Author`s name Timothy Bancroft-Hinchey

President Putin’s Vision

Synopsis of the speech of the President of the Russian Federation at the Meeting of the State Council on Russia’s Devlopment Strategy through to 2020. While tracing the many positive steps which have been implemented, President Vladimir Putin set forth general guidelines of Russian policy over the forthcoming 12 years, highlighting the country’s main needs.

President Vladimir Putin began his speech by underlining three main areas of strategic policy over his eight years in office, namely in the areas of the economy, defence/security and integrity of the State. Describing the situation eight years ago as “very difficult”, he remembered the devaluation of the Rouble after the default on international debt repayments and the terrorist activity which created dangerous security threats in southern Russia.

The great success Russia has enjoyed since then is due to the response by the Russian people. In Vladimir Putin’s words, “ our people closed ranks and drew together. Not only our military but society itself rose up to defend Russia, to defend our territorial integrity. Doctors and teachers who had not been paid for months loyally performed their duties. Workers, engineers and businesspeople all continued their work, trying to haul the economy out of its state of stagnation and collapse”.

Regarding the economy, the President reminded those present of the great influence exerted eight years ago by criminal organizations and oligarchs, while the agricultural sector was in crisis and Russia’s finances were at the mercy of foreign loans. The default on loan repayment in 1998 seriously damaged businesses and people’s savings and in 1999, the inflation rate stood at 36.5%, while some companies had wage arrears of up to two years and many public sector employees received their salaries months behind schedule. Real incomes had dropped to just 40% of their value in 1991, a third of the population lived below subsistence level, while the birth rate fell and the death rate rose.

In matters of defence, “In Chechnya a regime of terror was unleashed on the population... emissaries from Al Qaeda oversaw terrorist training camps” while “outside forces with an interest in weakening Russia and perhaps even bringing about its collapse were openly inciting the separatists”. The armed forces were ill-prepared and demoralised with increasingly outdated equipment.

Finally, as far as territorial integration was concerned, some 2000 territories were near to a state of legal limbo. “ Russia itself had become a ‘patchwork’ of territories. The majority of regions had laws that contradicted the Russian Constitution. Violations in some cases were simply flagrant. There were regions, for example, that defined their status as that of a ‘sovereign state associated with the Russian Federation’.”

The result was that “ a third of our population had been left completely destitute.

The difficult economic and social situation and the loss of many reference values had dealt a severe psychological blow to our society. Social ills, corruption and crime all strengthened their hold. The demographic crisis also worsened. The birth rate fell and the death rate rose” while

“Wealthy Russia had become a land of impoverished people”.

“It was in these conditions that we began to draft and implement our plan, our plan to extract Russia from this systemic crisis. Above all, we began work on restoring constitutional order, restoring people’s basic social guarantees, and strengthening the state institutions”

Implementation of counter-measures

“Our guiding principle was that Russia’s recovery could not be carried out at the expense of the people and at a cost of even further difficulties in their lives. People had already gone through too many hardships and trials in the 1990s”.

Territorial integration

Separatism and terrorism were delivered “a crushing blow” and Chechnya, through a free and fair democratic process, is now fully integrated in the Russian Federation, forming a “common legal space”. Social and economic development responsibilities have been transferred to the regions in a pragmatic and systematic decentralization process and Russia has been rid of important decisions being taken by those with interests in commodities and monopolies.

“Not only have we once more become a united country, but throughout these years we have worked purposefully to develop federal relations”.

Economic recovery

Since 2000, total investment in the Russian economy has risen seven-fold. Capital outflow rose from 10 to 25 billion USD from 1991 to 1999, while from 2000 to 2007, the situation was reversed to an inflow of 82.3 billion USD.

The values traded in the Stock Market increased from 60 billion USD in 1999 to 1.330 trillion USD in 2007 while in the same period, stock market capitalization increased by 22 times. Foreign trade turnover rose five-fold. In 2007, GDP growth was at a record high of 8.1% and on purchasing parity basis, Russia is ahead of Italy and France and one of the largest seven economies, substantial reserves of currency have been accumulated, while the state debt is now only 3% of GDP, one of the lowest ratios in the world. Unemployment and poverty have decreased two-fold, real incomes and pensions have increased by 2.5 times and last year, the birth rate showed a marked improvement, registering the fastest growth rate in the last quarter of a century.

“All of these figures are evidence that Russia has entered a new era as a modern state that is open to the outside world, and open too to business and fair competition”.

Long-term vision for the future through to 2020

Vladimir Putin stressed, however, that there remains much to be done and was peremptory in outlining the most pressing needs:

“Although we have had some successes over these last years we have still not yet succeeded in breaking away from the inertia of development based on energy resources and commodities”.

Tracing his vision for an embitious programme for Russia’s future development, Vladimir Putin stressed the need to give Russia the best energy sector in the world, while creating high-tech enterprises in the mining and processing sectors, following a path which optimises one of Russia’s greatest assets: its human potential.

Human potential

“Human development is the main goal and essential condition for progress in modern society. This is our absolute national priority now and in the future”.

To become a world leader in social and economic development, Russia needs large-scale investment in its human capital. For this, it is essential to develop the national education system, providing the basis for consolidation Russia’s great potential in the scientific area, turning around a situation whereby Russia has the third highest number of scientists, is one of the world leaders in spending in the sciences but far from the top of the list in terms of results.

Together with the educational area, business and the private sectors must be encouraged to invest in research and development.

Regarding the public health sector, Vladimir Putin described the fact that half the men in Russia do not live to the age of 60 as a “disgrace” and aims to stabilise the population over the next three to four years, reducing the death rate by 1.5 times and increasing average life expectancy to 75 by 2020.

“This requires us to exempt from taxation as much as possible companies’ and citizens’ spending on education, medical insurance, and co-financed pension schemes”.

For Vladimir Putin, Russia “must be the leader in encouraging talent and success.

All who want to work should have the chance of earning a decent wage, and the chance too to save enough money to maintain their standard of living after retirement”.

Economic policy

“The Russian economy’s biggest problem today is that it is extremely ineffective. Labour productivity in Russia remains very low”.

For the Russian President, the priority is to achieve at least a four-fold increase in the main sectors of the Russian economy by 2020. “This also calls for strengthening and expanding our natural advantages. We need to develop the basic sectors of our economy, including natural resources processing, and we need to make use of our energy, transport and agricultural potential”.

For this, it will be necessary to implement a large-scale modernization process of production facilities, a new quality of management, new technology and equipment, not forgetting the need to invest in environmentally friendly processes. For President Putin, industries which will be able to compete globally will bring added value to the Russian economy and he highlighted the areas of “aircraft manufacturing, shipbuilding and energy....information, medical and other new technology”.

Vladimir Putin indicated three key areas for future social and economic planning:

Equal opportunities for everyone, the creation of motivation for innovative behaviour and an increase in the effectiveness of the economy, raising labour productivity.

Red tape and decision-making processes

For a successful implementation of these policies, it is necessary to upgrade a system which “is weighed down by bureaucracy and corruption and does not have the motivation for positive change, much less dynamic development”. The President pointed out that the Government “takes months and even years to take even the most elementary decisions” while it “should be the centre for coming up with the ideology and the strategic plans”. Due to the fact that the public sector employs 25 million people – a third of the labour force – “We must therefore work in constant and purposeful fashion to improve performance in the public sector, which forms the backbone of the state as a whole”.

Regional integration policy

“Today we see increasing social and economic disparity between the different regions, and there are more regions at the bottom of the scale than at the top. The disparity between regions for most of the main parameters is phenomenal, in some cases a dozens-fold gap”.

President Putin’s vision for the future includes “a new stage in regional policy aimed at ensuring...real equality between the different regions”. In this process, he stressed the need for political parties not to forget their “immense responsibility”.

Global strategy

“It is now clear that the world has entered a new spiral in the arms race. This is does not depend on us and it is not we who began it. The most developed countries, making use of their technological advantages, are spending billions on developing next-generation defensive and offensive weapons systems. Their defence investment is dozens of times higher than ours”.

While Russia has lived up to each and every one of her commitments under the CFE Treaty and other international security agreements, NATO partners have not only failed to ratify agreements, failed to honour their agreements, expand eastwards and place military structures on Russia’s doorstep, while not providing realistic explanations when asked to.

“There has been a lot of talk on these matters, but it is with sorrow in my heart that I am forced say that our partners have been using these discussions as information and diplomatic cover for carrying out their own plans. We have still not seen any real steps to look for a compromise. We are effectively being forced into a situation where we have to take measures in response, where we have no choice but to make the necessary decisions”.

To counter these trends, Vladimir Putin proposes to upgrade Russia’s weapons systems, providing equipment which is second to none, exploring the areas of bio-, nano- and information technology in systems, while being careful to bring military spending in line with Russia’s possibilities and making sure that social and developmental vectors do not suffer as a result.

“Our choice is clear. Russia is a reliable partner for the entire international community in resolving global problems. We are interested in mutually beneficial cooperation in all areas – in security, science, energy, and in tackling climate change”.



Source: Speech of President of the Russian Federation Vladimir Putin at Expanded Meeting of the State Council on Russia’s Development Strategy through to 2020, Moscow, the Kremlin, February 8, 2008