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Putin Speaks His Mind

According to Vladimir Putin, what is in store for Russia's economic future?

May 31, 2003

According to Vladimir Putin, what is in store for Russia's economic future?

Over the last years, Russia's economy has improved — but the country has not achieved stability yet. In this Globalist Document, based on Russian President Vladimir Putin's annual speech to the Federal Assembly, he points to the challenges ahead — and has one particular group in mind which could help turn things around.

We must focus all our decisions and all our action on ensuring that in a not too far off future, Russia will take its recognized place among the ranks of the truly strong, economically advanced and influential nations.

We could not take up this challenge earlier because we faced a great number of more urgent problems that we had to tackle first. But now we have this new opportunity in our hands and we must use it.

But if we are to achieve this objective, we must mobilize our intellectual forces and unite the efforts of the state authorities, civil society — and all the people of this land.

Why do I think this of such vital importance? Our entire historical experience shows that a country like Russia can live and develop within its existing borders only if it is a strong nation.

All of the periods during which Russia has been weakened — whether politically or economically — have always and inexorably brought to the fore the threat of the country's collapse.

Certain of our achievements over these last years make it possible to speak of stabilization.

Some people even have the impression that all our problems have now been solved — that Russia now has a perfectly bright and predictable future ahead of it.

And that everything now is just a question of whether the economy should grow by four or by six percent a year — and of how much we should spend.

I would like to say that this is not the case. We face serious threats. Our economic foundation has become more solid — but it is still not stable enough and still very weak.

Our political system remains insufficiently developed and our state apparatus is not very effective. Most sectors of our economy are not competitive.

Meanwhile, our population continues to fall and the fight against poverty is progressing far too slowly. The international situation remains complicated and competition in the world economy is as intense as ever.

All around us are countries with highly developed economies. We need to face the fact that these countries push Russia out of promising world markets when they have the chance. And their obvious economic advantages serve as fuel for their growing geopolitical ambitions.

The proliferation of nuclear weapons continues in our world today. Terrorism threatens the world and endangers the security of our citizens.

Certain countries sometimes use their strong and well-armed national armies to increase their zones of strategic influence rather than fighting these evils we all face.

Can Russia have any real hope of standing up to these threats if our society is splintered into little groups and if we all busy ourselves only with the narrow interests of our particular group?

And if instead of becoming a thing of the past parasitic moods are only growing?

And what is helping feed these moods but a bureaucracy that, instead of trying to look after and build up our national wealth, often happily lets it get frittered away.

It is my conviction that without consolidation at the least around basic national values and objectives, we will not be able to withstand these threats.

I would like to recall that throughout our history Russia and its people have accomplished and continue to accomplish a truly historical feat: A great work performed in the name of our country's integrity — and in the name of bringing it peace and a stable life.

Maintaining a state spread over such a vast territory and preserving a unique community of peoples while keeping up a strong presence on the international stage is not just an immense labor.

It is also a task that has cost our people untold victims and sacrifice.

Such has been Russia's historic fate over these thousand and more years. Such has been the way Russia has continuously emerged as a strong nation.

It is our duty never to forget this. We should remember it now, too, as we examine the threats we face today and the main challenges to which we must rise.

The results we have achieved through our common efforts over these last three years show that we can rise to these challenges.

Three years ago, we identified the biggest threats to Russia as being demographic decline, economic weakness and a state that did not function effectively.

Have we made headway with solving these problems? Yes and no. We have had some successes, but there have also been some serious failures. Let us take an honest look at this today.

One of the most serious threats we identified was the decrease in the Russian population due above all to a falling birth rate and rising mortality rate.

The mortality rate has continued to rise over recent years. It has increased by 10 percent over the last three years. Life expectancy, meanwhile, has continued to fall.

Statistics paint the unhappy truth, showing us that life expectancy fell from 67 years in 1999 to 64 years in 2002.

The reasons for this low life expectancy include high levels of illness and deaths from accidents, poisoning and injuries. The spread of new epidemics including drug addiction and AIDS is only making the situation worse.

On the positive side, the birth rate rose by 18 percent over the last three years, while infant mortality decreased by 21 percent and is now lower than at any other time in our history.

Another of the serious issues that was named three years ago was the increasing globalization of the economy and of public international life in general in the modern world.

No country today — no matter how big and how wealthy — can develop successfully in isolation from the rest of the world.

On the contrary, the biggest success comes to those countries that consciously use their energy and intelligence to integrate themselves into the world economy.

I would like to note that our credit rating today is the highest it has been so far in new Russian history. A number of Russian companies have now joined the ranks of major European and world corporations.

Some of these companies have, for the first time in the last 90 years, begun serious expansion into world markets, becoming visible players on the international economic stage and real rivals for foreign firms.

For the first time in the last fifty years, Russia went from importing grain to exporting it. Since 1999, exports of Russian foodstuffs have tripled.

Exports of oil, petroleum products and gas rose by 18 percent, and Russia today is one of the world's biggest energy exporters.

This growing economic potential has brought improvements to the lives of tens of millions of people. Thanks to this economic growth, almost four million people have left the ranks of the unemployed and found new jobs over these last years.

But at the same time, despite these positive changes, we are forced to admit that the economic results we have achieved are still very, very modest.

We still have a quarter of our citizens with incomes below the survival minimum. A quarter of the country's population!

We also must recognize that Russia owes its economic growth above all to the favorable world economic situation over recent years.

An unprecedented improvement in foreign trade conditions for our economy gave Russia considerable economic advantages and brought in significant additional revenue.

It is clear that private initiative, both from Russian business and from foreign companies working in Russia, is the driving force of economic growth.

It is also clear that Russian business must itself become modern, enterprising, flexible and mobile. It must become the worthy successor to the great traditions of Russian entrepreneurship, and some added patriotism would not go amiss.

Our country's success depends to a great extent on the successes of our businesspeople.

I call on everyone who considers the above tasks to be a priority for the country to mobilize their intellectual forces, develop common approaches and agree on a program of action.

I am certain that Russia will rise to a height that is worthy of its potential.

This Globalist Document is adapted from President Putin’s Annual Presidential Address to the Federal Assembly of the Russian Federation he gave on May 16, 2003. For the full text of Mr. Putin’s speech, click here.