing that constantly rather than just in preparation for special events and anniversary years like 2010.

Sixth, promoting the healthy way of life is a strategic priority of our policy for children. Of course, this applies not only to children. We, adults, have to set an example. Our whole society has to get over its childish mindset when it comes to healthy living. As Leo Tolstoy said, you can’t develop children properly unless you develop yourself first. Yet 80% of Russians, or four-fifths of our entire population, don’t exercise or do sports.

Russia has one of the highest percentages of smokers in the world. At the same time the age at which young people start drinking and smoking keeps decreasing. Those who sell alcohol to underage children must remember that this mean sanctions, including criminal prosecution.

I hope your applause means the bill currently under consideration in the State Duma on penalties for such sales will be approved shortly. (Applause)

The health and future success of our nation depends directly on what kind of environment we leave to our children. In spite of the fact that Russia’s environment is unique and rich, we can hardly say that it is in perfect condition. We can only solve that problem by introducing a modern and efficient environment protection system.

We urgently need to take the following steps.

First, we have to evaluate the real condition of all polluted territories and use this as a starting point for our programs to minimise environmental damage and clean up accumulated pollution.

Also, some experts believe we need a so-called environmental amnesty, as long as the companies subject to the amnesty take it upon themselves to make their production facilities environment-friendly and clean up the territories where their plants are located. I think the idea is reasonable. The companies which are implementing such programmes – not just preparing them but really implementing them and spending money on them – should not have to pay excessive fines, as it would only make it harder for them to remedy the situation. On the contrary, we need to support such programmes and use private-public partnerships as much as possible. I am instructing the Government to prepare their suggestions on this issue.

Second, the Government should devise environmental standards that would take into account special conditions in some territories. Those would serve as a reference point for the authorities in their decision-making and setting requirements for production facilities. In fact, those standards will also serve as a clear benchmark for our people and our foreign partners.

Third, our civil society needs to play an important role in environment protection. I often hear that “green” ideas are not popular in Russia because our people are not ready for them. To some extent, this may be true. That is why, as I have mentioned, the role of environmental education is crucial. We have to take that into account in our new educational standards.

Fourth, the quality of the environment should be the most important indicator of the quality of life and one of the main indicators of the territory’s socio-economic development. Consequently, it should be a criterion to measure the efficiency of local authorities. I’m instructing the heads of all regions to present annual reports on the environmental situation in their regions. The people of those regions should have complete and true information about that.

”Government officials should not discredit the state with their activities. Their main mission is to improve the conditions that people live in.“

As for non-governmental environmental organisations, if those people genuinely care for the environment, we need to have detailed discussions with them and find mutually acceptable solutions before we start building industrial or infrastructure facilities.

In conclusion I would like to say that childhood and youth is a time when people define their future, a time when people try new things. They discover. They experiment. They have no fear. The spirit of innovation, the desire to produce something new, bold thinking – those are the things our country needs today. We are counting on the energy and ambitions of our young people and their desire to work together and together achieve the goals they set.

Deputies of the State Duma and members of the Federation Council,

Modernisation produces a smart economy but it also requires smart policies that create the conditions for an extensive renewal of society. We need new standards in governance and public services, a higher quality of courts and law enforcement, modern ways for people to participate in the development of their city or village, and more involvement on the part of the people in the work of municipal authorities.

In order to achieve that, I propose we take the following steps.

First, we need to make day-to-day interaction between the state and its citizens transparent, clear and simple. The understanding that government officials serve the people rather than control their lives is the foundation of democracy. For citizens, the state is the official to whose office they come with their problems, the judge who makes a ruling in their case, a local police officer or a tax inspector – any person who has the authority to solve their problems, like all of you sitting in this room. Government officials should not discredit the state with their activities. Their main mission is to improve the conditions that people live in.

We are optimising our system of state and municipal services. Even today, people in many regions can file an electronic application for a passport or check their retirement account from home. Also, they can register a vehicle or get a driver’s license in any traffic authority office, not just the one closest to their registered residence, as long as it’s within their region.

Thus, some of the new rules are already working, even though I know from the letters I receive that some people are not satisfied with the way the system works. We need to keep improving it. The rest of the rules will become effective next year or the one after that.

The most important rule is to stick to the “one-stop” principle. People should not have to run from one government office to another collecting all sorts of documents, the way parents have to do when they want to get support for their children that they are entitled to by law.

Government officials should be legally liable if they violate maximum periods for providing public services or if they violate procedures established by relevant administrative regulations. I give the Government one month to prepare their proposals on these issues.

Second, while modernising the system of public services, we need to pay special attention to the social services we provide to people. I think we should involve non-commercial organisations more in providing those services. They often know the actual situation even better than the authorities, they have unique experience, and they help people who find themselves in a difficult situation. I think by involving non-commercial organisations we will make social services more substantive and targeted. Also, this will reduce corruption among government officials, which is crucial.

Federal agencies should develop a clear and transparent system of selecting NCOs for such jobs. We need to choose organisations with a well-established reputation which people really trust, which have been working in this area for a number of years or have been converted from another organisation with years of relevant experience.

I want the Government to prepare necessary amendments to laws and regulations to allow non-commercial organisations to participate in providing public social services. At the same time, in providing funds for such organisations, we should use competitive mechanisms more often.

Third, each region should have a clear programme to improve the investment climate and create new productive jobs based on the so-called best regional practices. These include reducing the time required to get all the permits necessary to start a new business, creating prepared industrial sites, and taking a number of other measures. On a more general note, we need to reward the regions which manage to increase their revenues rather than strip them of support, and to take this into account when distributing federal subsidies. However, that’s not enough.

The government needs to prepare its proposals on how we can change the current revenue distribution between the budgets of different levels. As a result, regions and municipalities will play a bigger role in resolving key socio-economic problems.

The main responsibility for the situation in a region lies with the governor. His work will be evaluated based on how many investors he manages to attract, how many jobs he creates, especially in industries not related to raw materials. This should be used as a basis for personnel decisions.

”The main responsibility for the situation in a region lies with the governor. His work will be evaluated based on how many investors he manages to attract, how many jobs he creates, especially in industries not related to raw materials. This should be used as a basis for personnel decisions.“

Fourth, the authorities must get rid of the property, which is not related directly to their duties. It seems that property can never be excessive. But in reality, managing excessive property takes up a great deal of time, effort and money, as you all know, but the worst part of it all is that this may lead to corruption.

This year, I signed an executive order reducing the number of strategic companies to a fifth of what it used to be. Following my instructions, the Government adopted a plan to privatise a large number of big companies. The main goal of privatisation is boosting the efficiency of those companies and attracting more investment – serious investment – into the Russian economy. The revenue from this privatisation will be used primarily to modernise our economy. Similar decisions need to be taken at regional and local levels. The law defining the general principles according to which regional authorities operate says that regional authorities may only possess the property they need to perform their duties. Accordingly, all other property must be privatised. Quoting a popular line, the authorities should not be owners of “plants, newspapers and ships.” Everybody has their own direct responsibilities to deal with.

Fifth, modernisation will bring the expected results only when there are fair laws in place, when there are independent and respected courts and law enforcement bodies which people really trust.

All these components are definitely closely connected, and it’s the whole system that needs reform rather than individual institutions. That is why in addition to developing legislation on the judicial system, which we have been doing for some time, we have now started reforming the Ministry of the Interior. Also, we are adopting amendments that will help boost the efficiency of investigation and prosecution services. That’s why I have sent two bills, one on the police force and another one on the Investigative Committee, to the State Duma. Today, not only federal but also regional and municipal authorities must prepare to implement those new acts effectively. They contain a lot of new things. Government officials should not be hiding in their offices while crime gangs grow and take over their territory. They must make sure that people don’t need to be afraid for their lives or the lives of their loved ones, that they don’t need to worry about attacks on their person, their property or their dignity.

Sadly, recently we’ve seen a number of tragic events that took the lives of Russian people. To some extent, this happened because of negligence on the part of police and other government agencies. In some case, they even had direct ties with criminal groups. Following one such case, I made a decision to dismiss the police chief of the Krasnodar Territory and asked the Prosecutor General’s Office, the Federal Security Service and the Investigative Committee to submit their proposals regarding punishment for their officers who were responsible for maintaining law and order in that area.

Sixth, in my address last year I spoke about the need to amend the Criminal Code. I said that the law should be tough and at the same time modern and reasonably humane. While bringing about justice and protecting the rights of the aggrieved party, we should not produce new members for the criminal world. Let me stress it again: punishment for minor offences should not involve imprisonment if possible. This is, by the way, particularly important when dealing with minors having violated the law for the first time.

Today I am going to introduce a law to the State Duma allowing the court to use a case-by-case approach when choosing punishment. In a number of criminal offence categories, bottom-line sanctions will be eliminated. The court will now be able to use such alternative punitive measures as fines and forced or compulsory labour. But most importantly, in the absence of the bottom-line sanctions the courts should not be guided by the gravest possible punishment. The power of the court consists in the unavoidability and fairness in punishment rather than harshness, while the mission of justice is not just to punish but also to correct.

Seventh, fighting corruption remains our fundamental task. I believe that we must thoroughly analyse how our decisions are being implemented and move ahead. In our experience, even the threat of being imprisoned for up to 12 years does not stop bribe-takers. It seems that in a number of cases economic sanctions in the form of fines may turn out to be more effective. Thus, giving or taking a bribe may be punished with fines to an amount 100 times the size of the bribe itself.

Currently we are facing a new type of criminal activity – that of bribery mediation. Everybody knows way too well that there are lots of crooks hanging around courts and other government bodies who assure that they know how to resolve any issue and to whom and how much money one should give. I think that bribery mediation, as well as the size of the fine I’ve been talking about, should be introduced to the Criminal Code.

Eighth, there’s another issue I would like to raise. I am not going to demonise the notorious Law No. 94 [On Placing Orders for Goods, Works and Services for State and Municipal Needs]. Everyone is criticising it, as the situation has indeed gone beyond reasonable. The goals it stipulates have mostly remained mere declarations. According to the most conservative estimates, inappropriate expenses including direct theft and kickbacks amount to at least one trillion rubles. Therefore, it’s time to start working on a new version of the state procurement law, a modern and more balanced version.

I also believe that all planned open-bid purchases must be announced in advance. Information about such plans must be posted on a special website with a possibility to give feedback, as companies may want to bid, or experts may want to express their opinions regarding the compliance of those plans with today’s requirements and market prices.

We need to define preliminary purchase plans for modern equipment, medicines and other hi-tech products by the state and major state-owned companies for the three years immediately ahead. In the future, we need to have similar plans for an even longer period of 5–7 years. In this case both investors and researchers will be confident that the results of their work will be in demand.

Army modernisation can be another factor in boosting demand for new technology. Like it or not, but in different periods of history it was only security issues and state investment in new technological defence solutions that were driving science and technology forward.

”Our state and nation cannot develop without efficient national security and defence. We are moving in the direction of major modernisation of our armed forces, in the direction of systemic and deep reforms.“

Today we are facing a fundamental task of creating a new hi-tech mobile army. We are ready to spend more than 20 trillion rubles on it. This is a lot of money. But this kind of investment will be twice as effective, if as a result, it will provide us with the so-called dual-purpose technology helping us with industrial modernisation and contributing to fundamental and applied research, as well as to academic research. That's why we are creating a special agency, which will search for and develop breakthrough technologies for the defence industry. As you know, similar agencies exist in other countries. We expect that many of those technologies will be applied later in everyday life.

Ninth, the quality of the political system is a crucial indicator of the quality of life. In order to improve this system, a number of decisions have been made at the federal and regional levels. Speaking from this platform in 2008, I outlined ten points for improving our political system and democracy, and then I mentioned another ten points in 2009. I would like to thank again everybody who took part in discussing these initiatives, all State Duma deputies and members of the Federation Council.

However we need to take additional steps at the local self-government level. Local self-government is a major element of any democratic state. Unfortunately most of our political parties don't really play a significant role in municipalities. As a result, not all parties act as national political organisations at this level. I suggest we should use proportional or mixed electoral system in elections to the legislatures in urban districts and municipal areas with 20 or more deputies.

Political competition at the bottom level will help build trust in the party system and make parties more accountable to voters. They need to be closer to the everyday life of our people. It is another step towards strengthening our democracy, which sees the well-being of our people as its main goal.

So, the State Duma election next December will take place with a political system that has been renewed at all levels.

Tenth, all of us present here had an open and detailed discussion of the new law on the police force. In my opinion, this discussion has brought about some pretty good results. We will have a similar discussion of the new law on education. I think that we need to develop this practice. There should be a certain procedure for organising public discussion, like we did with the law on the police force. I commission my Executive Office to prepare – by the end of this year – their proposals on how to hold these public discussions.

Colleagues,

Our state and nation cannot develop without efficient national security and defence. We are moving in the direction of major modernisation of our armed forces, in the direction of systemic and deep reforms. We have modernised the structure of our Armed Forces improving their combat readiness and upgrading their administrative and logistics systems. We’ve started conducting regular large-scale military exercises again. Four military districts replaced the old six. Under the state armament program, the troops will be equipped with modern weapons and hardware by the year 2020.

What tasks are still ahead? First, next year we need to put a special emphasis on aerospace defence, combining the existing missile and air defence systems, missile early-warning and airspace monitoring systems. They must come under a unified strategic command.

Second, modern Russia needs a modern army and navy, compact and mobile troops equipped with modern weapons and led by professionals with the highest qualifications. For this we need serious funds (I just gave you the figure) and new decisions, which are sometimes not easy to make. At the same time, we need to fulfil all our obligations towards people who chose to serve in the army. First of all, we need to provide them with housing, and do that according to the existing timeline.

Third, the army should not have non-military duties and functions. These functions should be transferred to civilian organisations. The army should focus on combat training, first of all. A young man is only drafted to serve for one year, but the combat training program does not get any simpler. Every young man should be able to cover all the aspects of this programme.

Fourth, not only are we developing our Armed Forces, we are also developing international cooperation in the security sphere. Russia is ready to work on strengthening the missile non-proliferation regime with countries that are interested in it. I shared my ideas of the possible architecture of the European missile defence system at the recent Russia-NATO summit in Lisbon. This architecture would merge the potentials of Russia and NATO, protecting all European countries from missile strikes. We have started a joint evaluation of all issues related to that. This is certainly a positive development. But here, in this room, I would like to speak frankly. One of the following two things will happen within the next ten years: either we reach an agreement on missile defence and create a full-fledged cooperation mechanism, or (if we can’t come to a constructive agreement) we will see another escalation of the arms race. We will have to make a decision to deploy new attack forces. It is obvious that that would be a very unfavourable scenario.

”We are renewing our country and our society. We are changing our lives and we are changing ourselves. All we are doing we are doing for the sake of those we love the most – our children.“

The Lisbon summit has made decisions related to the forming of a modern partnership, one based on the indivisibility of security, mutual trust, transparency and predictability. We have decided on how we will work on the creation of a common space of peace and security in the Euro-Atlantic region. This makes us moderately optimistic when we evaluate the prospects of our work on Russia’s initiative on a new European security treaty.

Fifth, we have to develop our economic diplomacy, evaluating its results based on practical benefits it produces for modernisation, first and foremost. Our foreign policy today should not be limited to missiles. We have to make specific achievements that our people can appreciate: creating joint ventures in Russia, supplying high-quality, inexpensive goods to the Russian market, creating modern jobs and simplifying visa procedures.

Our foreign partners, I should note, understand our pragmatic approach. They are ready to share their experience in innovative development. I believe we should work directly with the countries and companies that are ready to cooperate with us. Thanks to this mutual interest we are currently developing what I would call partnerships for modernization with, for instance, Germany and France. I see a great potential for expanding the innovation aspect in our cooperation with China, India, Brazil, South Korea, Singapore, Japan, Canada, Italy, Finland, Ukraine, Kazakhstan and several other countries. These partnerships will help develop primarily the five priorities Russia has set out in its technological modernisation programme.

I see great potential that can be used to achieve these goals as our relations with the European Union and the US expand. The mechanisms of Russian-US partnership should be used to establish a full-scale economic cooperation, improve the investment climate and our high-tech cooperation.

The Partnership for Modernisation agreement signed by Russia and the EU, as we formulated the idea one year ago, should work in the following three areas. Firstly, the mutual exchange of technologies, the harmonisation of technical regulations and standards, and practical assistance by the EU for Russia to join the WTO.

Secondly, a simplified visa regime with the prospect of introducing visa-free travel in the near future.

Thirdly, we need to seriously expand our academic and professional exchange programmes. I will speak about this at the Russia-EU summit in Brussels next week.

Sixth, Russia’s integration into the Asian-Pacific economic space is of utmost importance. We have to better exploit the potential of Russia’s participation in APEC and other forums. Some of these forums just recently held sessions. Building up our ties with other countries in the region is our strategic objective. You can see that clearly in our relations with China. Our unprecedentedly high level of bilateral cooperation is projected onto the international arena and consequently reflects positively on the standing of alliances such as BRIC and the SCO. We have serious potential in the sphere of long-term mutually beneficial cooperation with Latin American and African nations.

Seventh, the CIS and its alliances, EurAsEC and the CSTO, remain a priority for our foreign policy. We have already established a Customs Union and are now building a common economic space within EurAsEC, testing new integration models and efficient economic cooperation concepts. Eventually, we need to work towards creating a common economic space that would stretch from the Arctic to the Pacific, all across Eurasia.

Eighth, Russia with its unique experience and human and technology resources, can initiate a global, or trans-European, emergency management system. Approximately six months ago, at the G20 summit, I proposed to join our efforts to preserve the marine environment from oil spills. We now have to approach our main goal – exchange our best practices in that area and prevent, or clear, oil spills together.

And the last of the foreign policy issues. We have to step up international cooperation in fighting piracy. We have put forward an initiative to create an international mechanism for piracy trials. We believe that would help resolve the issue of prosecuting pirates as impunity remains one of the key factors that drive piracy.

I expect specific results in all of these areas from our Foreign Ministry.

Dear friends,

We will work together to implement the plans that I set out today. I don’t have the slightest doubt that we will be successful. I believe in your support. Let me add a few words of the kind you rarely see in official documents. These words may, however, be the most important. We are renewing our country and our society. We are changing our lives and we are changing ourselves. All we are doing we are doing for the sake of those we love the most – our children, because we want them to have a better life than we have. We want them to be better than we are. We want them to be able to do things that we perhaps won’t have time to do. We want their achievements to create a successful future for our great country.

I am sure that is the way it will be!

Presidential Address to the Federal Assembly of the Russian Federation

2015-03-20T18:02:22+04:00

President of Russia Dmitry Medvedev: Citizens of Russia,

Deputies and members of the Federation Council,

Two months ago, in my article Go, Russia! I announced the principles for a new political strategy. In today’s Address to the Federal Assembly I want to outline the first specific steps for implementing this strategy. I will tell you about the immediate tasks ahead.

The foundation of my vision for the future is the firm conviction that Russia can and must become a global power on a completely new basis. Our country’s prestige and national prosperity cannot rest forever on past achievements. After all, the oil and gas production facilities that generate most of our budget revenue, the nuclear weapons that guarantee our security, and our industrial and utilities infrastructure – most of this was built by Soviet specialists. In other words, it was not we who built it. It is still keeping our country afloat today, but it is rapidly depreciating both morally and physically. The time has come for today’s generation of Russians to make their mark and take our country to a new, higher level of civilisation.

Last century, at tremendous cost and effort, an essentially illiterate country was transformed into what was at that time one of the world’s most influential industrial powers, a leader in creating advanced technology in the space, rocket and nuclear fields. But the closed society and totalitarian political regime made it impossible to hold onto this lead. The Soviet Union, sadly, remained an industrial and raw materials giant and proved unable to compete against post-industrial societies.

In the twenty-first century, our country once again needs to undergo comprehensive modernisation. This will be our first ever experience of modernisation based on democratic values and institutions. Instead of a primitive raw materials economy we will create a smart economy producing unique knowledge, new goods and technology of use to people.

Instead of an archaic society in which the leaders think and decide for everyone we will become a society of clever, free and responsible people.

Instead of chaotic action dictated by nostalgia and prejudice, we will carry out an intelligent domestic and foreign policy based on purely pragmatic aims.

Instead of the Russia of the past we will build the Russia of the present – a modern and forward-looking young nation able to take a worthy place in the global economy.

I published my proposal to reflect on how we can overcome our chronic backwardness, dependence on raw materials exports, and corruption, how we can prepare ourselves for the fierce competition on global markets, and create the best possibilities for ensuring that each of us can make full use in practice of our knowledge, opportunities, and experience without depending on higher-ups. In other words, I proposed that we reflect on the steps we need to take right now to improve the quality of life in Russia and make our country one of the world’s leaders.

I received numerous responses and letters of all sorts during the public discussion that followed, and spoke with people of all different political views and professions on ways to develop our economy, education and science, and make our system of government, and our political and judicial systems more effective.

I thank everyone who took part in these open debates on the new political strategy: those who share my views, and those who propose different solutions. We all have at least one thing in common: we know that change is essential and that what kind of country we will hand down to our children and grandchildren, and what place it will hold in tomorrow’s world depend on us alone.

Many of your ideas were taken into account during the work on the Presidential Address, the work on its proposals, which offer the blueprint for Russia’s consistent and systemic modernisation.

Colleagues,

The need for change has become especially clear over these past months. The global financial crisis has affected everyone, but Russia has experienced an even severer economic downturn than most countries. We should not lay the blame on the outside world alone, however.

We need to recognise that we have not done enough over these last years to resolve the problems we inherited from the past. We have not freed ourselves from a primitive economic structure and humiliating dependence on raw materials. We have not refocused our industry on consumers’ real needs. The habit of living off export earnings is still holding back innovative development. Russian business still prefers to sell goods produced abroad, and our own goods’ competitiveness is disgracefully low.

The crisis has certainly made it harder to resolve these problems. It has forced us to concentrate our efforts on dealing with its negative impact by drawing on the substantial reserves that we had built up with such hard work. The large-scale package of anti-crisis measures made it possible to stabilise the situation by the middle of this year.

Our priority was and is to support people in difficult circumstances. Budget revenue has fallen but the authorities will continue to carry out social commitments in full. This will be the case in the future too.

This concerns pensions above all. Pensions were indexed on a greater scale than had been planned. Over the next three years, the average pension will increase at least 1.5-fold, and in 2010, all pensioners will receive an income not lower than the subsistence minimum. You know how important this is for our elderly people.

One of the key tasks that we simply must resolve is that of providing war veterans with housing. The federal budget allocates around 46 billion rubles this year for this purpose, and this will make it possible to provide more than 34,000 veterans with better housing conditions. I have issued an additional instruction to earmark funds for providing all veterans with apartments, regardless of when they made their requests for better housing conditions. This is our duty.

The maximum unemployment benefit has been increased more than 1.5-fold, and we are carrying out large-scale job support programmes. Around 2 million people have already taken part in these programmes. This helps us to prevent a sharp rise in the number of unemployed. We will continue to promote job support and job creation programmes, especially for the more than 1 million people around the country who are at risk of being laid off. We need to pay more attention to modern professional training, organisation of public works, creating both temporary and permanent jobs, and providing targeted support for people, including for relocation or opening their own businesses.

One particularly important area for our efforts is normalising the situation in single-industry towns. There are several hundred such towns and cities in Russia. They are home to more than 16 million people and produce a large volume of goods and services. Over the coming months we need to take urgent measures to prevent a serious fall in living standards in these towns. This is a task for the authorities at all levels, and for the company managers in these towns. Over the next 6 months the Government will approve a programme for supporting these towns’ development, and will adopt comprehensive programmes for the towns and settlements in most difficult circumstances. In these locations we need to put in place conditions that will enable people to make use of their skills in all different areas and create incentives for private investment. If for whatever reason the economic prospects are very slim or are absent altogether we need to help people move to places where they will have better prospects for life and employment, all the more so as we have plenty of regions in need of additional labour. I think that many people will be able to find new jobs on their own, but at the same time, I expect the local and regional authorities and the employers to take a responsible and attentive attitude towards specific people’s needs. The federal authorities also have to organise the necessary support.

We have been providing direct support during the crisis, direct subsidies to Russian companies, and this money comes to more than 1 trillion rubles now. In the future, we will provide such support only to businesses that have clear plans for raising effectiveness and carrying out high-technology projects. Ineffective companies either have to go through a financial cleanup procedure or leave the market. Protecting them by setting up high trade barriers cannot continue forever. Production can develop only when we have real competition. Russian consumers need to have access to inexpensive quality goods. The task for Russian companies is to learn how to produce them.

I note in particular the successful implementation of the state programme for agriculture sector development. As a result, agriculture is showing higher growth than any other sector, even during the crisis period. We will continue our rural support policy. We have all the right conditions for making agriculture one of our economic growth leaders for the years to come, and this in turn will improve the quality of life in the countryside.

Of course, the best anti-crisis policy is to encourage private demand. Some steps have been taken in this direction, but this is still not enough. I instruct the Government to draft additional measures for supporting consumer loans and expanding housing construction.

There have been many proposals for increasing investment in infrastructure. This is understandable. Infrastructure in our country suffers from a lack of financing. But so long as basic order has not been brought to this sector and construction is carried out using vastly exaggerated cost estimates I think that spending more money on these projects would be a luxury we cannot afford. I instruct the Government starting next year to introduce new procedures for tenders in this sector, including using electronic technology, and to bring the technology and costs of building roads and other infrastructure sites into line with world standards. We should examine the possibility of using the relevant European Union norms in order to draft more rapidly our own construction regulations, because this is something that has been dragging on for too long here.

We have paid a lot of attention to supporting the financial system over these last months. The banking system is in a satisfactory condition today, taking the crisis year into account of course. Lending is starting to grow again and the amount of overdue debt has stabilised. Now that inflation has come down and the currency market has stabilised interest rates are also gradually starting to fall. The Central Bank is now playing in full its part as lender of last resort. But from the innovative development point of view the financial sector is still weak. It has insufficient capitalization and is not able to provide a full range of needed services to our people and companies. The Government should present a programme of specific measures for improving the financial system and making it able to meet the demands of our economy’s modernisation.

I think that overall, the Government, the Central Bank, and the regional authorities, with the support of legislators at all levels, have succeeded in stabilising the situation in the economy and social sphere.

But I hope that everyone here realises that this revival on the markets is still very weak and unstable. The most dangerous thing now would be to start telling ourselves that all is well. We need to continue carrying out our anti-crisis programme and be ready to act fast to take additional measures.

Deputies and members of the Federation Council,

We have a duty to heed the lessons of recent events. So long as oil prices were growing many, almost all of us, to be honest, fell for the illusion that structural reforms could wait and that what was important now was to make maximum use of the high prices. The priority was on pushing ahead the old raw materials economy, while developing unique technology and innovative products was the subject of only random individual decisions.

But we can delay no longer. We must begin the modernisation and technological upgrading of our entire industrial sector. I see this as a question of our country’s survival in the modern world.

I hope the time is not far off when Russia’s prosperity will depend on our successes in developing a market for ideas, inventions and discoveries, and on the ability of our state and society to find and encourage talented individuals capable of critical thinking, and rear young people in a spirit of intellectual freedom and civic activeness.

What are the main factors in this development, as I see them? The Russian economy must make people’s real needs its focus, and people’s needs today are primarily about ensuring their safety, improving their health, and guaranteeing access to energy and information. This determines our priorities for economic modernisation and technological development. These are the key tasks for placing Russia on a new technological level and making it a global leader. These priorities include introducing the latest medical, energy and information technology, developing space and telecommunications systems, and radically increasing energy efficiency.

A special presidential commission has approved specific projects in all of these five areas and has drawn up detailed timetables for their implementation. Work is already underway on their practical implementation. I hope for the active participation of all the state organisations, the business, scientific and expert communities.

I will go into a little more detail on each of these main modernisation areas because I think them vitally essential for our country.

The modernisation area of top importance for our people is developing medical technology, medical equipment, and the pharmaceuticals industry. We will provide people with quality and affordable medicines and also the latest technology for preventing and treating diseases, especially the diseases that are the biggest causes of sickness and death in our country. There is no need to say just how significant this is given the demographic situation Russia faces.

We have already drawn up a list of strategically important medicines that should be produced here in Russia. This includes the most expensive medicines, in particular medicines for treating cardiovascular diseases and cancer. We will need to produce more than 50 such medicines so that everyone who needs them will be able to receive timely treatment. Also we will soon dramatically increase production of our own medicines for treating the most common diseases such as colds and flu.

I think that Russian companies have the ability to produce medicines and technology that would find demand on the global market. For this we need to work more actively on developing partnerships with leading foreign developers and producers, who can contribute to organising advanced medical research in Russia itself.

We will also use the public procurement mechanism to encourage domestic production of medicines and technology. Within five years, Russian-made medicines should account for at least a quarter of the medicines market here and for more than half of the market by 2020. This is our goal.

I have also given the instruction to prepare and submit to the State Duma a draft law setting out regulations for medicines’ supply and sale and, extremely important, their safety demands. We have a duty to protect people from fake and counterfeit products on this market.

Along with the introduction of new prevention and treatment procedures we also need to pay particular attention to motivating and giving people the conditions to pursue a healthy lifestyle. I received a lot of feedback to my article and these words were on precisely this issue: “The measure of personal success should be a person’s health rather than the amount of money earned. Getting young people into the habit of playing sport would help resolve serious problems such as drug addiction, alcoholism and lack of adult supervision.” It is hard to argue with these words.

I note that in August this year, Russia registered its natural population increase for the first time in the last 15 years. This growth is still only small – just 1,000 people – but still, it is an increase nonetheless. This result was achieved above all thanks to the National Project on Health and the new demographic policy we have been implementing. We will continue our efforts in these areas. We have every chance of ensuring that our population grows rather than declines.

Of course, we also need to think about the natural resources that we can preserve and pass on to future generations. This is why I think that increasing energy efficiency and making the transition to a rational resource consumption model is another of our economy’s modernisation priorities. We can resolve this task only if each of us reflects on our personal responsibility for energy saving, as people are now doing throughout the globe. This is something everyone is thinking about elsewhere in the world.

What needs to be done? First, we will launch programmes to produce and install individual meters. People in our cities and towns today are essentially paying for worn-out and therefore costly utilities infrastructure. People should pay only for what they actually consume.

Second, we are beginning a transition to energy-saving light bulbs. People will save a considerable amount of money by replacing old equipment.

Third, starting next year, we will begin carrying out projects to make city districts more energy efficient. Utilities networks will be modernised and a system of payments for services will be introduced that takes more into consideration families’ consumption and income levels. We will introduce energy service contracts that will make substantial savings possible. The energy efficiency programmes will be implemented first of all in the public sector, where there is plenty of work to do. I call on all of the country’s regions to take part in these projects.

Fourth, we need to increase production not only of minerals, but also become a leader in developing innovation both in traditional and alternative energy.

One of the most glaring examples of ineffective energy resource use is the flaring of gas extracted alongside oil. This pollutes the environment and sends tens of billions of rubles up in smoke. The Government has discussed the issue on many occasions and has promised to put an end to this disgrace. We really do need to take fast and decisive action, and no objections from the production companies should be accepted. This has become a popular issue. During the meeting I held with the Federation Council, Nikolai Ryzhkov asked me to look into the problem of wasting the gas extracted alongside oil. I don’t know if he is present now or not. He is here. I hope that we can work together then to oversee that this task is fulfilled.

One of the most promising areas is to make use of the widespread bio-resources we have, above all timber, peat, and industrial waste, as energy sources.

Our scientific research and production organisations will focus on developing innovative technology such as developments based on superconductor technology that is particularly relevant for our extensive territory. We continue to lose huge amounts of energy during its transmission around our country. Superconductor technology will radically change electricity production, transmission and use.

Programmes for developing nuclear energy have been made a separate area within the modernisation project. By 2014, we will have new-generation reactors and nuclear fuel, for which there will be demand not just in Russia but on foreign markets as well. Developments in the nuclear field will be actively applied in other areas too (above all in medicine, of course), for production of hydrogen fuel, and also for creating propellant devices capable of ensuring space flights even to other planets.

We will play an active part in the international project for developing thermonuclear fusion as the future lies with these technologies. As one of the ‘elite club’ of countries developing nuclear technology we will work together with our foreign partners to open access to what is a practically unlimited energy source.

The fourth strategic direction is developing space technology and telecommunications. Our country was traditionally one of the leaders in these sectors but today is only in 63rd place in the world for its level of communications infrastructure development. This is very bad. Obviously, without change in this area we will not be able to progress, and this is why we need to give people throughout the entire country broadband Internet access over the next five years, and carry out the transition to digital television and fourth-generation mobile phone communications.

The national infrastructure network should guarantee access to modern telecommunications in any corner of the country and at reasonable prices. Prices for these services should be lower for people in Siberia and the Far East. Priority should go to the services that most of our country’s people really need, above all communication with the unified emergency service and help in emergency situations. This is vitally important.

High-speed optic cables will be laid across the country, highly productive equipment will be installed, and the considerable number of existing lines will see their potential put to full use. This will make it possible to guarantee the exchange of ever increasing information flows between the country’s regions and between different countries. Russia, which extends across 11 time zones, is set to become a key link in the global information infrastructure.

Incidentally, on the subject of time zones, it has been the custom here to take pride in their number, which seemed to us a vivid symbol of our country’s greatness. This is indeed the case, but have we ever stopped to think seriously about whether dividing our country this way makes it harder to manage it effectively and leads to the use of excessively costly technology? Other countries’ examples (the USA and China) show that fewer time zones can work perfectly well. These are both large countries. We should examine the possibility of reducing the number of time zones. Of course, we would need to look into all the possible consequences of such a decision. This also concerns the expediency of daylight saving. Here too we need to compare the savings made and the inconveniences the practice causes. Whatever the case, we need to make this analysis. I hope that the specialists will give us objective responses, and I stress the word objective, to these questions.

Another of our priorities will be the use of space technology, including the GLONASS system, of course. This technology will give our people the possibility of using modern navigation systems in their cars, help to guarantee transport safety and security at technically complex facilities, improve coordination between accident prevention, emergency situations and natural and man-induced disasters relief. It will also give rise to new technology for providing highly accurate digital cartographic information.

The introduction of modern engineering solutions and development of new-generation spacecraft will enable us by 2015 to reach world standards in the capacity and service life of the telecommunications satellites we put into orbit. Not all is so good in this area at the moment. These new satellites’ technological capacities should enable us to see the whole world and help people in all countries carry out scientific research and work and communicate more effectively with each other.

Finally, our fifth priority is to develop strategic and information technology. Russia needs to make full use of the potential of supercomputers and supercomputer systems linked by high-speed data exchange channels. With their help within five years we could start designing new planes and spacecraft, cars and nuclear reactors. Sophisticated technology that has not gone through supercomputer simulation and not been digitalised, so to speak, will find itself without demand on the market within a few years. If we want to be competitive in this area we have to start working hard.

Furthermore, starting next year, various state services will be accessible via electronic communications channels too. This concerns, in particular, qualification exams and issuing driver’s licences, registering real estate on the cadastre register, and receiving bibliographical information from state libraries and archives. In two years time, more than 60 key state services will be available in electronic form. This is our objective.

A pilot project will begin on introducing social cards for people. Such cards will ensure easy access to state services and facilitate participation in medical and social insurance programmes. In the future, these cards could be combined with electronic cards giving access to banking products, including making obligatory and voluntary payments. Implementation of electronic technology will be convenient for people and will also be a powerful tool in preventing corruption.

One of the responses I received to my article [Go, Russia!] which came from the town of Serpukhov noted that the introduction of this sort of technology, in particular the electronic government, will do a lot to reduce the corruption problem, free people from queuing, and save them time and money. This is clearly the case.

The five strategic directions for technological modernisation that I have named are certainly all priorities, but the list of state tasks does not end here. The government must take active steps to implement development programmes in other economic sectors too, focusing particularly on increasing added value of goods produced in the country. This is a key task.

I will name several systemic steps we need to take as part of implementation of this general strategy.

First, we need to modernise the state owned industries. The public sector share in the economy has never gone below 40 percent, and during the crisis the state has seen its role increase, of course. This trend has been seen around the world, but from the long-term point of view there is nothing good in this.

We need to understand what kind of state sector structure best suits our strategic goals. I am instructing the Government to draw up resolutions for optimising the extent and effectiveness of the state’s participation in businesses’ operation. This concerns the future of a number of assets that have strategic status at the moment. By 2012, we need to accomplish the relevant programme and bring our state sector into line with the optimum parameters set for some foreseeable future, as nothing lasts forever. I stress that this is something we need to undertake very carefully so as not to waste assets that belong to our entire nation.

But it would be senseless too to hold onto a huge amount of assets with no hope of modernising them.

Regarding state corporations, I think that this legal form of enterprise has no future overall in the modern world. The corporations with a lifetime set by law should wind up once their purposes are accomplished, and those operating in a competitive business environment, should be eventually transformed into joint stock companies under government control. In the future, they should either remain in the public sector in cases where necessary, or should be sold to private investors.

We also need to carry out an independent audit of [state] corporations and of large companies with state participation, introduce modern corporate governance models in them, and peg the pay of their managers directly to performance results in cost-cutting, energy efficiency, raising labour productivity and introduction of new technology and innovation.

Optimising budget spending is a constant priority for the executive authorities. The Government needs to develop and introduce a system of measures creating long-term incentives for raising the quality of state services and ensuring responsibility for effectively spending budget money and producing more efficient results in general.

It is absolutely unacceptable that Russian taxpayers should have to pay more for this or that service than people in the leading developed countries.

Second, we will establish a comfortable environment in Russia for world-class research and development. French scientist Louis Pasteur hit the nail on the head when he said that, “Science should become the country’s highest incarnation, because among all the world’s nations, whichever people is ahead of the others in thinking and intellectual activity will always be the leader.” These are fine words.

Our country has always had an abundance of innovative, progressive and talented people. They are the pillar holding up the innovative world, and we need to do everything we can to make these specialists want to work here in their own country. This requires us to establish effective mechanisms for supporting them, and also for attracting to Russia Russian and foreign scientists of repute, and entrepreneurs with experience in commercialising new developments. This is a complex business. We should simplify the rules for recognising degrees and diplomas awarded by the world’s leading universities, and also the rules for hiring the foreign specialists we need. Such people should receive their visas swiftly and for a long period. It is we who have an interest in bringing them to Russia rather than the other way round.

Incidentally, many of the people commenting on my article said these same things, noting that our compatriots, Russian scientists working abroad, could form an important part of the expert community and help to organise international expert evaluation of Russian scientific projects, and if we offer the right conditions, could simply return here to work.

I am instructing the Government to expand the system of grants on the basis of tenders for those developing new technology. Development institutes should search for and select promising projects from all around the country and provide financial support for innovative enterprises, including the small innovative businesses that the law now allows universities and scientific establishments to set up. Of course, they should share the risks in these ventures with private investors.

This is something our people are also talking about. I will voice an idea that was sent in from the Republic of Altai and proposes that modern universities set up business incubators. These sorts of ideas have been suggested in the past too. Such university-based business incubators would give graduates the chance to learn how to turn their scientific ideas into profitable business projects. I think this kind of idea deserves our full support.

I stress that not only the state but also our major companies should play their part by placing advance orders for the results of the research carried out. You could say this is all part of their social responsibility. A large share of projects should go through an international expert evaluation and be carried out in partnership with foreign centres and companies.

The deadline for the Government to make all the organisational and financial decisions needed to accomplish these tasks is the first quarter of next year. I bring it to your attention that itemised allocation of state funds for these purposes should primarily reflect the technological development priorities we have set.

Finally, we need to complete preparation work on the programme for establishing a prominent research and development centre in Russia to focus on support for absolutely all of the priority areas. This is a project to create a modern technological centre, something on the lines of Silicon Valley and similar foreign centres. It would offer attractive working conditions for leading researchers, engineers, designers, software programmers, managers and financial specialists, and it would produce new technology able to compete on the global market.

The third systemic step that we need to take is to change our laws and public administration system in such a way as to put our entire economy on an innovative development track.

We have said on many occasions that procedures for investment in Russia should be as convenient as those of our competitors, and the control and supervision, including the products certification mechanisms, should not create extra barriers for investors ready to put their money into innovative solutions.

I am giving the Government a two-month deadline to draw up proposals on introducing new procedures for obtaining the approvals and permits needed to launch investment projects. This work should make it possible to get projects underway more rapidly, within a fraction of the currently required time. If we take this step, it should take no more than 3 to 4 months to complete the whole approval process for sites not classified as ‘hazardous’. At the moment, it takes 18 to 24 months, and in big cities the approval process can often drag on for years.

The regional authorities should have the power and responsibility for coordinating this work. Officials who systematically delay the approvals process and demand payments other than those explicitly stipulated by the laws should face administrative and other penalties and, if necessary, be fired.

Fourth, our tax system and also our laws on mandatory insurance contributions should be adapted to our modernisation demands.

In the first quarter of next year, the Government will present draft laws on establishing favourable conditions for innovative activity, including, but not limited to, the introduction of a five-year favourable transition period regarding the increase of mandatory social insurance contributions. We need to define very clearly at the same time who will be entitled to preferences.

Overall, our tax system clearly needs improving. The discussion on what taxes and what rates we should pay is not closed. Of course, the crisis has hindered decisions on reducing the tax burden, but we will soon need to come back to these issues, and we will most certainly do so.

Colleagues,

It is clear that we cannot carry out our strategic plans without real change in society. Only if we strengthen our political system and legal institutions, our country’s internal and external security, consolidate our social stability and develop modern education and culture, the culture in the broadest sense of the word, will we be able to achieve success.

Through our joint efforts, not only will our living standards show real improvement but we ourselves will change too. We need to overcome the widespread view that responsibility for sorting out all problems lies with the state or with whoever else, but not with each of us personally. Personal success, encouragement of initiative, a better quality of public discussion, and zero tolerance of corruption should become part of our national culture, an intrinsic part of who we are.

Achieving these goals requires us to start at the beginning – by educating new individuals right from the school classroom. As prominent economist Vasily Leontiev said, “Education fulfils one of humanity's most basic needs and is a social investment that generates future material production growth. It raises the present generation’s living standards and at the same time helps to raise the income of future generations.”

In my Address last year, I presented the proposal and gave the instruction to draft an initiative – Our New School. This has been done, and I will set out this initiative’s basic proposals now.

The modern school’s main aim is to develop each pupil’s potential and help form them as individuals ready to take their place in a high-technology and competitive world. The discussions on my article produced a huge number of comments on school education, a lot of people write about this subject because it is something that concerns us all. What people are saying is that school education should teach children to independently set and achieve serious objectives and be able to react to all kinds of different circumstances in life. What is this initiative’s essence and what immediate steps will it involve? I remind you that we have declared 2010 Year of the Teacher, and first of all, we plan to draft and introduce new education standards and consequently expand the list of documents evaluating and attesting to each pupil’s success. The final national school exam will be the basic document in this respect, but will not be the only means of verifying the quality of education.

Furthermore, we will introduce monitoring and comprehensive evaluation of students’ academic achievements, skills and abilities. We need to pay particular attention to students in the senior classes, where the curriculum should be tied directly to the choice of fields in which to specialise at the universities.

Second, schools should become creative and information centres offering a rich intellectual and sporting life. An architecture tender will be held for selecting new design projects for building and reconstructing schools. This should have been done long ago. The new projects will go into use around the country starting from 2011. The task is to build ‘smart’ buildings, modern buildings, in other words, offering all the technology needed for pupils to learn, build up their health, and enjoy good-quality decent hot meals. All schools should have access not to ordinary but to broadband internet.

Starting next year, we will introduce new standards for physical education classes – at least three hours a week, taking into account children’s specific personal circumstances in all cases. In general, in all areas we need to take into account children’s individual circumstances and modern scientific knowledge about children.

One particular objective is to create a barrier-free school environment for children with disabilities. A five-year state programme – Open Environment – aimed at resolving these problems will be adopted in 2010.

The third thing we must do is give our schools more independence, both in elaborating individual educational programmes and in spending funds. Starting next year, schools that do well in the competition within the national project, Education, will be granted independence and they will become autonomous institutions. Mandatory reporting for such schools will be drastically reduced in exchange for their making available the information on the results. Headmasters of such schools will sign contracts that will provide for special contractual working conditions based on the performance results.

Fourth, we need legislation to make public and private education more equal in the legal sense, to give families bigger choice of schools and give students access to the best teachers through distance learning and supplementary education. This is especially important for ungraded and remote schools, those in Russia's outlying districts.

Fifth, we have to undertake a complete overhaul of the teacher training system. We will be introducing mandatory refresher courses and advanced training using the best Russian universities and schools as the basis. Funds for professional development should allow ro choose among a range of educational programmes, and teacher training institutes should be gradually transformed either into major basic centres for training teachers or into faculties of education at universities. We will seek to invite those who are able to provide a better quality of specialised education for senior students to teach in our schools. This will include skilled professionals who have no formal teacher education. Those who choose to work in schools will be able to take short-term specialised courses. At the same time we will introduce a special system of incentives and new mandatory certification requirements for teachers.

I am counting on this initiative (Our New School) to be more than just another administrative project, of which we have many, but rather a programme to which our whole society will dedicate itself. This is something that we all need.

Along with the family, the school is the basic social institution, which shapes individuals, inculcates the national and global cultural values in the younger generation, and nurtures civilised citizens. And an innovation economy can emerge only in a specific social context as part of an innovative culture based on humanistic ideals, creative freedom, and a desire to improve the quality of life. Enshrined in our national culture, this ethos determines the successful development of the individual and the nation as a whole. For this reason we are devoting considerable attention to the development of culture and extending work in this regard on several fronts.

First, we must do everything we can to support the creation of infrastructure needed for normal cultural development, particularly in Russia's regions, in its provinces. In small cities, towns, villages, those places lacking in modern cinemas, large libraries, theatres and exhibition centres, we need to actively promote information technology. This must be the basis for cultural modernisation. New technology will provide access to culture for millions of our fellow citizens and, most importantly, for our young people.

We also need to take a closer look at the special emphasis, after-day-programme educational institutions in the provinces. They are in a difficult situation. We must provide basic education in music and dancing, teach the fundamentals of drawing and painting, and make theatre accessible to all children, in whatever remote corners of the country they live.

Second, we need to work hard to protect the uniqueness of our country's culture in all its diversity, to help preserve the rich ethnic traditions of Russia's peoples, and at the same time develop and improve Russian language programmes, which serve as the basis for communication and unity in our country.

In one of my meetings with teachers they rightly pointed out: “It’s time that we stop getting caught in minor details and start to deal with our country’s real problems, and we have plenty of those.”

Third, we must take great care to support innovative and experimental trends in the arts. In addition to preserving our traditions and protecting our extraordinarily rich cultural legacy, the government should encourage those who are exploring new paths in their creative work. It should be borne in mind that what we call the classics today was often created by those who flouted the canon, through the rejection of conventional forms and breaking with tradition. This spirit of innovation should be encouraged in all spheres of our cultural life.

It is the government's job to create the necessary environment for the development of civil society. People who are not indifferent to what is happening around them should benefit from every opportunity to realise their noble aspirations.

We will continue to support non-profit, charitable organisations that help resolve complex social problems. Corresponding amendments to legislation will be designed to simplify the operation of non-profit organisations that are engaged in charity work and help vulnerable social groups.

What will be done in this respect? First, we will introduce the concept of socially oriented non-profit organisations. Those who receive this status will be able to count on the government's direct support. The authorities will be able to provide such non-profit organisations with financial, information and consulting support. But this is not all: what is no less important, they will receive tax incentives and governmental and municipal orders. It will be possible to transfer property to non-profit organisations for them to use in their work.

We intend to eliminate any tax on the material assistance provided by charitable and non-profit organisations to children without parental support, as well as to the disabled.

There is another suggestion. Services rendered by non-profit organisations in caring for the sick, the disabled, the elderly, and social services for orphans and children without parental support, will be exempt from VAT.

Neither will any income tax be taken from grant-supported projects such as health programmes, promotion of popular sports and physical education.

Another change in legislation that we have been talking about for years now concerns the creation and replenishment of special-purpose capital of non-profit organisations. This will become possible through donations of securities and fixed property (this conversation has been going on for some years now), and environmental protection will now be on the list of activities for which special-purpose capital can be used.

Third, we will finalise and adopt rules governing charitable activities. In particular, their objectives will include: the social rehabilitation of orphans and children without parental support, providing legal assistance, promoting scientific and technical creativity of children and youth, philanthropy and volunteering.

Fourth, the term “donation” laid down in the Civil Code should be supplemented to indicate that works or services can be performed or rendered free of charge.

All these measures will support those who are already engaged in socially useful work as well as, I hope, attract more people. Along with this there should not be any loopholes that allow one to skulk behind such activities for tax evasion purposes – this is also obvious. I repeat: we will support only those who selflessly devote their time and effort to others.

The growth of civic consciousness and development of civil society is only possible in a developed political system.

Today we are talking about modernisation – this is the essential aspect of my Address today – about our desire to be modern. We must remember of course that modernity is a fluid notion. It is not a final stage of progress at which point you can rest and relax, as we say – quite the contrary. A truly modern society is the one that seeks constant renewal, continuous evolutionary transformation of social practices, democratic institutions, visions of the future, assessments of the present, the one engaged in gradual but irreversible changes in technological, economic and cultural spheres, the steady improvement of the quality of life.

However, changes for the better occur only when there is an opportunity to openly discuss problems that arise, an opportunity for fair competition between ideas on how to resolve such problems, and in places where people appreciate social stability and respect the law and at the same time are willing to assume responsibility for the situation in their own village or town, and realize that only an active position can set the heavy machine that is government bureaucracy in motion.

Under the Constitution the sole source of power in our country is the people. In practice, economic, social and foreign policy is developed following complex interactions between various social groups. It is the duty of the government, of any democratic government, to take into account the legitimate interests and opinions of all citizens of Russia, regardless of their ethnicity, religion, political or other beliefs. The ability to fulfil this duty is the main criterion for the effectiveness of government.

Our society's political diversity is defined by the structure of our multi-party system. Today we can say that the multiparty system has evolved throughout the Russian Federation. It has become a stable, functioning, national political institution, the most important tool for ensuring the fundamental rights and freedoms of our people, including their exclusive right to power.

The political parties currently operating in our country have passed the test of time. As they fought for votes and voters' trust they have become stronger, and become truly popular. They have an organisational structure, personnel and intellectual capabilities: all that is necessary for work in a country Russia's size. Their programmes reflect the entire spectrum of society's political views.

At the same time, many aspects of political life have been subject to public criticism. There have been problems regarding the organisation of elections, low levels of political culture, and a lack of alternative proposals on specific issues of socio-economic development.

We must continue to work together to improve the quality of popular representation and create additional conditions for free, fair and civilized competition between parties.

Already this year, a parliamentary majority supported a number of my legislative initiatives designed to address such problems. In practice we have reduced the so-called barrier parties must overcome to enter the Duma to 5 percent. Parties now have the right to nominate candidates for regional governors, and have also been given guarantees of equal coverage of their activities in state-owned media. I would like to thank the Federal Assembly for supporting these initiatives.

What am I proposing today? In the next phase I propose to focus on strengthening democratic institutions at the regional level. Following consultations with representatives of non-governmental organisations and political parties I think the following things are necessary:

First, we need to introduce a single criterion for establishing the number of deputies in the regional legislatures of the Russian Federation. Today it is completely arbitrary and it sometimes leads to results that are hard to justify. For example, many millions of people in an economic powerhouse like Moscow are represented by 35 elected members in the city's Duma, whereas the Great Khural of the Republic of Tuva [the Republic's bicameral legislature], where the economic output of the region is unfortunately much less impressive than it is in Moscow and there are 30 times fewer people, has 162 elected members. There should be a flexible procedure for the gradual alignment of these imbalances. Representation should be more functional.

Second, all parties represented in regional parliaments will have the opportunity to form factions. Everyone should receive guarantees that their representatives will be able to fill in deputy vacancies on a permanent basis and in leadership positions.

Third, where this has not yet been established, any party that receives more than 5 percent of votes in the regional elections should be guaranteed representation in the regional legislature.

Fourth, parties not represented in the Duma, but with a faction in the regional legislative assembly, should be exempted from having to collect signatures to participate in regional elections in their respective territories. The same principle can be established for municipal elections.

One another thing: I think that in future we should dispense with the idea of collecting signatures as a method of determining whether a party can stand in an election.

Our laws are already quite exigent when it comes to formation of political parties. They require the parties to have a minimum number of adherents as expressly set out in the regulations and operate in most regions of the country. So additional tests concerning popular support and organisational abilities are not required.

Fifth, it would be useful for legislatures at all levels to devote at least one meeting per year to hearing and discussing reports and proposals from parties not represented in the legislature.

Extra-parliamentary parties should also be able to participate on a continuous basis in the activity of the central and regional electoral commissions.

Sixth, it's time to finally bring some sort of order to early voting in local elections. Laws on the election of the President and State Duma deputies strictly limit the time frame for this procedure and clearly define in what cases it can be used. Using precisely these rules as a basis, we need to make the appropriate adjustments to federal and regional legislation. I also think we need to examine the use of absentee ballots and to take whatever measures are necessary to prevent electoral abuses and violations in this regard. We also need to give all parties equal opportunity concerning the use of municipal buildings for pre-election campaigning.

Seventh, I recommend that all regions of the Federation enact laws to assure equal coverage in the media for parties represented in regional parliaments. Mechanisms for the implementation of such safeguards must be adapted to the media market in each region, its particular social and cultural characteristics, but this must be done.

The legislative assemblies in those regions of the Federation where this has not been done can use the State Duma as their model, where the most important meetings are broadcast on the Internet in real time. I propose that the State Duma arrange to have all public plenary meetings broadcasted, without exception. I think that this experiment will be of interest for the Federation Council and possibly the Constitutional Court.

Eighth, I propose to supplement the statutes and constitutions of Russia's regions with articles requiring heads of executive authorities to report to local parliaments on an annual basis, by analogy with Russia's own Constitution.

Ninth, this year there has been some inter-party debate as to whether we need to switch over to a system when only those on party lists can run for elections to representative bodies at all levels. Incidentally this idea was expressed by representatives of both the ruling party and the opposition parties. We have not yet come to a consensus on details. I am proposing that we go to work on this. We need to continue with this discussion, and then I will make my decision.

Tenth, we will continue and intensify work on technology designed to ensure political competition. This is a very important thing in the world today. During the discussion in the run-up to this Address, someone spoke to this issue, a journalist from the Stavropol Region who sent in the following comment: “The present arrangement of the electoral process is part of Russia’s national infrastructure, like its roads, its electricity, its postal service. Take away this element of national infrastructure, and you end up with a whole layer of a Russian citizen’s life being profoundly affected.”

Government plans to promote broadband Internet in Russia's rural areas will open up new prospects for transparent public debate on any topic, and provide comprehensive information on developments in our country and the world at large. The introduction of electronic counting and information processing at polling stations will help to combat abuses and violations during election campaigns. It should also make the electoral system at the regional level more transparent. I would like to commission the Cabinet, the Central Election Commission and our regional authorities to prepare a programme for accelerating the technological modernisation of the electoral system.

As the guarantor of the Constitution I will continue to do everything possible to strengthen democratic institutions in our country. At the same time I would like to emphasise: the consolidation of democracy does not mean weakening the rule of law. Any attempts to use democratic slogans to destabilise the situation, the government, and to split society will be prevented. The law is the same for all – for both the ruling party and the opposition. And freedom, as we know, entails responsibilities. I hope this is clear to all in this hall.

At the beginning of next year we can discuss these issues at a meeting of Russia's State Council. I am inviting representatives of all political parties to participate in this important endeavour.

Deputies, members of the Federal Assembly,

In my article I referred to corruption as one of the main obstacles to our development. It is clear that the fight against it must be waged on all fronts: from improving legislation, the law enforcement and judicial systems, to inculcating intolerance to all manifestations of this social evil, including domestic ones.

In Russia we often say that there are few cases in which corrupt officials are prosecuted. I want to cite a few figures. In just six months of this year we have reviewed more than 4,500 cases of corruption convicting 532 officials of government authorities and local self-government bodies, and more than 700 law enforcement officers. These figures unfortunately show the extent to which corruption has infected our society. However, simply incarcerating a few will not resolve the problem. But incarcerated they must be.

To successfully combat corruption, all spheres of government must become more transparent, including the activities of public authorities, courts and other judicial bodies. That is the aim of the relevant laws which will come into force next year: the transparency of government and accessibility of information about the activities of the courts. These laws will also establish a mechanism for posting information on the activities of the courts on the Internet. The published texts of judicial decisions will allow us to gain a clearer idea of the work done by the courts, problems in legislation and judicial practices. I am confident that this will contribute to overcoming legal nihilism.

We are also planning to establish courts of appeal in courts of general jurisdiction. At the first stage which starts on January 1, 2012, this will be done for civil cases.

How will such an appeal be different from what the current system allows? As everybody knows, an appeals court considers the complaint regarding the court's decision in full: that is, by examining and evaluating both the factual circumstances of the case and its legal implications. In this case an appeals court should either confirm the decision of the lower court, or arrive at a new verdict – and this is the fundamental difference – on the merits of the case.

Such a test of judicial decisions should enhance their legitimacy and validity. And it's important to note that this will not drag out the process required for examining such cases.

In order to fully support the appeal process, including the second stage for criminal cases (from January 1, 2013), we will need to increase the number of judges and allocate appropriate resources in the federal budget.

I want to emphasise that a properly functioning judicial system is possible only when judges have a reasonable caseload. The number of judges per thousand people brings us close to European standards, but in Russia every judge has several times as many cases as their European colleagues. We shouldn't forget this either.

The quality of the judicial system largely depends on the law enforcement situation, which is far from ideal.

We need to take some very strong measures to cleanse the ranks of police and special services and rid them of the unworthy. These people should be brought to justice.

Those who work in these agencies will be obliged to provide information about what they own and what their family members own. We must do everything we can to improve discipline, rigorously conduct internal investigations, and strive to make moral and psychological qualities of our staff fit the highest professional standards.

At the same time, we must remember that the majority of law enforcement officers are honest people. They risk their lives every day. They are at the front-line of the fight against crime, they protect the foundations of the constitutional order, and we must improve their financial security. Their work must be respected by society as is the case in the rest of the world.

Let me dwell on another important aspect. Our criminal law and its application need to be brought up to date. Criminal penalties, both the ones prescribed by the law and those imposed by the courts, should be commensurate with the seriousness of the crime and in this way better protect the interests of society and of the victim.

In criminal law we should make greater use of so-called administrative preclusion, that is, prosecute only in the case of repeated administrative offences. We must make greater use of fines as punishment for minor offences, minor crimes and non-violent crimes. And if fines are impracticable, then offenders should have to work to serve their sentences, and this should be officially registered as a separate type of punishment.

By the way, it is a good idea to use such measure of restraint, such sanction as bail. The amount of bail for certain categories of crimes should be increased.

I support the bill currently being considered by the State Duma aimed at excluding from criminal responsibility any taxpayer who has fulfilled his or her obligations and paid the appropriate fines and penalties. Such people should not be subjected to additional checks by law enforcement agencies.

Now for what I consider to be our most serious, domestic political problem, the situation in the North Caucasus.

Terrorist crimes against government officials, members of the clergy and law enforcement agencies destabilise the situation and prevent normal economic and social development in the region.

We will engage in an uncompromising struggle against international terrorism and we will destroy the gunmen. Soldiers and prosecutors going about their work in the North Caucasus region will receive special government attention. Presidential orders and Cabinet directives will provide them with additional benefits and social support. And we will continue to pay attention to this.

I have already said that the situation in the North Caucasus would not be so acute if there was some real socio-economic development. It is obvious that the source of many problems lies first and foremost in economic backwardness and the fact that the majority of people there lack normal life prospects. Let us speak frankly: the level of corruption, violence and cronyism in the North Caucasus republics is unprecedented. Therefore, we will give priority attention to resolving the socio-economic problems of our citizens there.

This year, two federal target programmes for the development of southern Russia and the Chechen Republic have been allocated over 26 billion rubles. By the end of the year the Cabinet should adopt another federal programme to support the development of the Republic of Ingushetia from 2010 to 2016 with funding of at least 32 billion rubles.

As you can see, the sums available for the entire North Caucasus region are significant. However, the effectiveness with which they are spent leaves much to be desired. Moreover, part of these funds is stolen quite shamelessly by officials. And this at a time when unemployment and therefore mass poverty in the Caucasus has reached alarming levels.

This problem is particularly acute in Ingushetia where more than half of the economically active population is unemployed. And it is also dire in the Chechen Republic where the figure is more than 30 percent.

I would also point out that this region has the highest share of young people in Russia, those between 15 and 20 years old. And for quite obvious reasons it is more difficult for young people to find work. In the Chechen Republic the proportion of unemployed young people is more than 40 percent.

In some areas of the North Caucasus the number of refugees and displaced persons has reached 20 percent of the local population. And the lack of a permanent job is just one of the many problems that these people face.

The conclusion is clear: additional measures are required to successfully address the problems of the region. We need to develop entrepreneurship and to increase investment. Up till now we have failed to create favourable investment climate in most of the North Caucasus republics, but that situation must change. In this regard, I have instructed the Cabinet to draw up within six months a list of investment projects that will receive targeted support.

Such projects can be implemented in energy and construction, tourism and the health resort network, agriculture and small business. We need to consider the possibility of tax breaks and other financial mechanisms to encourage increased investment. These will be part of the incentive for entrepreneurs to start business here. I also urge anyone who was born and raised in these regions, but for whatever reasons is now working in other parts of the country, to help with the development of their native land.

Another problem is the system of temporary labour migration. Experts have already pointed out that one of the factors limiting economic development in the North Caucasus is the low quality of education, especially university education. In this regard, we must take steps to train and retrain teachers, at both universities and schools. I am instructing the authorities to organise internships in major universities in Russia and abroad and to use the presidential management training programme for this purpose.

Finally, I think it's important to develop and implement clear criteria to measure the effectiveness of actions taken by federal authorities to deal with problems in the North Caucasus. I am asking the Cabinet to establish these criteria by January 1, 2010. And there has to be a single individual who will be personally responsible for the situation in the region. Of course it has to be someone with enough authority to effectively coordinate work in this area. Such a person will be named soon.

The North Caucasus is a region that has been historically inhabited by people of many ethnicities. And today it is especially important that people work systematically in their families and at school, at the local and regional levels, to create good ethnic relations and a mature civil society. This is especially important when it comes to the education of the younger generation. I think that young people from different ethnic groups and faiths should have the opportunity for collaborative learning and joint leisure. For this reason I support the idea of creating a pan-Caucasian youth camp, where young people from different republics can study, touch base and relax together.

To finish with this subject, I would like to say that we will do everything possible to improve people's lives in the North Caucasus. And we will deal with those who hinder us.

Dear deputies and members of the Federation Council,

Next year the transition of Russia's Armed Forces to a qualitatively new level should be complete, and we will have created a modern, efficient and mobile army, trained and equipped to protect us and our allies from any threats.

One of the most challenging and fundamental problems is supplying our troops with new systems, new sorts of weapons and military equipment. There is no need to embark here on some sort of abstract discussion: we simply need to acquire these weapons. In the next year we need to provide the Armed Forces with more than 30 ballistic land- and sea-based missiles, 5 Iskander missile systems, about 300 modern armoured vehicles, 30 helicopters, 28 combat aircraft, 3 nuclear-powered submarines, 1 corvette-class battleship and 11 spacecraft. All this simply has to be done.

Another important issue is providing the Armed Forces with modern automated control centres and information systems. Before 2012 we need to replace outdated analogue communications equipment with digital systems, and give priority in equipping with these modern communications means to the troops of the North Caucasus Military District.

Once again I would like to draw your attention to the need for the latest sorts of arms which will ensure our superiority over any enemy. We must also have an effective system of orders for military goods and maintain a strictly observed balance between the supply of arms for national defence needs and supplies abroad. I should stress again that the heads of the defence industry enterprises should substantially improve the quality of their products and reduce their cost.

By the end of this year we will have set up military-educational institutions of a new sort, three major military training centres, in Moscow, the Moscow Region and St Petersburg. They will play a crucial role in training the younger generation of officers, officers who will be not only professionally trained but educated in the values of patriotism, military honour and moral rectitude.

As part of the effort to raise the prestige of military service and officers' status in society, we are planning to open seven presidential cadet schools. The first one will open next year in the Volga Federal District, and the others will open over the next three years in other federal districts.

The army will gain professional sergeants and highly qualified junior command personnel. They will assist officers in educating and training soldiers to improve their combat skills.

Providing servicemen with permanent and service housing remains our priority. The Russian government managed to increase the funds allocated this year for this purpose by more than one-and-a-half times. The Russian Ministry of Defence and other law enforcement agencies have to uphold their commitments concerning the construction and purchase of apartments. Our goals of providing permanent housing in 2010 and service housing by 2012 must be achieved.

Before 2012 we should adopt a special law on military pay. A new system of payment for military service and material incentives should significantly improve the lives of our soldiers.

Dear colleagues,

Our relations with other countries should also be focused on the task of modernising Russia. We must not simply be full of hot air, as they say. We are interested in capital inflows, new technologies and innovative ideas. We know that our partners are counting on a rapprochement with Russia to realise their own priorities.

Therefore, our foreign policy must be extremely pragmatic. Its effectiveness should be judged by a simple criterion: does it contribute to improving living standards in our country?

In my previous Address, I spoke at length about our foreign policy priorities, priorities which remain the same today. We still advocate stronger multipolarity, a concept which is becoming increasingly widespread throughout the world. 10 years ago, or even five years ago, could we imagine the leaders of so many different countries sitting at one table and discussing financial, economic and in effect domestic issues? But that is exactly what happens at G20 summits.

It was these processes I had in mind when I wrote in my article that we are already working together to reform the global financial architecture and security system, to modernise them effectively so that they can take into account the interests of an increasing number of countries and establish equitable relations in international politics and economics.

Of course, this creates new challenges for us all. We must therefore change our approach and think more about how to engage in teamwork. We are ready for this, including with respect to complex issues of international politics, such as the problems of Iran and North Korea's nuclear programmes, instability in Afghanistan, a Middle Eastern settlement, and naturally other problems as well.

We have the universal mechanism of the United Nations to help us develop a collective approach. In recent years and perhaps for the very first time since the end of the so-called Cold War, the United Nations has once again started to gain momentum. And we will actively encourage it to strengthen its position.

In the field of security we are now focussing our main efforts on a European security treaty. Legal, or rather the international legal formalization of the principle of indivisible security in Euro-Atlantic territory is imperative for us, as is the development of enforcement mechanisms related to this commitment. We are sometimes accused of having come up with this against NATO. This is not true: we absolutely do not conduct our foreign policy ”against anyone“. But we are not a member of NATO. This is true, and several other states are not members of that bloc either, but tough decisions must already be taken in order to strengthen security in Europe. We need a new, efficient platform. If we had such an effective institution that would have been able to halt an aggressor, then Georgia would not have had the nerve to start a war against South Ossetia.

In conclusion I would like to draw attention to the need to increase coordination as we defend Russia's interests in foreign policy, economic, cultural and educational spheres. Diplomatic work in the interests of the country's economy, precisely its economy, must be subject to special checks. This work should be conducted not only in the form of specific assistance to Russia's companies abroad and efforts to promote national brands of goods and services – though this is very important – but it should also be designed to increase the volume of foreign investments we attract and, most importantly, the influx of new technologies.

I am instructing the Cabinet to develop clear criteria for assessing the results of foreign policy activities designed to meet challenges associated with modernisation and technological advances.

Our Foreign Ministry must review this work on a systematic basis and, depending on its results, prepare a programme for the effective use of foreign policy elements for long-term national development.

Dear friends,

Next year we will celebrate the 65^th anniversary of Victory and honour our veterans – the saviours of our Fatherland, heroes who defended our freedom, who lived through the war and raised our country from the ruins.

We all consider them to be great people, but they are great not only as actors in a grand historical drama. For us they are close relatives in the direct and literal sense of the word. We share the same blood with those who won and are therefore all descendants of winners, and for that reason I believe in a new Russia. We must remember and respect our past and work hard for a decent future.

We shall overcome underdevelopment and corruption because we are a strong and free people, and deserve a normal life in a modern, prosperous democratic society.

We chose our own path. Our fathers and grandfathers won at that time. Now it’s our turn.

Go, Russia!

Address to the Federal Assembly of the Russian Federation

2015-03-20T18:02:33+04:00

President of Russia Dmitry Medvedev: Citizens of Russia,

Deputies and members of the Federation Council,

I will begin this Address with an evaluation of events so far this year. Our country held elections to its key institutions of power this year. A new Government was formed following the presidential election and the parliamentary parties began full scale work in the new State Duma.

Implementation began of new plans for long-term economic and social development. Work is underway on factories and roads. The Armed Forces are being modernised and re-armed. We are spreading and developing new technology. We are establishing educational, scientific and medical centres. Our country’s sportspeople have achieved some memorable victories.

But for our citizens, for all of us, this year has not just been a time of new hopes and achievements. Events of great significance for each one of us in this country, I am sure, have taken place, events that have also been a serious test for all of Russia.

I am talking about the barbaric attack on South Ossetia, and also about the growing global financial crisis. These two very different problems have some common features and, one could say, have a common cause. The Georgian army’s attack on Russian peacekeepers resulted in tragedy for many thousands of people, for entire peoples. This provocation led to a sharp increase in tension throughout the entire Caucasus region.

The conflict in the Caucasus was used as a pretext for NATO naval vessels to enter the Black Sea and then to speed up the imposition of an American missile defence system on Europe. This situation forces Russia to take measures in response (which I will talk about today). Thus, Tbilisi’s adventure in its own backyard has had repercussions that go far beyond the region, have increased tension across Europe and throughout the whole world, cast doubts on the effectiveness of the international security institutions and destabilised the foundations of the world order.

The global financial crisis also began as a ‘local crisis’ on the U.S. domestic market. As the biggest developed economy, tightly linked to the markets in all the developed countries, when the U.S. economy began to slide it pulled financial markets all around the globe with it in its fall. This crisis has now become global in scale.

This tendency of local problems to take on a global character has become a typical feature of our interdependent world. We have long since made our choice in favour of far-reaching integration into the world economy. We are aware of our responsibilities. Having gained some considerable advantages during the period of active global economic growth, Russia is ready now to stand together with other countries to address the difficulties that have slowed this growth down. But we need to put in place mechanisms that can block the mistaken, selfish and at times simply dangerous decisions made by some members of the international community. It makes no sense to hide the fact that the tragedy of Tskhinvali was made possible in part by the conceit of an American administration that closed its ears to criticism and preferred the road of unilateral decisions.

I think that this idea that emerged in the United States after the Soviet Union collapsed that its view is the only indisputably correct view led the U.S. authorities also into making serious economic miscalculations. They let this currency bubble grow in the interests of stimulating domestic growth but did not bother coordinating their decisions with the other players on the global markets and neglected even the most basic sense of measure. They did not listen to the numerous warnings from their partners (including from us). As a result they have caused damage to themselves and to others.

But, as the saying goes, every cloud has a silver lining. The mistakes and crises of 2008 are a lesson to all responsible nations that it is time for action. We need to radically reform the political and economic systems. Russia, in any event, will insist on this. We will work together on this with the United States, the European Union, the BRIC countries and all parties with an interest in reform. We will do everything possible to make the world a fairer and safer place.

I am sure that we can achieve this because our country is economically and politically strong. The military operations in August and the worrying news from the world markets have clearly demonstrated the maturity of our civil society and the political unity of our country. It was pleasing to see (and I say this with sincere gratitude) that our country’s big political parties acted in a spirit of solidarity during the events in the South Caucasus, and that the anti-crisis measures aimed at stabilising the economy have also been met with understanding.

I think it could hardly be otherwise when we are talking about a people with more than a thousand years of history, a people that have developed and brought civilisation to a vast territory, created a unique culture and built up powerful economic and military potential, a people who act on the solid basis of values and ideals that have taken shape over the centuries and stood the test of time.

I would like to say a few words separately about our values, our society’s ideals and moral principles. I have no intention of giving moral lectures or going off into abstract reflection. The job of President of Russia is very concrete and practical. But I say quite frankly, based on my own experience, that it is far from easy to make decisions that will affect the lives (in the most direct sense), welfare and health of thousands of citizens, and the reputation and destiny of a great people. When I make these decisions I need to have it firmly in my head that there are things that cannot be given up, things for which we need to fight until victory, things dear to you, dear to me, dear to us all, things without which it is impossible to imagine our country.

Our people have a rich spiritual and moral heritage. We have much to love and be proud of, much to stand up for and defend, and much to aspire towards. This is why we will stand firm in the Caucasus. This is why we will overcome the global financial crisis and emerge from it stronger than ever.

Now I would like to speak about our values. They are well known.

There is justice, which we understand as political equality, honest courts and responsible leaders. Justice is embodied in practice as social guarantees and the fight against poverty and corruption, the efforts to give each individual a decent place in our society and give the Russian nation as a whole a worthy place in the system of international relations.

There is freedom – personal, individual freedom.

It means economic freedom, freedom of speech and religion, freedom to choose one’s place of residence and one’s job. And there is general national freedom, the independence and freedom of the Russian state.

There is the welfare and dignity of human life. There is interethnic peace and the unity of diverse cultures. There is protection for small peoples, and the recognition of South Ossetia’s and Abkhazia’s independence is an example of this protection.

There are family traditions, love and faithfulness, care for the young and for the old.

There is patriotism, along with the most sober and critical look at our country’s history and our far from ideal present, belief in Russia that shines through no matter what the circumstances, deep-rooted love for our native land and our great culture.

These are our values, the foundations of our society and our moral beacons. To put things more simply, it is these self-evident things that we all understand that are what make us a single people, what make us Russia.

These are the things that we will never give up no matter what the circumstances.

Our values form our vision of the future. We aspire to a fair society of free people. We know that Russia will be a prosperous and democratic country. It will be a strong country that offers its people a comfortable life. It will be the best country in the world for the most talented, demanding, independent and critically-inclined citizens.

I want you all to know that our goals remain unchanged. The sharp fluctuations in the political and economic situation, the turbulence in the world economy and even the rise in military and political tension will not serve as a pretext for dismantling democratic institutions or for nationalising industry and finance. Citizens’ political freedom and private property are sacred.

I want to stress that the state authorities will fulfil all their commitments to the public. The Government cabinet and the executive authorities at every level in their daily work will pay the utmost attention to people’s savings, pensions and all the social guarantees and will fulfil their responsibilities. In this respect, I remind the heads of the ministries and agencies, the country’s regional authorities and the local government institutions that, in accordance with Article 7 of the Russian Constitution, the Russian Federation is a social state that ensures free development for individuals and at the same time provides social protection. Any infringements of civic freedoms and any action that worsens people’s material situation are therefore not only amoral but also illegal.

Much has already been done to protect our economy from external risks. It was not in vain that we built up our gold and currency and budget reserves. It was not in vain that we moved over to medium-term budget planning. As soon at the global financial crisis began making its effects felt on our financial system we took rapid steps to normalise the situation. The Government adopted an action programme to minimise the effects of the crisis in Russia, improve the banking system’s health and support specific economic sectors. The important thing now is to implement these measures in full.

I draw the attention of the Government, the Central Bank and all the state organisations to the fact that there can be no delay in implementing these measures. We need to remove the ‘financial clots’ that have formed in our economy. We need to take action to ensure that the money allocated gets to the final recipients. I am referring here to the enterprises in crucial sectors such as agriculture, construction, machine-building and the defence industry. I am also talking about small businesses. In this situation it is important that each rouble be spent effectively and wisely.

We should not delude ourselves that the economic crisis is anywhere near over yet. We need to keep our wits about us throughout this period and pay close attention to the effectiveness of our work and the justification of our new plans and programmes. This applies to the state, business, and to each individual.

I am sure that we will manage to resolve all of these difficulties and will soon put in place a modern and independent financial system able to withstand any external challenges and ensure stable solutions to its own tasks.

What we need more than anything today is trust and cooperation. We must not delay the implementation of our strategic programmes not even for a day. In this situation we need to keep one step ahead. It is now that we need to lay the foundations that will enable our country to compete in areas where future benefits are to be gained. We need to work fast to occupy niches in the world economy that are still free. We need to build new and effective enterprises and spread the use of the most advanced technology. This is one of the best anti-crisis ‘medicines’ possible, and it is also an intrinsic part of the ideology on which our country’s modern development is based.

Our economic policies are based on the concept already declared of the four ‘I’s – institutions, investment, infrastructure and innovation. This concept has been cemented in the Government-approved development concept for the period through to 2020. We need to implement it in full. And we need to add a fifth I too – intellect.

Our priority is to produce (and eventually export) knowledge, new technology and advanced culture, cutting-edge achievements in science, education and the arts in other words. We must be at the cutting edge of innovation in the main economic sectors and in public life. Neither the state nor the business world can afford to skimp on these priorities, not even in a difficult financial situation.

Our policies are based on an ideology which has people at its centre, people as individuals and citizens, people who are guaranteed equal opportunities from birth. Their success in life depends on their personal initiative and independence, and on their abilities to innovate and create. This is more important now than ever before for our country.

I repeat that we simply must consolidate around our national priorities. The worst thing that could happen in the current situation is to descend into settling scores and dishonest competition, including through use of the administrative resources. I draw the attention of the civil servants, staff of the law enforcement agencies, and company officials to the fact that this kind of behaviour is unacceptable and immoral. It is easy to earn oneself a reputation today, but just as easy to lose it, and it will take a long time to restore one’s good name, if this is even possible at all.

Those who want to make some ‘easy’ political capital out of the global economic crisis, who have their hearts set on populist chatter and want to destabilise society in order to satisfy their personal ambitions, I advise them to read the Constitution. I consider it my duty to warn those who seek to provoke tension in the political situation. We will not allow anyone to inflame social and interethnic strife, deceive people and draw them into illegal action. We will continue to maintain Constitutional order through all the legal means.

I remind you that the Russian Constitution celebrates its fifteenth anniversary in December. What is important is not the date itself of course, but the fact that it is the Constitution that upholds freedom and justice, human dignity and welfare, protection of family and Fatherland, and the unity of our multiethnic people – not just as common values but as legal concepts. In other words, the Constitution gives them force in practice and supports them with all the resources of the state and with all of its own authority. The Constitution forms our social institutions and the way of life of millions of people.

It is for this reason that in my first Address to the Federal Assembly I feel it necessary to set out my vision of the fundamental laws governing our life, the goals and values of our society, cemented in the Constitution and thus having a direct influence on every aspect of our domestic and foreign policy.

I would like to give a brief analysis of how these goals and values have ensured the development of Russia’s statehood, and I want to say a few words in particular on the following points.

First is the decisive role the Constitution has played in developing democracy in Russia. As I said, the personal freedom and the maturity of the democratic institutions and procedures that it guarantees are the source for our continued development. Now, as we come to a new stage in our development, we are setting new goals that call for greater participation by our citizens, political parties and other public institutions. I will name these new goals.

Second is the Constitution’s importance in developing a new legal system and independent courts, and in combating corruption and legal nihilism. I note that legal nihilism is not a new phenomenon in Russia but is something that has its roots deep in our distant past. Fifteen years is too short a time to eradicate such deeply-rooted traditions. But it is also true that we have not yet made a deep-reaching systemic attempt to address this problem of disregard for the law.

Third is the role the Constitution plays in continued expansion of free enterprise and economic freedom. This is the key to successful development of a middle class, growth of small and medium businesses and the establishment of an innovation economy.

Fourth is the implementation of the social guarantees set out in the Constitution: wages, benefits, pensions and savings. I repeat that the state authorities will continue to fulfil their commitments to the public even in today’s difficult situation. I want to remind you too that the Constitution prohibits propaganda of social superiority. This is a moral law that also has legal force in our country.

Finally, fifth, the Constitution also plays its part in bolstering international law. International law, as we know, is made up of states’ observance of their national constitutions and their commitments under international agreements and treaties. Therefore, the better states coordinate their actions on the international stage with the provisions of international law, the greater the level of security in our world.

Colleagues,

The Constitution paves the way for Russia’s renewal as a free nation and a society that holds law and the dignity of each individual as its highest values.

The cult of the state and the illusory wisdom of the administrative apparatus have prevailed in Russia over many centuries. Individuals with their rights and freedoms, personal interests and problems, have been seen as at best a means and at worst an obstacle for strengthening the state’s might. This view endured throughout many centuries. I would like to quote Pyotr Stolypin, who said, “What we need to do first is create citizens, and once this has been achieved civic spirit will prevail of its own accord in Russia. First comes the citizen and then the civic spirit, but we have usually preached the other way round”.

This is why the adoption in 1993 of a Constitution proclaiming the individual, their life, rights and property as the highest value was an unprecedented event in Russia’s history, and we should thank all those who took part in drafting and adopting this document. Some of them are present here today.

Today, at a new stage in its development, Russian society affirms its commitment to the Constitution’s democratic values. It has for the most part become familiar with the practice and procedures of democracy. Not so long ago, democracy was associated in our people’s minds with chaos, helplessness and degradation, but the new Russia has proven its ability to fulfil its social commitments and ensure economic growth, guarantee our people’s rights and demand compliance with the law, and successfully combat terrorism and outside aggression.

Not so long ago, 15 years ago, people were still asking themselves whether or not democracy was the road forward for Russia. Today the answer is clear, democracy is the way forward, and no one disputes this now. The question today is how Russia’s democracy should continue its development.

I think that Russia’s people are much readier now for free activity (professional, public and political) than they were at the start of reforms. They have no need for the state to look after their every step. More and more people rely on themselves above all and believe that their personal success – and thus the country’s success too – depends on themselves and their personal achievements. This means it is absolutely essential and also possible to increase the level of trust in society.

But as was the case 20 years ago, the bureaucracy still does not trust free citizens and free activity. This logic pushes it into dangerous conclusions and acts. The bureaucracy from time to time casts fear over the business world, pressuring it to keep in line and not to take what they consider wrong action, takes control of this or that media outlet, trying to stop it from saying what they consider the wrong thing, meddles in the electoral process, preventing the election of what they consider the wrong person, and puts pressure on the courts, stopping them from handing down what they consider the wrong verdict.

The result is that the state bureaucracy is the biggest employer, most active publisher, best producer, and is its own court, own political party, and ultimately its own people. This is a completely ineffective system and leads only to corruption. It gives rise to legal nihilism on a mass scale, goes counter to the Constitution, and hinders the development of innovative economic and democratic institutions.

A strong state and an all-powerful bureaucracy are not one and the same thing. Civil society needs a strong state as a tool for development and maintaining order, and for protecting and strengthening democratic institutions. But an all-powerful bureaucracy is a mortal danger for civil society. This is why our society must continue calm and steady work to build up its democratic institutions and not delay this work.

The democratic institutions established over these years (established by decree from above, it must be said) need to develop roots in all groups in society. For this to happen, we need to constantly prove that the democratic system is the one that works. We also need to entrust a growing number of social and political responsibilities directly to our citizens, their organisations and local self-government. Of course the state will retain the responsibilities that fall within its jurisdiction, and action must be pragmatic and accompanied by a sober assessment of the risks, but action is necessary.

Above all therefore, I propose taking measures to improve the level and quality of public representation in government, measures that will encourage the public to become more involved in political life. More than 90 percent of voters voted for the parties that entered the State Duma in 2007. But there were almost five million people who voted for parties that did not make it into the State Duma. These people have no representation at federal level, though they showed their civic activeness and went to vote in the election. This is an unfair situation and something must be done about it. I do not think, however, that it is necessary at this point to lower the barrier set by law for entry to the State Duma.

My first proposal is therefore to give guarantees for voters who vote for the so-called small parties. I think that parties that have received from 5–7 percent of the vote could be given a guaranteed one or two seats in the State Duma. This would make it possible to keep in place the system of incentives for consolidation of the big parties, something we have been working on these last years, the parties that form the main frame of our national political system. And at the same time, it would ensure a parliamentary tribune for the small parties that represent the interests of a sizeable number of people.

Second, I think it possible that nominations of heads of the executive authorities in the regions could be made only by the parties that have won the biggest number of votes in the regional elections, and by no one else. This would mean that only public, open political organisations representing the bulk of the country’s population would have the right to put forward candidacies for these posts.

Third, the practice of having to provide a sum of money as collateral should be abolished for elections at every level. It is not money that should decide participation in elections but people’s opinions, the party’s reputation and voters’ confidence in its programme.

We should also discuss gradual reduction of the number of voters’ signatures that need to be collected for participation in elections to the State Duma. Parties that receive more than five percent of the vote in the next election to the State Duma or that have a faction in more than a third of the regional parliaments should be exempted altogether from collecting signatures. Currently, only parties that have a faction in the State Duma are exempt from this requirement.

Fourth, the Federation Council should be made up only of people elected to the representative assemblies and deputies from the local self-government bodies of the region in question. The residence requirement that requires members of the Federation Council to have lived for a particular number of years in the region should be abolished. In this way, people who have gone through a procedure of public election, have experience of working with voters and represent not only the regional authorities but most importantly represent the region’s people will work in the Federation Council.

The necessary changes should be carried out without upheavals and big shuffles of personnel, allowing a transition period and measures to preserve the Federation Council’s human resource potential.

Fifth, there should be gradual reduction of the minimum number of members required for registering a new political party.

Sixth, amendments should be made to law on political parties making it compulsory to carry out rotation of the party’s leadership so that one and the same person cannot occupy a leadership post in the party for longer than a set term.

Seventh, the representative bodies of local self-government should be able to have more effective control over and, if necessary, even remove from office the heads of municipalities. It is long since time to address the issue of making municipal heads more responsible for the quality and results of their work.

Giving the local government representative bodies these kinds of important powers also implies greater quality demands on their own work. They should be elected with the most active participation of local people’s political and non-political groups – human rights groups, volunteer organizations, philanthropic and educational organizations and so on. I remind you that the law allows for not only political parties but also public organizations to put forward electoral lists for municipal elections. But most parties and public organizations are still poorly represented on municipal councils. This provision in the law should be made to work effectively.

Eighth, I ask you to take additional measures to encourage non-governmental organisations and the Public Council to become more involved in the legislative process. I think it would be useful to have these groups take compulsory part in examining draft laws that affect the most important issues for our people: people’s freedoms, healthcare issues, property issues. This would require amendments to be made accordingly to the rules and regulations of the State Duma and the Federation Council.

Ninth, parliamentary parties should have clear guarantees that their work will be covered by the state media.

Tenth, freedom of speech should be backed up by technological innovation. Experience shows that it is practically of no use to persuade the bureaucrats to ‘leave the media in peace’. Instead of persuading, we should work more actively to expand the free internet and digital television space. No bureaucrat can obstruct discussion on the internet or censor thousands of channels at once.

I am sure that these measures will help to raise the quality of public representation and make it possible to take public interests into account better. It will give people greater trust in government and increase solidarity within society.

Citizens of Russia, friends,

I have just set out concrete steps to take to develop civil society and a democratic state. These steps are dictated by our desire to see Russia become an advanced and progressive country in the nearest future, a country that offers people a comfortable life, and is a prosperous community of free people based on fair laws. These are priority tasks and we must act without delay. There can be no doubt that we will work together to continue this process of democratic transformation.

We have a lot of work and serious steps ahead. This includes continued decentralisation and humanisation of the social organisation and political system. The freer and more diverse our public life, the more dynamic our economy and the more intense our political competition, the more solid and stable will be the fundamental institutions of our democracy, the pillars that hold up the whole edifice of the democratic state.

I think many will agree with me that the Russian political culture and our public opinion give this role primarily to the President and the federal parliament as the two main institutions of state power at the highest level, and the two institutions distinguished by the fact that they are elected through national popular ballot and act on behalf of the entire country.

I am sure that our movement towards freedom and democracy will be successful and sustained only if the President and State Duma can maintain a high level of authority founded not only on election campaign promises but also on the practical results of their work, and if they have enough time to put their promises into practice and really demonstrate the results of their work to the people, give an account of their performance to the voters and the country.

Today we are carrying out long-term development programmes and are in the process of making a transition to a new type of economy. We find ourselves at the same time having to address a whole host of difficult issues: overcome the global crisis and the difficulties of competition, modernise our armed forces and manage a huge and complex ethnically and culturally mixed country, and in these conditions strengthen our democratic institutions and maintain stability. This is not all we have before us, but these are the most important reasons motivating me to make two proposals.

First, we need to give the Federal Assembly greater constitutional powers. The State Duma should be given responsibility for carrying control functions (Article 103) with regard to the executive authorities, and there should be a constitutional provision requiring the Cabinet to report annually to the State Duma on the results of its work and answer questions put directly by the parliament.

Second, we should increase the constitutional mandates of the President and State Duma to six and five years respectively.

These issues have been raised repeatedly since the 1990s. Discussions on these subjects have gone on for a long time. Many have made reference to history, which abounds with examples of democratic countries changing the terms and mandates of their state bodies.

I will not list all of these examples. These cases are well known. What I want to say is that we are not talking about constitutional reform but about adjustments to the Constitution, about adjustments that are important but are nonetheless no more than clarifications and do not change the political and legal essence of the current institutions. These adjustments provide rather an additional resource for the institutions’ stable work. There is no place for a ‘reforming itch’ with regard to the Constitution. The Constitution is effective, it works, and its basic provisions should remain unchanged for many years to come. Civic rights and freedoms, the nation’s sovereignty, the state system and federal organisation, the organisation principles of the judicial system and local self-government, and the other foundations of our constitutional order have been set for a long-term historical period. As the guarantor of the Constitution, I will preserve and protect these fundamental provisions.

Colleagues,

Corruption is the greatest enemy of a free and democratic society. You know that the National Anti-Corruption Plan was signed in July and that I have submitted a corresponding package of draft laws to the State Duma. Their main feature is that they take a comprehensive, systemic and targeted approach. They are designed above all to eradicate the causes of corruption, which has its roots in the shortcomings in our government and economic mechanisms.

Amendments are now being made to the laws regulating the activities of customs officers, Interior Ministry personnel, the staff of the Prosecutor-General’s Office, Federal Security Service, magistrates and court staff, the civil service, municipal staff and others. It is very important that anti-corruption effort focus on prevention measures and on making it not advantageous to practice corruption.

What are the measures proposed?

First, we need to seriously increase the demands on state and municipal officials. By this, I mean requiring them to provide additional information on their incomes and assets, including assets belonging to family members. The truthfulness of these declarations will be carefully verified, even through investigative detective work if necessary.

Second, state and municipal officials should be required to behave in accordance with their codes of ethics. Failure to comply with these rules should result in disciplinary action and, where necessary, in administrative and criminal liability.

Third, measures are being introduced for criminal penalty of abuse of power by people carrying out management functions in non-state organisations. These penalties will correspond to those applied to civil servants.

Fourth, legal entities will be subject to administrative liability for making a bribe on behalf of or in the interests of a legal entity. There are also a whole series of other measures that are well known now.

Furthermore, control will be established over the assets situation of people with special legal status, above all judges.

These measures are strict, but they are necessary. As Nikolai Korkunov, a pre-revolutionary specialist in state law rightly noted, “Affirming the law always comes across as an attack on the arbitrariness of those in power”. Our preferences here are obvious.

I think that by creating the legal basis for our anti-corruption efforts we will lay a good foundation for this work. This will enable us to build our work in a systemic and consistent fashion and take additional measures should the need arise. I hope that this package of laws will be adopted very soon and successfully put into practice.

Of course, aside from legislative measures we also need to improve the way our state bodies work and optimise and clarify their powers. We need to ensure competition and objectivity when holding tenders and concluding state or municipal contracts. We need to remove unjustified restrictions and prohibitions in economic activity and establish conditions for effective targeted support for people in the social sphere.

Now I would like to say a few words about developing the judicial system. We know that an independent and honest court is the basis for a just public order. As our democratic state grows stronger, the courts will begin to play an even greater role.

The problems of creating a judicial system have in large measure been resolved. This includes expanding the jurisdiction of the courts in dealing with complaints against state bodies and officials, as well as offering compensation for damage done by their illegal actions.

In the near future other innovations will be introduced. For example, I have asked that a report be prepared on the possibility of transferring problems concerning the activities of magistrates to the federal level. This would require certain expenditures but the resolution of such problems would complete the formation of a coherent judicial hierarchy.
I am also introducing a bill to reduce the duration of civil cases and to introduce penalties for the creation of obstacles designed to drag out court proceedings excessively.
In addition, it is necessary to establish a mechanism for addressing the damage caused by violations of citizens’ rights to trial within a reasonable time, and to guarantee the full and timely implementation of court decisions.

Finally, in the near future we will adopt a law “On Ensuring Access to Information Concerning the Activities of Courts in the Russian Federation“. It will apply to all the courts and give people the opportunity to obtain reliable information about the functioning of the judicial system. In addition, for the first time it will provide a detailed account of various forms of disclosure, including via the internet.

Such changes will clarify and explain judicial rules and procedures for citizens. And in the final analysis it will help strengthen the national mechanism for application of the European Convention on Human Rights and Fundamental Freedoms. In doing so, we need to make a number of important decisions. Above all, it is crucial that there be a strict enforcement of judgments. This is an important part of citizens' rights to a fair trial.

I want to stress that the execution of court decisions is still a huge problem. And this is the problem of all courts, including the Constitutional Court. Of course problems vary but they do have one thing in common: a lack of real accountability on the part of officials together with citizens themselves who neglect to execute court decisions. This responsibility should be assumed.

We must not forget about such a fundamental issue as humanizing the law and the ways it is applied. The courts should be more careful when choosing to bring accused in custody and punish the convicted by excluding them from society. At the same time, law enforcement agencies and the judicial system must ensure the effective protection of the rights and interests of victims of crimes.

As everybody knows, the law must be seen as more than just the product of pragmatic measures but also as “the condition of genuinely human existence”, as the famous Russian lawyer Boris Chicherin once put it. And I think that the discussion at the 7th Congress of Judges of all the above innovations and the existing problems will give judicial reform in this country an important new impetus.

The introduction of local self-government institutions and strengthening the federal basis of the state has been of fundamental importance for our society. As you know, government policies in these matters are largely arrived at by trial and error, based on the experience of other states and the ways older forms of federalism have developed in the world. Yet Russia is the most multi-regional, multi-national and multi-confessional nation in the world. For this reason what we have undertaken today is being undertaken for the very first time.

Let me remind you that on 1 January 2009 the transition period established for the implementation of all the provisions of the federal law ”On General Principles of Local Self-Government in the Russian Federation“ ends. But we will continue to improve this legislation.

I must say that that in two regions of the Russian Federation – the Chechen Republic and Ingushetia – there is no local self-government. That is, citizens of these republics are being unjustly deprived of their constitutional rights. I know that the leadership of these regions is planning a form of local self-government by October next year, and I encourage them in this endeavour.

Now a few words on the further development of Russian federalism. Its modern form was established on the basis of the Constitution. The Constitutional Court played a special role in its formation. In its decisions it has had to find a balance between the interests of different levels of government, and settle some quite sharp disagreements. This applies to disputes between the federal and regional authorities, and disputes about the various ways of creating a local government. And we are still confronted with these problems today.

What is especially important for us today?

The first thing is to achieve an optimal balance of power between the Federation and the regions. As you know, we have done a good job, a great job on this. But we are still attempting to clarify the parameters of this division every year. These include making changes to the lists of resources needed at both federal and regional levels in order to completely fulfill the government’s responsibilities. I think that we should come back to this issue and finally decide what assets and how much of them the regions need.

Second: thus far we have not come up with the optimal placement scheme for the territorial structures of federal executive bodies in Russia. There are so many of them that we need to cut back. And we also need a plan for their effective cooperation with regional authorities. Let me remind you that in accordance with Paragraph 2 of Article 77 of the Constitution, federal executive authorities and the executive bodies of the Federation’s Regions are part of an integrated system.

However, this article of the Constitution has not yet been implemented in full. The Government Cabinet should re-examine the issue and submit the necessary proposals, including based on criteria for evaluating the activities of the federal executive authorities and that of the relevant regional bodies.

Third: legal authorities in the regions of the Russian Federation have submitted many initiatives to the State Duma but very few of them are adopted as laws. This is due to insufficient elaboration of these initiatives and the large number of alternative bills in the Duma. In general there is little awareness in the regions of the legislative process at the federal level. I think that the Federation Council could play a much larger role than it does now, as coordinator of the legislative activity on the part of the regional representative bodies. Please submit such proposals, taking into account what I have proposed about its new staffing regime.

Finally, another factor that could greatly enhance our Federation is the support of ethnic traditions and cultures of the peoples of Russia. I think this is crucial not only for strengthening the federal framework but also for ensuring the harmonious functioning of our society and the unity of the Russian nation. It will help guarantee a stable, civilised development of the entire country.

I have already said that interethnic peace is one of our key values. Historically we have enjoyed a unique and extraordinarily rich experience of tolerance and mutual respect. At the same time, problems remain that could exacerbate ethnic and sectarian relations. They include unemployment (particularly in regions with large working populations), flaws in legislation on property, illegal immigration and a number of other reasons. Such questions are particularly sensitive where certain social and economic issues are still unresolved. Where regional and local authorities are not helping the development of small businesses no new jobs are being created.

I want to draw special attention to the necessity of optimising the possibilities for migration within the country and creating real conditions for the increased mobility of Russian citizens as an effective way of redistributing labor resources and ensuring citizens’ right to work.

The mechanisms regulating international migration need to be improved as well. They must finally take on a legal form that meets the needs of our country and the scale of the migration involved. In Russia a flood of immigrants continues to arrive, particularly from the Commonwealth. We know that many of them hope to obtain Russian citizenship. In general, this is a positive process. But citizenship must constitute proof of their successful integration into our society and an acceptance of our culture and traditions. I should also note that we must first establish a balance in the labour market and ensure the interests of Russian citizens.

Dear deputies and members of the Federation Council!

No matter how perfect the laws and the policies are that we derive from the Constitution, the realisation of what they stand for depends on actual people. Their intellectual energy and creative force are the main wealth of the nation and a basic resource for progressive development.

We need to organise a large-scale and systematic search for talent both in Russia and abroad. We must do some headhunting. This will increase the number of talented young people in basic and applied sciences. It will speed up the formation of strong public and private centres concerned with the development of new technologies. It will be of great help to small and medium businesses as they create innovative enterprises. I should stress that these are problems for all of us, not only for some new state corporations. This is a challenge for all of our society and, at the same time, a chance for everyone to use their abilities.

Today’s Russia and its innovative future economy, its public service, management system and its social services all need a new regime for creating a human resources pool, one that would bring into government, municipal administration and business the most talented, qualified and creative people. As you know, I have taken measures to create such a reserve pool.

Therefore I have instructed the Government Cabinet and the Presidential Executive Office to launch a programme for the formation and training of reserve managerial personnel, developed jointly by state authorities, local government institutions and public organisations, and to do so before the end of the year.

This management reserve pool should include three levels: municipal, regional and federal. And the most successful managers should become part of a group to be called the presidential thousand. I think that the whole country should know who the best managers are. Therefore, information about the most capable specialists in various fields should be available in a Russia-wide data base.

I believe that the Russian education system should play a decisive role in shaping a new generation of professionals. Its previous successes were once recognised around the world. Today, despite some positive developments, the situation in education leaves much to be desired. Let us be frank: we were once in the vanguard and have now fallen behind. This has become a very serious threat to our competitiveness.

In addition, the educational system in the proper sense of that word shapes the identity of a person, creates an image of the life of the people. It passes on the values of the nation to new generations.

The development strategy for Russian education as a whole will soon be approved by the Cabinet. Its implementation will continue as part of the national project Education, based on recently adopted legislation. Today, I will focus on the education received in primary- and secondary-level school. This represents one of the longest and most important stages in the life of every human being. It is crucial both for individual success and for the long-term development of the country.

Just recently we discussed this with the professional community and formulated basic parameters to modernise our schools. The main result of this should be a series of goals for school education that will facilitate its rapid development. On the basis of these proposals we will prepare a national education strategy, an initiative called Our New School. It will be divided into five areas.

First: already in school children should be able to discover their talents and prepare for life in a high-tech, competitive world. Education's new content should help them meet this challenge. I suggest that we should develop precisely this kind of new generation of educational standards as rapidly as possible. Their preparation has been delayed.
Second: along with the implementation of a new standard for general education we should construct a far-reaching system for finding and supporting talented children and monitoring them throughout the entire period during which their identity develops.

Third: the teacher plays a key role in the school. And we need to develop a system of moral and material incentives for keeping the best teachers in our schools and constantly improving their skills. But more importantly we need to staff our schools with a new generation of teachers. And not necessarily those having pedagogical education.

I support the proposal of the educational community to declare 2010 the Year of the Teacher in Russia. And I would like to emphasise that we will do everything we can to make teachers respected figures in society. But teachers themselves should be attentive to the students and respect them. This should help the students become independent, creative and self-confident people.

Fourth: the image of our schools, both the way they present themselves and what actually happens inside them, must change significantly. A school can only have a real impact if it is exciting and interesting, if it becomes the centre of not only compulsory education but also of self-development, creativity and sport.

Let me draw your attention to the fact that Russia’s schools do not have the right to fall behind, in the literal and figurative sense of the expression. There is a need for not only new educational standards but new standards for constructing school buildings and classrooms, equipped with clinics, cafeterias and gymnasiums. Children should feel comfortable in their schools, both psychologically and physically.

I am instructing the Cabinet to develop in the nearest future new principles for our schools, including for their design, construction, and equipment and technical resources. It is necessary to make full use of the results obtained in the Education national project.

Fifth: it is precisely during the time spent at school that one’s well-being is determined for the rest of one’s life. Today's statistics on the health of schoolchildren are simply appalling. Yes, I’ll admit that a lot of this depends on the living conditions of the family, on the parents. But to keep insisting on this as the only reason is unacceptable. The time children spend in school represents a significant portion of the day, and so their teachers are implicated in their students’ well-being too. We need to get away from a homogenizing approach to this matter. Each student should be treated as an individual and the risks to their well-being should be minimized throughout the learning process. All the more so because an overloaded curriculum also creates other problems.

I am convinced that if the importance of a healthy lifestyle was fully instilled in our students at school, we would have a much easier time dealing with the creation of a modern health care system.

The relevant government programme should be adopted as early as this year. It should focus on mechanisms to ensure the accountability of doctors and medical organisations for quality and performance. They will expand their opportunities and will be motivated to meet the highest standards.

A few words about compulsory health insurance. We have to admit that it never has been effective in Russia. The rights of insured persons have not been fully achieved. Despite legislation improving the possibilities for choosing among insurance organisations, medical institutions and even doctors, in real life, the choice is virtually non-existent. And with the growth of paid medical services voluntary medical insurance has been slow to develop. All this does not contribute to the development of competition in health care.

We must gradually but consistently implement full-value health insurance. This applies both to its scope and cost. The state must ensure financial equilibrium in the health insurance system. I draw your attention to the fact that we must work on health care issues not for the sake of the industry, but to increase life expectancy and birth rate.
Of course we should not forget about the older generations. People in those generations, people of retirement age are entitled to a decent life. Therefore the pension system can no longer rely on an abstract measure to determine the average pension. Everyone must be absolutely clear about how he or she can achieve a certain standard of living in retirement. Clear about how much the state will provide, how much they will receive from mandatory contributions, from their employer, as well as how much people themselves should save.

Major policy decisions on these issues have already been made, including with respect to increasing the pensions for those who earned part of their pension during the Soviet period. We have also decided to raise tariffs on pension insurance to European standards. For employers this represents an additional financial burden and already this year the Cabinet will determine how to compensate businesses for this.

And finally, we are beginning to implement the approved programme that provides that the state will co-finance voluntary pension savings of Russian citizens. So far already about 100,000 people have filed applications to participate in this programme in just five weeks.

I think that it is these areas, critical areas such as education, health care and pensions where people need to see clearly why economic growth is necessary, feel its benefits and see how they are distributed.

Dear Colleagues!

I have already mentioned the tragic events in South Ossetia. They were largely determined by serious infringements of international law. Refusing a peaceful, political settlement and legal methods, Georgian leadership chose to embark on the most frightful scenario.

I will stress once again: the decision to force the aggressor to make peace and the operation undertaken by our military was not against Georgia, not against the Georgian people, but to save the people of the republic and Russian peacekeepers. To ensure the stable and long-term security of the people of South Ossetia and Abkhazia. First and foremost from the potential relapse into criminal adventurism by the regime in Tbilisi.

The Caucasus crisis has demonstrated once again that the use of force by one of the parties to a conflict cannot result in a viable solution. In this regard, from the starting point of international law we will continue to contribute to eliminating potential flashpoints for conflicts in neighbouring regions. And by respecting existing forums we will promote a settlement in Nagorno-Karabakh and Transdniestria. We will cooperate with all interested parties and reach a mutually acceptable agreement.
I would like to draw some conclusions that go beyond the conflict itself.

The first and main conclusion. In practice a qualitatively new geopolitical situation has been created. The August crisis simply forced a so-called moment of truth upon us. We really proved – including to those who sponsored the current regime in Georgia – that we are able to protect our citizens. That we are able to effectively defend our national interests and effectively carry out our peacekeeping responsibilities.

The second conclusion. Our Armed Forces have been restored to combat potential to a considerable degree. Nevertheless, military leaders need to examine not only our successes but also our mistakes. And to draw the most serious lessons from these. Regarding the re-equipment of the army and navy with new, modern equipment, I have already taken the relevant decisions and given orders to the cabinet. I have approved the design of our Armed Forces new image.

I would add something about what we have had to face in recent years: what is it? It is the construction of a global missile defence system, the installation of military bases around Russia, the unbridled expansion of NATO and other similar ‘presents’ for Russia – we therefore have every reason to believe that they are simply testing our strength.
Of course we will not let ourselves be dragged into an arms race. But we must take this into account in defence expenditures. And we will continue to reliably protect the safety of the citizens of Russia. Therefore I will now announce some of the measures that will be taken. In particular measures to effectively counter the persistent and consistent attempts of the current American administration to install new elements of a global missile defence system in Europe. For example, we had planned to decommission three missile regiments of a missile division deployed in Kozelsk from combat readiness and to disband the division by 2010. I have decided to abstain from these plans. Nothing will disband. Moreover, we will deploy the Iskander missile system in the Kaliningrad Region to be able, if necessary, to neutralise the missile defence system. Naturally, we envisage using the resources of the Russian Navy for these purposes as well. And finally, electronic jamming of the new installations of the U.S. missile defence system will be carried out from the territory of the same westernmost region, that is from Kaliningrad.

I want to emphasise that we have been forced to take these measures. We have repeatedly told our partners that we want to engage in positive cooperation. We want to act against common threats and to work together. But unfortunately, very unfortunately, they did not want to listen to us.

The third thing. We have begun integration within the Union State and the EurAsEC. We will increase the volume and scope of our cooperation in the military and political spheres in the CSTO. And we already had a productive conversation on this topic at a summit in Moscow.

Fourth. The reaction to the events of August 8th and Russia’s recognition of the independence of South Ossetia and Abkhazia once again showed that we live in a world of double standards. We proceeded responsibly and did so in the interests of restoring international law and justice. We did so aware that any hesitation or attempt to postpone these steps would result in an even greater humanitarian catastrophe. In light of this the position of our partners, who recently made every effort to circumvent international law to achieve the secession of Kosovo from Serbia and recognise the self-proclaimed country as a subject of international law, seems obviously biased, for they now criticize Russia as if nothing had happened.

Fifth. The development of the international situation in recent years has been characterised by a number of negative trends. Responses to new threats can be made only through collective efforts. That is why we favour a carefully planned reform of the United Nations to bolster its central role and the effectiveness of its structures and mechanisms.
Based on this we need to take steps to develop an international arms control regime. And progress in US-Russian cooperation would play a key role in this respect. It's no secret that many states, simply due to inertia, look at which way the wind is blowing in relations between Russia and the United States. Yes, today these relations are not the best. And many questions are being raised in Russia, including moral ones. But I would stress that we have no issue with the American people, we do not have inherent anti-Americanism. And we hope that our partners, the new administration of the United States of America, will make a choice in favour of full-fledged relations with Russia.

I would note that the issue of establishing a new global security regime is grossly overdue. And it is especially important that we achieve results in the North Atlantic territory that comprises Russia, the European Union and the United States. I took the initiative to draft a relevant treaty — a treaty on European security. I repeat: such a document would create absolutely clear and comprehensible rules of conduct. It would formalize a unified approach to conflict resolution. It would facilitate a harmonious position on creating reliable instruments of arms control.

Incidentally, the settlement of the South Ossetia crisis demonstrated that it’s possible to find solutions with Europe. We will deepen our relations with Europe in the field of security. I am sure that they have a good future.

Where do I think we should engage in practical work?

First, we need to continue strengthening the legal foundations of international relations. Universally recognised norms and principles of international law should determine the rules of the game in international affairs. And as all countries cultivate habits that correspond with international law this will help reduce the role of hard power and facilitate the adoption of a collective course of action. Otherwise we will face international chaos and the practical impossibility of maintaining the preeminence of international law.

Secondly, the creation of a polycentric international system is more relevant than ever. This cannot be done without a range of measures including the reform of major international institutions and the general strengthening of multilateral diplomacy. Together with all interested parties, we will create a truly democratic model of international relations, not allowing any one country to dominate in any sphere.

In general arrogance and arguments based on power are no longer as compelling or as effective as before. The world cannot be run from one capital. Those who refuse to understand this will only create new problems for themselves and others. And the relevance of strengthening international institutions is heightened by the transition of most countries towards a truly pragmatic multifaceted policy. We consider Russia's participation in forums such as the G8, the Shanghai Cooperation Organisation, BRIC, the Asia-Pacific Economic Cooperation forum and others in light of this.

The third task is creating universal diplomatic methods for resolving crisis situations. I already talked about this in connection with the lessons from Tskhinvali. I'll add that in order to achieve positive results ‘problematic’ States – wherever they are – must not be isolated but rather involved in dialogue. And we are ready to contribute to resolving any regional conflicts that occur.

Fourth. We need to engage in continuous dialogue with our partners to form the new rules of global financial architecture as rapidly as possible. Having a monopoly in this sphere was not merely inadequate for the realities of today's global economy, it was also dangerous for all concerned. And therefore a new financial architecture should protect the interests of all of its participants. And we must not allow it to be instrumentalised by any one country or group of countries, or one economic system that will make others pay for its gross errors.

As you know, the G20 decided to meet in Washington on November 15. We prepared our suggestions on the basic principles for creating a new economic architecture and sent them to our partners. We believe that global financial institutions must be able to actually prevent crises and minimise their impact on the rest of the world. In whatever country they originate in and whatever market they concern, be it financial, energy or food.

The minimum set of objectives includes developing a new risk assessment system which takes into account the interdependence of financial institutions and the real economy, introducing modern technology for disclosing objective information on market participants and their operations, harmonising accounting standards, and increased capital requirements for financial institutions.

Mandates for these tasks should be distributed among existing or newly formed international organisations and regional ones as well. And the world’s leading countries must guarantee their effectiveness. When developing such architecture we should not forget the famous words of economist Vasily Leontyev who said that the system of free enterprise is comparable to a giant computer that is able to solve its problems itself. But anyone who has dealt with such computers knows that sometimes they fail and cannot function without supervision.

Fifth. Already before the end of this year we must adopt a package of laws that creates a foundation for turning Russia into one of the world's leading financial centers. And such a centre should act as the nucleus of an independent and competitive Russian financial system.

We need to take practical steps to boost the rouble’s role as one of the currencies involved in international payments. And finally we need to move over to settlements in roubles – that we have unfortunately delayed – for raw materials exports, and above all oil and gas exports. We must encourage issuing new securities in roubles and preferably in the Russian market. The ultimate goal of all these processes is to make the rouble a regional currency.

I think that such actions will be taken by other fast growing countries as well. But the more powerful financial centres there are in the world and the greater our interdependence, the safer and more sustainable global development will be.

And another, the sixth task concerns renewing our activities in external economic policy. Keeping to ourselves amounts to a dead-end. We will continue the process of integration into the global economy. But we will also need to learn how to combine existing and future competitive advantages in a flexible way. And how to effectively protect our economic interests while attracting external resources.

We need to actively promote our companies to maximise the benefits of the openness of the Russian economy and the current market situation, despite its pitfalls. To help them improve their efficiency and enter new markets for goods, technology, and labour. Our competitors are not shy about doing so and yet we often sit idly by. And time is passing and with it, of course, money. What are we waiting for? We have development institutes. We have resources. And we must create a smooth mechanism of support.
It is also important to build diversified relations with the members of the Eurasian Economic Community and other CIS countries, the EU, China, India and other big Asian partners. And I would also note the opportunities opening up in Latin America and Africa where interest in cooperation is also evident.

And finally, we are ready for mutually beneficial cooperation with all countries and groups committed to developing constructive relations. We do not believe that the existence of differences on certain issues should prevent us from engaging in frank discussions to solve the most complex problems. Along with this, any interaction will be extremely pragmatic, taking into account the real impact for our country, for all Russian citizens. And geography is not important in such cooperation. What is important is a positive spirit and mutual interest.

Dear Colleagues!

The goals, values and mechanisms outlined in the Constitution have proven viable. They have helped our society overcome certain difficulties and embark on sustainable development. And we will continue to use the potential of this Fundamental Law as much as possible.

The main thing is to do everything necessary to help people express themselves. And especially to open doors for capable and active young people. They are the coevals of the new, democratic Russia. They represent its openness, its freedoms and its desire to be the best. And they will also bear the responsibility for the preservation of our fundamental values.

The free development of individuals and their social protection will always be the priorities of public policy. This will be our main concern. It will be our society’s development goal.

Dear friends! We live in a free and modern country. And we have managed to do much. We have a positive experience in establishing a democratic state. And more than success, we have real victories. And together we are moving forward to find answers to difficult questions. To succeed again. And to win again.

Thank you.