Putin: Economic weakness - threat to national sovereignty

Russian Prime Minister Vladimir Putin has presented to the lower house, the State Duma, his annual report on the government’s work in 2010, and outlined plans for the future.

It is the third time that Putin is presenting his annual report to the legislators and the last before the parliamentary election campaign for 2011 begins.

As Putin started his report he noted that the last year was a difficult period for the whole world and Russia as well. He noted that the financial crisis dealt a strong blow to the economies of many countries, especially for the social sphere. At the same time he observed that Russia had managed to avoid the most serious consequences of the crisis and a social catastrophe.

Putin told the parliament that the main lesson to be learned from the crisis is that economic misery could be a threat to a nation’s sovereignty. If the country is weak there are always those who will arrive and give you unwanted advice, the Prime Minister said. He called such behavior a blatant dictate and interference in the nations’ domestic affairs. Vladimir Putin noted again that fortunately Russia had managed to avoid this fate and he thanked the parliament for the consolidated position that had allowed such outcome.

Putin told the State Duma that he had traveled all over the country and personally inspected how people live. The crisis arrived from abroad, but Russian authorities have accepted the responsibility for its consequences, Putin said. Russia is a social state, according to our constitution and we will behave accordingly, the Prime Minister said.

Russia should become one of the five leading economies within a decade

The major goal that Russia has to achieve in the upcoming decade is becoming on the five leading world powers, Vladimir Putin stated in his address.

Russia should modernize its economy, he said. Fulfilling the plan would require a list of important steps, including the improvement of the investment climate in the country, fighting corruption that “pulls us backwards,” and increasing labor efficiency, which is still not as high as in other developed states. The portion of innovative products in the economy should be increased as well.

The Prime Minister stressed that Russia needs a decade of stable development, without “distractions” and “unjustified liberalism”. He pointed out that each year of such development should bring perceptible results for the citizens.

Putin specifically underlined that it is also crucial to maintain civil and inter-ethnic peace in Russia. All attempts to destabilize the situation should be blocked, he said.

Government’s aid to banks yields positive results

Vladimir Putin noted that the growth on Russia’s securities market demonstrates that the government had chosen the right strategy for dealing with the international financial crisis. Russia’s growth both in terms of the Gross Domestic Product and the total capitalization of the country’s corporation is remarkable he noted. The GDP growth in Russia was higher than in most G20 countries and the capitalization was the highest in all of the BRICS countries.

Putin said that Russian banks were raising the volumes of extended credit and this is proof that the state was right in its decision to help banks in times of the crisis. He noted that this was not help to some specific companies, but assistance to the system as a whole. As a result, the government did not allow the situation of 1998 to repeat itself and the economy stayed afloat. Furthermore, Putin noted that the state managed to gain profit on the emergency credit given to banks in times of the crisis and all the money had been returned.

Putin noted that the industry in Russia was growing and said that the ratio of processing enterprises is growing as well, and that means the effectiveness of the economy is increasing. At the same time, the Prime Minister stressed that the modernization must become even more intense as the current oil boom only stresses the necessity to shift to a new model of economy as a whole.

Customs Union as a step towards common Euro-Asian market

Vladimir Putin praised the development of the Customs Union (between Russia, Belarus and Kazakhstan), the emergence of which he called a historic event. The Prime Minister said that the businessmen had already understood the benefits of the new economic bloc as trade turnover inside the Customs Union had grown by 28 per cent. Putin said that the plans were not to stop at this point, but to continue creating the common economic space and move from regulating trade tariffs on a single market to introducing a co-ordinated economic policy within the union. He added that such move will change the geopolitical situation in the region and that the ultimate goal is to build a single Euro-Asian multi-billion market from Lisbon to Vladivostok.

Putin said that he had talked to politicians in Western Europe about this idea and found support. However, the Russian Prime Minister noted that there were more urgent tasks in dealing with the partners from Western Europe, first of all the creation of the reliable system for energy supplies.

Defense Industry as driving force of modernization

Prime Minister Putin told the parliament that the government was applying much effort to boost the defense industry in the country and therefore to secure the nation’s high defense and economic potential. Putin noted that the defense sector, just like the space and nuclear industries, was Russia’s great advantage and a positive example of the Soviet legacy. He said that the defense industry was successfully developing and that the new weapons program would cost the country 20 billion rubles ($712 million). In particular, the Prime Minister mentioned the working samples of the fifth-generation fighter jet, newest anti-aircraft systems, capable of intercepting targets even in outer space. Putin said that in the nearest future Russia planned to double the production of ballistic missile systemsand by 2015 – to create a new booster rocket for the space program as well as a new launching site that would make the country completely independent from foreign facilities.

Putin noted that the development of the defense industry would include serious investment into research and development with priorities given to technology of double use. He said that the military forces must be completely re-armed in ten years and, of course, this must be done by Russia’s own military-industrial complex. The prime minister noted that some weapons could be bought from foreign producers but this must be an exception because money from the defense order must not leave the country and also due to the fact that most modern pieces of weaponry are never offered for sale abroad.

Army housing problem to be solved by 2013

The government is finally set to get rid of waiting lists that Russian officers were put on in order to be provided with housing years ago. Vladimir Putin said that from 2011 to 2013, over 77,000 flats will be given to Armed Forces personnel. In the previous two years, he pointed out, about 100,000 long-awaited apartments have been given to the officers.

The prime minister vowed that after the current housing problem is settled, people will not have to spend years waiting for the flat they are entitled to be provided with.

In addition, justice will be restored to servicemen who were fired from the Armed Forces in the 1990s. “Back then, the government simply did not have enough sources to fulfill their obligations [to the officers]” Putin said. Thirty-six billion rubles (about $1.2 billion) will be spent to solve the housing problem for people who have been on the waiting lists since then.

Media should popularize blue-collar occupations

Employment problems have become yet another topic of the premier’s address. According to Putin, in 2011 the state will allocate 105 billion rubles (about $3.5 billion) on various programs aimed at tackling unemployment and supporting the jobless.

He underlined that it is important not only to provide people with jobs, but also to focus on raising workers’ professional skills. That would help citizens to get better-paid jobs, which are also of a higher demand on the market, he noted. The disabled, as well as parents raising children with health problems will be given a priority for joining the state programs.

The main point of the government’s policy on labor market is to “create modern, efficient, and well-paid jobs,” as well as to stimulate the introduction of new technology that will help to move on from hazardous industries.

“It is crucially important to raise the competitiveness and professional status of workers as well as the prestige of the workers jobs on the whole,” Putin stated. The mass media, the Prime Minister noted, should take an active part in popularizing blue-collar occupations. Currently, not enough attention is paid to that.

No restrictions planned for internet services

The premier’s presentation – detailing the government achievements in realizing various state projects – was followed by a Q&A session. The four Duma political factions – the ruling United Russia, the Communist Party, Fair Russia and the Liberal-Democratic Party (LDPR) – were allowed to ask Putin three questions each.

The deputies’ questions to Prime Minister dealt mostly with most burning issues of social policy and some questions that had hit the headlines of Russian media over the past few weeks. In particular, a deputy from the Liberal Democratic Party asked the prime minister if the recent rumor that the Federal Security Service was seeking ban on certain internet services was true.

Putin answered that it was perfectly natural that Russian security services were worried by internet resources based abroad. But at the same time Putin noted that no restrictions on any services were planned in reality and added that he personally was against any restrictions of the internet at all. Putin also said that the internet was just a tool for useful enterprises and for self-expression as well.

Care for people is best immunity against revolution germs

The wave of protests that swept through North African countries is prompting the EU to reconsider its policy on open borders in order to resist the influx of refugees. Russian legislators wanted to know what measures the Russian government takes to avoid problems with the events. They also asked Vladimir Putin to comment on complications that the Russian economy is facing as a result of the situation.

In response, the prime minister stated that pursuing social-economic policy to the benefit of Russian citizens which brings positive results is the main guarantee in avoiding social unrest.

“If people see that we work protecting their interests and achieving positive results, if living standards increase – believe me, we will never face any problems with…maintaining civil peace in our country,” he said.

Putin added though, that there will always be forces who attempt to destabilize the situation – just as there are bacilli in any healthy organism. The point is to support the immune system, because if it gets weak, the body immediately catches flu, Putin said.

“If we support healthy social-economic immunity in our country, no quasi-political influenza will be able to make itself felt,” he concluded.

Government and parliament make good team

­At the end of the special parliamentary session Prime Minister Putin again reminded the deputies that the country had passed a difficult period. Putin said that this was first of all due to the Russian people, but the government and the parliament also should be credited for overcoming the hardships. In particular, Putin thanked the legislators for speed and efficiency they demonstrated while approving the anti-crisis measures by the government. “Despite the criticism that I have heard from you, I would like to wish you all success at the forthcoming State Duma elections,” Putin said in conclusion.