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13 Nov, 2009 20:00

Presidential Address to the Federal Assembly of the Russian Federation

Presidential Address to the Federal Assembly of the Russian Federation

12 November 2009, 13:45 Moscow, the Grand Kremlin Palace

President of Russia Dmitry Medvedev:

Dear citizens of Russia!

Dear deputies and members of the Federation Council,

Two months ago, in my article ‘Go, Russia!’ I published the principles for a new political strategy. In today’s State-of-the-Nation Address to the Federal Assembly I would like to set out particular priority plans for implementing this strategy. I will tell you what’s going to be done in nearest future.

My concept of the future is based on my profound conviction about a need and a possibility for Russia to obtain the status of a world power on a fundamentally new basis. The prestige of our Motherland and its national well-being cannot be endlessly determined by past achievements, since the oil-and-gas production facilities that provide most of the budget revenues, the nuclear weapons that guarantee our security, the industrial and housing-and-utilities infrastructure – were all created mostly by specialists back in the Soviet period; in other words: not by us. And, although it is keeping our country afloat, so to speak, it rapidly becomes outdated, both morally and physically. It’s high time that we, the current generation of the people of Russia, make our presence felt and raise Russia to a new, higher step of civilization development.

In the past century, as a result of unbelievable efforts, this agrarian and – as a matter of fact illiterate – country was transformed into one of the most-influential industrial powers to then take the lead in creating a number of new technologies of the time: space, rocket and nuclear. However, under the conditions of a closed society, of the totalitarian regime, it was virtually impossible to preserve those positions. Regrettably, the Soviet Union remained a raw material-based industrial giant that could not stand the competition with the post-industrial societies.

In the 21st century, our country again needs a comprehensive overhaul. In our history, this will be the first-ever experience of modernization based on values and democracy institutions. Instead of a primitive economy based on raw materials we will create a smart economy producing unique knowledge, new goods and technologies – goods and technologies that are useful for people.

Instead of an archaic society in which leaders think and decide for everybody, we’ll become a society of intelligent, free and responsible people.

Instead of chaotic actions imposed by nostalgia and prejudice, we will pursue a smart foreign and domestic policy with purely pragmatic goals.

Instead of the past Russia we will build a present-day Russia: a modern, young nation aspiring for the future which will assume worthwhile positions in the world division of labor.
I made a proposal on how to overcome the chronic backwardness, our dependence on raw-material exports, corruption, how to stand tough competition on the world markets, how to create best opportunities for ourselves, for each and every one of us to be capable to put our knowledge, potential and experience into practice, without relying on someone in high places. In other words: what to do to change living standards in Russia to secure our country’s leadership in the world.

During the public discussion [after my article] I received a lot of responses – from letters in various forms, talking to people of different political views and industry about ways to develop our economy, education and science, to raise the efficiency of public administration, of the political and judicial system.

I thank you all for taking part in the open debate on the new political strategy, both those of you who share my views and those who propose other solutions. What does unite us is at least the realization that changes are necessary and that it’s only up to us what Russia will be for our children and grandchildren and what place it will take in the future world.

Many of your ideas were considered when we were drafting this Address and we worked on proposals of which the implementation will actually mean a consistent and systemic overhaul of Russia.

Dear Colleagues…
The need for change became particularly obvious in recent months. The global financial crisis hit us all, but in Russia the economic downturn proved deeper than in most other countries. We don’t need to seek out whom to blame here – only abroad.

We have to admit that, in previous years, we ourselves did not do enough to solve the problems inherited from the past. We failed to get rid of the primitive structure of the economy, from the humiliating dependence on raw materials exports, to re-orientating production towards people’s real needs. The habit of living on exports still hampers innovative development. Russian business still prefers trading what is created in other countries, while the competitiveness of what we manufacture is shamefully low.

It is obvious that the crisis hindered solving these problems. We were forced to focus our efforts on overcoming its negative aftermath, by engaging the considerable reserves so difficultly accumulated earlier. And the large-scale program of anti-crisis measures let us stabilize the situation by the middle of this year.

Supporting people who found themselves in a difficult situation has been and remains our priority. Despite the decrease in budget revenues, the social obligations of the state are implemented in full. So it will be done further on.

First of all it concerns pensions that have been indexed even more than envisaged. Within the next three years, the average amount of pensions will be increased at least 1.5 times. And by 2010, all pensioners will have revenues not lower than the cost of living. You know how important it is for elderly people.

The key task we are facing to solve is to provide veterans with housing. To that end, the federal budget has allocated 46 billion roubles which will make it possible for 34,000 veterans to improve their living conditions. I additionally instructed to find money to provide flats to all veterans, disregarding when they submitted their application. It’s our duty.

The maximum amount of unemployment allowance has been increased by 1.5 times, as large-scale programs to provide more jobs are carried out. More than two million people have benefited from them which helps prevent the unemployment rate soaring. We will continue creating conditions for providing more employment, especially for those who are facing the risk of losing their jobs – we have more than one million of them. More attention should be paid to advance professional training, organizing public works, creating temporary and permanent jobs and rendering targeted assistance to people, also in moving to another location, to help them in opening their own business.

Normalizing the situation in monocities [with city-forming enterprises] is a particular and very important direction. There are several hundred of them in Russia, with more than 16 million citizens living in them, and a considerable amount of goods produced and services provided. In the months to come, we need to take prompt measures to prevent an abrupt fall in living standards there. It’s also a task for the authorities at all levels and the enterprises’ management. In six months, the government should approve a program of assisting the monocities, as well as adopt comprehensive plans for settlements, which find themselves in the most difficult situation. In such towns and settlements, conditions should be created to use people’s potential in all possible fields and, of course, incentives for private investment. If for some reason there are hardly any economic prospects or they are too small, the people should be assisted in moving to a place more favorable for living and working; all the more so because we have enough regions in desperate need for an additional labor force. I think that many citizens will independently decide about their new type of job. At the same time, I count on getting a responsible and attentive attitude from local authorities and employers to the needs of individuals. The federal government should organize the necessary support too.

Under current crisis conditions, we are lending direct support and assistance to Russian companies, with the volume having amounted to a trillion roubles. Later on we will assist only those who have concrete plans to raise their effectiveness and to implement high-technology projects. Inefficient enterprises should go through financial recovery procedures or leave the market. Protecting them by setting up high trade barriers will not last for ever. Production development is possible only with competition. It is necessary to create access to inexpensive, high-quality goods for Russian consumers. So the task for Russian companies is to learn how to manufacture them.

Let’s particularly note the successful implementation of the government program to support agriculture. It has resulted in better performance in all branches, even during the crisis. We’ll continue our policy of supporting rural areas in the future. We have all we need to make agriculture a leader in economic growth for years to come which will eventually improve living standards in rural areas.

Stimulating private demand is obviously the best anti-crisis policy. Some steps were made for that, but it’s apparently not enough now. I am instructing the government to prepare additional measures to support consumer credit and expand residential construction.

Numerous ideas have been suggested to increase financial investment into infrastructure. Generally it’s understandable that our infrastructure hasn’t been funded sufficiently. But I believe spending more money on this is an unaffordable luxury as long as construction remains overpriced many times over. Things have to be put in order. I am instructing the government to implement the new bidding technologies in this area, electronic ones in particular, and to make technologies and cost of the construction of roads and other infrastructure objects in line with generally-accepted international standards. By the way, we also have to consider a possibility of using the relevant EU norms for the faster development of our construction regulations. It’s been taking us too long.

During previous months, we’ve paid much attention to supporting the financial system. Today our bank system is in a satisfactory condition – for a crisis year, that is. Loan growth has restarted; the volume of outstanding debts has stabilized. Following the decline in inflation and stabilization on the currency market, interest rates have started dropping as well. However from the viewpoint of innovational development, the financial sector is still weak; it’s not sufficiently capitalized, and it hasn’t been able to provide all the required services to our citizens and companies. The government has to provide a plan of particular measures for improving the financial system. It has to become adequate to meet the requirements of modernizing our economy.

I believe, in general, that the government, Central Bank and regional authorities, with the support of lawmakers at all levels, have managed to stabilize the situation in economy and in the social sphere.

I’d like to emphasize something that I hope all those present in this meeting understand: the recovery on the markets is still too weak and unstable. Self-satisfaction is the most dangerous thing at present. We have to continue the realization of the anti-crisis plan and be prepared to take further measures efficiently.

Dear deputies and members of the Federation Council,

We have to learn the lessons from the events of the past period. While oil prices were growing, many of us – or let’s be frank, almost all of us – were enthralled by the illusion that structure reforms could wait and that we had to use those prices that had developed. Preference was generally given to forcing the growth of the old raw material economy; and just a few certain non-systemic decisions were made for the formation of a new one on developing unique technologies and innovative products.

We cannot delay it any further. We have to begin the modernization and technological upgrade of the entire manufacturing sphere. I am convinced this is a matter of survival for our country in the modern world.

I hope Russia’s prosperity in the relatively near future will depend on our success in developing a market of ideas, inventions and discoveries; on the ability of the state and community to find and encourage talented and critically-thinking individuals and to raise young people in the spirit of intellectual freedom and civil activity.

What do I see as the key factors of such development? The local economy has to finally shift its focus to the real demands of people which today mostly have to do with providing security, health improvement, access to energy and access to information. This is where our choice of priorities for modernizing the economy and technological development comes from. They are key to Russia reaching a new technological level and to secure its leadership role in the world. This means implementing the newest medical, energy and information technologies, developing space and telecommunication systems and to radically increase energy efficiency.

The specially-formed presidential commission has approved specific projects in all five areas and has developed detailed schedules for their realization. It has already started implementing them. I count on the active participation of all government agencies and business, science and expert communities in this work.

I want to deliberately consider these areas of modernization in more detail as I believe they are crucial for our country.

The development of medical equipment, technologies and pharmaceuticals is a crucial area of work for our citizens. We will provide people with high-quality, affordable medicines as well as with new technologies in preventing and treating diseases; first of all those that are the most-common reasons for declining health and mortality. It goes without saying how important this is in our demographic conditions.

We’ve already determined a list of strategically-significant medicines that will be manufactured in Russia. First, we mean the most-expensive products, in particular for treating cardiovascular pathologies and oncology diseases. We will have to produce more than 50 of these medicines so that those in need of them receive timely treatment. In the near future we will significantly increase the manufacture of our own medicines and we’ll use them for treatment of the most-common diseases, such as colds and flu.

I believe Russian companies are capable of producing products and technologies that would be demanded on the world market. In order to do this, we have to actively develop a partnership with the leading foreign developers and manufacturers, while keeping in mind organizing advanced research in medicine in Russia.

The stimulation of the production of medicines and equipment will also be executed through the mechanism of state purchase. In five years, the share of Russian products on the medicines market should reach at least a quarter, and by 2020 more than half of all goods. This is the goal.

Moreover, I am giving instructions to develop and introduce a draft law in the State Duma to regulate access to medical supplies and, more importantly, their safety requirements. We must protect our people from counterfeit medicines.

Alongside the implementation of new technologies for prevention and treatment, we have to pay special attention to developing incentives and conditions for a healthy lifestyle. In the discussion of my article I received a large number of responses, including the following words along this line: ‘One’s health should become the index of personal success, rather than the amount of money earned by them. If young people develop a habit of doing sports, such acute problems as drug addiction, alcoholism and child neglect would be resolved.’ It’s difficult to disagree with this.

I would like to note that a natural population growth was detected this August for the first time in the past 15 years in Russia. It is insignificant – it is only by one thousand people, but it is still growth. The result was achieved first of all due to the famous national ‘Health’ project and the new demographic policy that we all have been working on. We all have the capabilities to make the population of our country grow rather than decline.

And we certainly have to think what natural reserves we can preserve and give over to future generations. This is why I believe that the increase of energy efficiency and shift to a rational model of resource use are another priority in modernizing our economy. This task can be fulfilled only if every one of us considers whether they have a responsible approach to energy saving, like they do in the rest of the world. They have all been thinking about it there.

What has to be done? First, programs to manufacture and install meters will be implemented. Today residents of our cities have been paying for an old, and therefore expensive, communal infrastructure. Citizens have to pay for those services they actually receive.

Second, we have started using energy-saving light bulbs. People will experience a significant cut in their expenses due to the replacement of outdated equipment.

Third, next year we will start realizing projects to increase the energy efficiency in many city blocks. Utilities networks will be modernized. Systems of paying for services that would, to a large extent, consider their use and a family’s income will be introduced. Energy service agreements enabling significant economizing will be implemented. First of all, energy-saving programs will be realized in the state sector where there is a lot of work to do. I am challenging all Russian regions to participate in such projects.

Fourth, we have to not only build up the production of natural resources, but to achieve leadership in implementing innovations in traditional as well as alternative energy.

The burning of associated gas [in oil drilling] is an outrageous fact and an example of the inefficient use of energy resources. The atmosphere gets polluted and dozens of billions of roubles turn into smoke. The government addressed this problem again recently and promised to put an end to this disgrace. We have to act quickly and strongly; and we cannot accept any excuses from the oil-producing companies. By the way, this issue is a very popular one. During the meeting I held with members of the Federation Council, Nikolai Ryzhkov asked me to address this situation of ‘wasting’ associated gas. Mr. Ryzhkov, are you present? You are. Hopefully together you and I can fulfill this task.

One of the most promising areas is the use of widespread bio resources in our country; namely: timber, peat and industrial waste as energy-producing sources.

Our research and manufacture organizations will aim to implement innovative technologies, such as development of the ‘superconductivity effect’ which is especially relevant for our spacious territories. We keep losing gigantic volumes of energy while supplying it through our territory. In future, this superconductivity technology will radically change the entire sphere of production, supply and the use of energy.

Programs to develop nuclear energy have been singled out into a separate area within the modernization project. By 2014 we will have the new generation reactors and nuclear fuel that will be demanded by local as well as foreign manufacturers. Nuclear developments will be actively used in other areas as well; certainly, in medicine first of all, for production of hydrogen fuel and for the development of a propulsion system that would enable space travel even to other planets.

We will be actively participating in the international project of using thermonuclear fusion. The future belongs to these technologies. As a part of the ‘elite club’ of countries that have been developing nuclear technologies, in co-operation with our foreign partners, we’ll open up access to a practically limitless source of energy.

Our fourth strategic area is the development of space technologies and telecommunications. Traditionally our country had been among the first in these areas, but today it’s only 63rd in the world, according to the level of communications development. This is very bad. Obviously we cannot move forward without changes in this area. This is why we have to provide broadband internet access and implement digital television and 4th generation mobile communication throughout the entire country within 5 years.

The national network infrastructure has to guarantee access to modern communication means at any point and at reasonable prices, certainly. At the same time, prices for these services have to drop first of all for residents of Siberia and the Far East. I want to emphasize that priority should be given to those services in which the majority of our population is interested; first of all, access to the united rescue and emergency service. This is critical.

Modern, high-speed, optic trunks and increased capacity equipment will be installed throughout our territory. The potential of existing communication lines, which we have many already, will be employed to its full extent. This would enable the exchange of the growing communications flow between Russia’s regions as well as between different countries. Russia covers 11 time zones; its’ task is to become a key element in global information infrastructure.

Talking about time zones, we have traditionally been proud of their number because we’ve seen them as a bright illustration of the greatness of our Fatherland. This is really true. But have we ever seriously thought whether this subdivision really enables the efficient administration of our country and whether it leads to the use of overly-expensive technologies? Examples in other countries (such as the US and China) reveal that we could do with a fewer time differences. These are large countries. We should consider the possibility of reducing the number of time zones. We should certainly consider all the consequences of such a decision. This also relates to feasibility of transferring from summer to winter time. We have to consider all economic benefits and the obvious inconveniences, but this is something that has to be done. I hope that experts will provide us with an objective – I’d like to emphasize the word ‘objective’ – answer to these questions.

The use of space technologies, certainly including GLONASS, will also become a priority area of our work. They will provide our people with the opportunity of using modern navigation equipment in their vehicles. They will help to maintain the security of transport and of technically-complicated devices; to improve the co-ordination of services that are responsible for preventing accidents and emergencies and for rectifying the consequences of natural and technological catastrophes. We will also have new technologies to provide high-accuracy digital cartographic information.

While implementing the engineering solutions and developing new generation spacecraft, we should reach world levels in terms of the power and timing of active, orbiting Russian communication satellites by 2015. Their technical capabilities should enable seeing the entire world. They should help citizens of all countries to conduct their scientific research, to work more efficiently and to communicate more actively.

Finally, the fifth priority task is the development of strategic and information technologies. Russia should fully employ the potential of supercomputers and supercomputer systems that are joined by high-speed data transmission links. They will enable design of the newest aircraft and spacecraft, vehicles and nuclear reactors within the next five years. Complicated equipment that hasn’t undergone supercomputer formation, or that hasn’t been digitalized, so to speak, will be irrelevant on the market in just a few years. And we have to work hard in order to win competitive positions in this area.

Moreover next year, state services will become available through electronic channels as well. In particular, this would refer to passing qualification exams and receiving driving licences, registering real estate and receiving bibliographic information from state funds. In two years’ time, this electronic format will provide at least 60 key state services. This is the goal.

The Implementation of citizen social cards will be piloted. They will enable receiving social services and simplify the participation in medial and social insurance programs. In future they may become combined with electronic cards that provide access to bank products, including making mandatory and optional payments. The implementation of electronic technologies will not just be convenient for people; it should also become a powerful tool for opposing corruption.

One of responses to the aforementioned article [‘Go, Russia!’ ] was from the town of Serpukhov which says that the implementation of such technologies, the so-called electronic government in particular, will significantly reduce problems of corruption and will help to save money and time standing in lines. This is obviously so.

I’d like to emphasize that the five aforementioned strategic areas of technological modernization are definitely the priorities. But these are certainly not all of the state’s tasks. The government has to actively execute programs of developing other sectors of the economy with the goal of increasing the added-value share within the country. This is the key point.

As a part of realizing the general strategy, we have to undertake several systematic steps. I am going to name them too.

First, we must modernize the state sector. Its share doesn’t go below 40%; and during the recession, the role of the state in the economy has grown again, naturally. At the same time this tendency has been observed worldwide, but from the viewpoint of long-term prospects, there is nothing good about it.

We have to determine what structure of the state sector meets our strategic tasks. I am instructing the government to prepare solutions to optimize the volume and efficiency of state participation in the activities of commercial organizations. We are talking about a number of assets that have a strategic status today. By 2012 we have to complete the relevant program to reach the optimum parameters of the state sector in the quickest time, as nothing lasts forever. I’d like to emphasize that these issues have to be dealt with carefully, without ‘wasting’ something that belongs to our citizens.

However it doesn’t make sense to preserve a large amount of property without the prospects of its modernization either.

Regarding state corporations, I believe they’re generally unpromising in modern conditions. Corporations that have operation time limits established by law have to be eliminated at the end of their work; and those that work in the commercial competitive area have to be transformed into joint stock companies under state control within time. In future they should either remain in the state sector where we need them, or they should be sold to private investors.

Moreover, we have to execute an independent audit of corporations – as well as large companies with state participation – to implement modern models of administration in each of them, and to make a direct connection between the salary for their leaders with expenditure reduction, labour capacity increases and the results of implementing technologies and innovation.

Optimizing budget expenditures also has to become a constant area of work for the executive authorities. The government has to develop and realize a range of measures in forming long-term incentives to raise the quality of state services, to enable accountability for the use of budget funds and its’ activities in general.

I believe it is absolutely unacceptable that particular services cost more for Russian taxpayers than in leading countries.

Second, a comfortable environment will be formed in Russia for performing world-class research and development. In his time, French scientist Louis Pasteur noted very truly: ‘Science must be the most-elevated incarnation of the Fatherland as, of all peoples, the one who will be the first is the one that will overtake the others in the fields of thought and mental activity’. Beautiful words.

Our country has always had many talented people open for progress and capable of creating new things. They are the ones that the world of innovation rests upon; and we have to do our utmost so that these experts would become interested in working in their homeland. Thus we have to form a constantly working mechanism of support, and to involve the most authoritative Russian and foreign scientists, as well as businessmen with experience in commercializing such development in such work in Russia. This is not an easy task. We have to simplify the rules for recognizing academic degrees and diplomas awarded by world-leading universities, as well as employment regulations for experts from other countries. Visas should be issued for them quickly and for a long term. It is us that need them, not vice versa.

By the way, many people wrote in their responses to my article that our compatriots, i.e. scientists who have been working abroad, could make a significant part of the expert community and help organize international expertise for Russian scientific projects, and even move back to our country provided certain conditions are created for them.

I am instructing the government to provide an expansion of grants for developers of the newest technologies on a competitive basis. Development institutes should be seeking and selecting promising projects from the entire country, and providing financial assistance to innovative businesses, including small innovative businesses that have been formed today – at the same time sharing the risks with private investors, of course.

This is what our citizens also talk about. An idea from the Altay Region suggests creating business incubators on the basis of modern institutes. Such ideas have been voiced before too. Institute graduates would use them to learn how to turn technical ideas into profitable business projects. I believe such ideas deserve our full support.

I want to emphasize that not only state, but large, companies should also participate in forming preliminary orders to get results in such research. This is the social responsibility, if you want. At the same time, significant parts of these projects should undergo international expertise and should be executed in partnership with foreign centers and companies.

The government should make all the required organizational and financial decisions for the implementation of this task no later than the first quarter of next year. I want to note that the state expenditures structure for this purpose has to consider our chosen priorities of technological development to a large extent.

Finally, we have to finalize the development of suggestions on forming a powerful research and development centre in Russia that would focus on supporting all priority areas – meaning ALL the areas. We are talking about forming a modern technological centre; something, if you want, along the lines of Silicon Valley and other western centers of this kind. We would create the right kind of conditions to attract leading scientists, engineers, designers, programmers, managers and financial experts. And it would develop new technologies that would be competitive on the world market.

The third systematic step that we have to take is the following: we have to reach the dimensions in legislation and state management which would enable our entire economy to switch to the innovation type of development.

We’ve said on numerous occasions that the order of making investments in Russia should become no less comfortable than that of our rivals; and the system of control and supervision, including that of certifying products, should not cause additional obstacles for investors who are ready to realise investment solutions.

I am instructing the government to prepare suggestions on introducing the new order for approving permissive documents for starting investment projects, within 2 months’ time. This work should result in the constant reduction of the time period with which to consider the [investment] implementation. Provided this is done, the period should be a mere 3-4 months for objects that are not in the so-called ‘dangerous’ category. Today this period takes 1.5-2 years, and in large cities the approving processes often spread over years.

It is feasible to place the authority and responsibility for coordinating this work on regional leaders. At the same time officials guilty of systematic delays in approving documents and of charging fees for things that haven’t been explicitly provided for in the legislation, have to be subject to administrational and other forms of punishment, and where necessary, to be dismissed from office.

Fourth, our taxation system – as well as legislation on mandatory insurance payments – also has to be adjusted to the modernization tasks.

The government has to present draft laws in the first quarter of next year that would provide for creating favorable conditions for innovation including, but not limited to, determining the five-year transfer period in relation to increasing mandatory social insurance fees. At the same time we have to state clearly who will be given such preferences.

It is generally obvious that our taxation system requires improvement. Discussion on what taxes and at what rates should be charged in our country is still open. The recession has certainly made it more difficult to make decisions in reducing the tax burden. But these issues require reconsideration in the nearest future, and we will definitely return to them.

Dear colleagues:

Obviously the realization of our strategic plans is impossible without fully-fledged changes in our community. We will not succeed unless we strengthen the political system and legal institutions, and provide external and internal security in the state, social stability, modern education and culture (in the broadest meaning of the word).

Our mutual efforts will result in quality changes not only in the living standards of our citizens. We ourselves should change too. We have to overcome the widespread idea that all existing problems should be resolved by the state or someone else, and that each one of us in our place. Personal success, encouraging initiative, raising the quality of public discussion and intolerance of corruption have to become a part of our nationwide culture; exactly, a part of nationwide culture.

Achieving these goals requires us to start at the beginning by educating 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 student’s potential and help to 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 wrote 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 the 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 specialize at university.

Second, schools should become creative and information centers offering a rich intellectual and sporting life. An architectural 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 enter 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 a child’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 program, ‘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 programs and in spending funds. Starting next year, schools that do well in the competition within the national project, ‘Education’, will be granted independence and become autonomous institutions. Mandatory reporting for such schools will be drastically reduced in exchange for their making available information on their 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 a 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 in general.

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 be provided for a range of educational programs, and teacher training institutes should be gradually transformed either into major basic centers 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 specialized education for senior students to teach in our schools. This will include skilled professionals who have no formal teaching education. Those who choose to work in schools will be able to take short-term specialized 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 program 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, implants national and global cultural values in the younger generation and nurtures civilized citizens. And an innovative economy can only emerge 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 centers, we need to actively promote information technology. This must be the basis for cultural modernization. New technology will provide access to culture for millions of our fellow citizens and, most importantly, for our young people.

Moreover, we need to take a closer look at the specialized 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 must take stock of the unified, cultural space of the country in its diversity; help preserve the rich national traditions of the peoples of Russia and, at the same time, develop in every possible way and improve teaching of the Russian language, which is the basis of the international communication and unity of our country.

At one of the meetings that I had with teachers, they made the correct observation: ‘It’s enough of changing the emphasis in different words – we need to get down to the many real problems that we have in our country’.

Third, we need to pay more attention to support of innovative, experimental art styles. Preserving our traditions, the rich – very rich – classical heritage of our culture, the state should take care also of those who are looking for new ways in artwork. We should remember that what we call classics today, often started against the canon, by denying usual form and through breaking with tradition. Innovative spirit should be encouraged in all areas of cultural life.

I consider creating conditions for civil society development as the state’s task. People who are not indifferent to what’s happening around them must have all possibilities to implement their noble aspirations.

We will continue to support non-commercial, charity organizations that help solve complex social problems. Amendments to legislation will be directed at facilitating the work of those non-commercial organizations, which engage in charity work and help socially-vulnerable citizens.

What will be done in this regard? First of all, we will introduce an institution for socially-oriented non-commercial organizations. Those who get the corresponding status will be able to count on direct support from the state. Government authorities can provide financial, informative and advisory help to such non-commercial organizations, but not only that. The authorities will provide them with tax incentives and will place state and municipal orders with them. The authorities will also have the right to release property to such non-commercial organizations to use them in their work.

We are going to exempt from taxation the material help provided by charitable and non-commercial organizations to children deprived of parental care and for the disabled.
There is one more suggestion. The services provided by non-commercial organizations on medical attendance, on caring for invalids and the elderly, on social services for orphans and children without parental support, will be exempt from value-added tax.

Support grants for programs on health care, physical culture and grassroots sports development will not be liable for income tax.

One more change in the legislation that we have been talking about for several years already, will deal with the issues of the formation and replenishment of special purpose capital of non-commercial organizations. It will be possible due to the donations of securities and real estate that we’ve been talking about for several years already. And the list of activities liable to be financed from the special capital funds will include protection of the environment.

Third, the norms regulating charity work will be completed and adopted. Among its purposes the following will be acknowledged: the social rehabilitation of orphans and children without parental support, providing legal support, facilitating the scientific and technical creativity of children and young people, as well as promoting charity and voluntary work.

Fourth, the notion of ‘donation’, which is stipulated in the Civil Code, should be completed with regards to volunteer work and services. That said, there shouldn’t be any backdoors for those who might want to use this kind of activity to avoid paying taxes. That’s obvious. I will say it again – we will support those who selflessly dedicate their work and time to other people.

The growth of civil consciousness and the development of civil society institutions is only possible in a developed political system.

Today we talk about modernization – and this is the quintessence of my Address – about our desire to be modern. Having said that, we need to remember that modernity is, of course, not some set notion or the final destination of progress, after reaching which we can relax and have some rest. On the contrary, a society can be considered truly modern only if it’s set to continuous renewal, on regular evolutionary transformation of its social practices, democratic institutions, vision for the future, evaluation of the present, on gradual but irrevocable changes in technological, economic and cultural areas as well as the steady increase in the quality of life.

But changes for the better happen only where there is the possibility for open discussion of emerging problems, for honest competition in ideas that define the solutions to those problems, where citizens value social stability and respect the law and, at the same time, can assume the responsibility for the state of affairs in their village or town, and understand that only an active position can move the heavy machine of state bureaucracy.

According to the Constitution, the only source of power in our country is the people. In practice, economic, social and foreign policy is developed as a result of the complex co-operation of very different social groups. Following legal interests – and considering the opinions of all Russian citizens, regardless of their nationality, religious, political and other convictions – is the state’s responsibility, the responsibility of a democratic state. The ability to fulfill this responsibility is the main criterion for the efficiency of such a state.

The political diversity of our society defines the structure of our multi-party system. Today we can say that the multi-party system in the Russian Federation has been established, as a whole. It has become a national political institution that functions in a stable way, an important instrument that provides fundamental rights and freedoms for our people, including their exclusive right to power.

The political parties that are active in our country today have been through the test of time. They have grown stronger in fighting for votes, have won trust and have become truly popular. They have an organizational structure, human resources and intellectual potential – everything that they need to work on an all-Russia scale. Their programs reflect the whole spectrum of the political views that exist in society.
At the same time, many aspects of political life have come under public criticism. There are reported problems in elections organization, the low level of political culture, the deficit of thoroughly worked-through alternative suggestions on specific issues of social and economic development.

We must continue the joint work on improving the quality of the representation of the people and creating additional conditions for a free, just and civilized competition among the parties.

Already this year, the parliamentary majority have supported a number of my legislative initiatives that are orientated to solving such tasks. The so called ‘barrier’ for parties to enter the State Duma has, in fact, been brought down to 5%. The parties have the right to put forward candidates for positions of leaders on federal subjects, as well аs the guarantee of equal coverage of their activities in the state mass media. I would also like to thank the Federal Assembly for supporting those initiatives.

What do I suggest today? I suggest that at the next stage, we pay special attention to strengthening democratic institutions at a regional level. After consulting with representatives of non-governmental organizations and political parties, I think it is necessary:

First, to have one criterion for determining the number of deputies in law-making agencies in the Russian Federation’s subjects. Today it is done arbitrarily which often leads to results that are hard to explain. For example, several million living in economically-stable Moscow are represented in the City Duma by 35 people’s deputies, whereas the local Parliament in the Tyva Republic – whose economic potential is a lot more modest than that of Moscow, and the population is 30 times less – has 162 deputies. We need to work out a flexible process of gradually aligning and eliminating these errors. Representation needs to be more universal.

Second, all parties represented in regional parliaments will get an opportunity to form factions. There needs to be guarantees that everybody will see their representatives fill parliamentary chairs and assume leadership positions.

Third, wherever it has not yet been set, parties that have more than 5% of votes at regional elections have to get guarantees of representation in law-making agencies of federal subjects.

Fourth, parties that are not represented in the State Duma, but have factions in legislative assemblies of federal subjects, should not need to collect signatures in order to run in regional elections in these regions. The same principle could be instituted for municipal elections.

And one more thing. I think that in the future we should turn away from collecting signatures as a means of allowing a party to run in elections. Our legislation already has strict requirements for the quality of party formations. It obliges parties to have significant numbers – it is stated directly in law – and be active in most regions of the country. So they don’t need to go though additional tests of public support and organizational skills.

Fifth, it would be good for agencies of legislative power at all levels to dedicate at least one meeting a year to taking suggestions from parties not represented in legislative agencies, and discussing them.

Non-parliamentary parties should also be guaranteed an opportunity of permanent participation in the work of the Central and regional election commissions.

Sixth, it is time to finally bring order to early voting at local elections. Legislation about Presidential and State Parliamentary elections strictly limit the time frame for this procedure and clearly state cases in which it could be applied. We should take these norms as the basis, and continue to adjust the federal and regional legislation. I think that we also need to analyse the practice of using absentee ballots and take necessary measures in order to prevent illegal operations. We need to grant all parties equal rights to municipal buildings, which could be used for campaigning.

Seventh, I recommend all subjects in the Russian Federation to pass laws guaranteeing an equal amount of coverage in the mass media to all parties represented in regional parliaments. The mechanisms of such guarantees should take into account the media market of each region, the special nature of the local social and cultural characteristics. But it needs to be done.

Legislation assemblies of the federal subjects where it has not yet been done can use the State Duma experience. Its most important sessions are broadcasted in real time on Internet. I suggest to the State Duma that it organizes broadcasting of all its open plenary sessions. I think this could be of interest to the Federation Council also, and possibly to the Constitutional Court.

Eighth, I suggest we include in regional charters and constitutions clauses about annual reports by leaders of legislative power, given to the local parliament, similar to the Constitution of Russia.

Ninth, this year we are conducting an inter-party discussion about the necessity of switching to electing representative power agencies at all levels exclusively through party lists. By the way, this idea was expressed by representatives of the ruling party as well as opposition parties. A common standpoint has not yet been established. I suggest we start working on it. This discussion should continue, and I will make a decision based on its results.

Tenth, we will continue and try to bring to a new level the ‘technical equipping’ of political competition. It is a very important thing in the contemporary world. During discussion of the address, somebody expressed an opinion (a journalist from the Stavropol region sent it): ‘Organization of the election process nowadays is part of Russia’s national infrastructure, just like communication, roads, power lines, postal services. But if there is no such element in the national infrastructure, a whole aspect of life in Russia is lost’.

Bringing broadband Internet to Russian regions, which is planned by the government, will open up new horizons for free discussion on any topic and access to all kinds of information about events in the country and in the world. The implementation of an electronic system for counting votes at the polls will help fight violations during election campaigns. We need to make the election system at a regional level more transparent. I appoint the government along with the Central Election Commission and local authorities to work on a program of accelerated re-equipment of the election system.

As the guarantor of the Constitution, from now on I will do everything I can to strengthen the democratic institutions in our country. With that I would like to stress: the strengthening of democracy does not mean weakening law and order. Any attempts to shake the situation and destabilize the state and split society, using democratic slogans, will be cut short. The law is the same for everyone: for the ruling party and for the opposition. As we know, freedom implies responsibility. I hope everybody in this hall understands that.

At the beginning of the next year, we will be able to discuss these issues at the Russian State Council session. I invite representatives of all political parties to take part in this important work.

Dear deputies, dear members of the Federal Assembly!

In my article, I said that corruption is one of the main obstacles in the way of our development. Apparently, we need to fight it in all areas – from improving legislation, law enforcement and the judicial system to raising awareness among our citizens, making sure they cannot tolerate this evil in all its forms.

It is often said that not very many corrupted officials are prosecuted. I want to give you some data: in the last six months, over 4,500 corruption cases have been processed. 532 state representatives and local officials and over 700 law enforcement workers are among the convicted. Unfortunately these numbers show us the extent of corruption in our society. However we cannot solve this problem by simply arresting people. But we do need to arrest.

In order to be successful in our fight against corruption, we need to make all spheres of state governing open to society, including the activities of state agencies, courts and the judicial community. This is what we aim our laws at, the laws which will come into force next year: about the openness of state agencies and making information about court activities available. We will also institute the order of posting information about courts online. Texts of court documents, posted on the Internet, will give a better idea of how courts work, as well as information about problems in legislation and judicial practice. I am convinced that this will help overcome legal nihilism.

We also plan to create appeal agencies in courts of law; at first only for civil suits beginning January 1st 2012.

What is the difference between the new order of appeals and the order that we have now? As you all know, the appeal agency considers the complaint about a court’s decision in full, i.e. they test and assess facts of the case and their legal classification. With that, the appeal agency should either confirm the subordinate court’s decision or reach a new verdict – and this is the fundamental difference – on the case.

Such inspection of court verdicts should make them more legitimate and justified. And, what is also important, it will not make the time frame for cases longer.

In order to have a full-scale appealing procedure in place, including that for criminal cases at the second stage, beginning January 1st, 2013, we will need to increase the number of judges and find resources for that in the state budget.

I will also emphasize that a competent justice system can exist only if judges carry a reasonable load. We are close to European standards in their amount per 1000 citizens. But in Russia each judge handles a lot more cases. And we need to remember that as well.

The quality of the judicial system very much depends on the state of affairs in law enforcement agencies, and things are not always good here.

We need to take measures to make sure there are no dishonest staff members in the police and special services. They should be prosecuted right away.

Employees of these agencies will submit reports about their assets as well as the assets of their families. We need to be strict about discipline, be more active with internal investigations and strive for professionalism and the morality of the staff.

At the same time we need to remember that most police staff are honest people. They put their lives at risk on the job. They work on the frontlines of the war on crime; they defend the basics of Constitutional order, and we should raise their material wellbeing. Society should respect their work like everywhere else in the world.

I will mention one more important aspect: Our criminal legislation, as well as its application, should become more up-to-date. Criminal punishment – both at the legislative level and at the stage of its application by courts – must match the crime and, therefore, do a better job protecting the interests of society and the complainant.

In criminal law we should use more often the so-called administrational pre-jurisdiction, i.e. prosecute under the criminal code only after multiple administrative violations take place. We need to expand the use of the fines system as punishment for minor non-violent crimes. And, if it is impossible to fine the person, then use compulsory labor, which should be instituted as a separate punishment.

Bail could also be used as a punitive measure. And the amount of bail should be higher for particular categories of crime.

I support the draft law, which is being discussed in the State Duma, aimed at the termination of criminal prosecution for taxpayers, if they fulfilled all their budget obligations and paid all fines and fees. Such person should not undergo additional inspections by law enforcement agencies.

Now about what I think is the most serious internal political problem in our country – the situation in the North Caucasus.

Terrorist attacks on officials, clergy and law enforcers destabilize the situation and hinder the normal development of the economy and social sphere in the region.

We will not tire in fighting against international terrorism, we will keep destroying terrorists. And soldiers and employees of the Prosecutor’s office, working in the North Caucasus, will get special attention from the state. According to the Presidential decree and the Government’s ruling, they will receive additional benefits and social support. And we will continue to revise that.

I already said that the situation in the North Caucasus would not have been so tense, if social and economic development in the region had been effective. Apparently at the root of many problems is the economic underdevelopment and lack of opportunities for most of the region’s residents. Let’s be honest – the level of corruption, violence, clan policies in the republics of the North Caucasus are unprecedented. Therefore we will pay serious attention to social and economic problems of its citizens.

This year we allocated 26 billion roubles to two federal programs targeted at the development of Russia’s south and the Chechen Republic. By the end of the year the Government should approve another federal program aimed at supporting the Republic of Ingushetia from 2010 until 2016, allocating no less that 32 billion roubles to that end.

As we can see, the amount of help we provide to the North Caucasus is significant. But the way this money is spent is not the best. Moreover, some assets are stolen by officials. They do that, while unemployment and therefore poverty within the population are extremely high in the North Caucasus.

This problem is especially acute in Ingushetia, where less than a half of the economically-active population has jobs. In the Chechen Republic it is more than 30%.

I will also note that this region has the highest rate in Russia of young people aged 15-20. And, for obvious reasons, it is even harder for young people to find jobs. In the Chechen Republic the unemployment rate for young people is 40%.

The number of refugees and migrants in some regions of the North Caucasus is 20% of the local population. And a lack of stable employment is just one of many problems these people run into.

We come to the obvious conclusion: for a successful solution to the problems in the region we need to take additional measures. We need to develop business, bring in investment. So far a good investment climate has not been created in most republics of the North Caucasus, but it is necessary to change the situation. With that I commission the Government to make a list of investment projects within 6 months, which will be supported.

These projects could be in the field of energy and construction, tourism, agriculture and small business. We need to look into the possibility of implementing tax cuts and other finan