President Putin: Russia's economic achievements are very modest indeed

Russian President Vladimir Putin has described the country's recent economic accomplishments as "very modest indeed." "Firstly, one-fourth of Russian citizens still have incomes lower than the subsistence minimum," he told the Federal Assembly in his State of the Nation address.

Secondly, "the country's economic growth remains extremely unstable." "In 2000, industrial production kept growing all through the year, while in 2002, it did so only in the course of a total of six months. As a result, we saw the unemployment rate grow in the recent months," he said.

Thirdly, "the economic expansion rate itself has slumped," he went on. "Last year, after a 10% expansion rate registered in 2000, the economy only grew some 4%." A decreasing economic expansion rate "inevitably slows down in social development and keeps us from solving many other tasks facing the country," stated the president.

"We also have to admit that economic growth in Russia is linked, first and foremost, to the world's favourable economic conditions of the past few years," he continued. "Thanks to an unprecedented improvement in foreign trade conditions granted to our economy, Russia gained substantial economic advantages and large extra revenues." Some of the revenues were spent on the effort to raise the standard of living, some were invested in Russian economy, and some used to pay one-fourth of country's external debt, said the president.

In addition, "it was thanks to these revenues that we replenished our reserves," added Putin, stressing that the reserves of the Finance Ministry and the Central Bank had reached "a record high of 61 billion dollars," a far cry from the 11 billion dollars of three years before.

"I think it is clear that our social and economic achievements would have been far less if it weren't for the foreign-policy situation," he noted. "We must bear in mind though that this situation cannot last forever."