Address to the Federal Assembly 2011-12-22 13:00:00 The Kremlin, Moscow In particular, Dmitry Medvedev proposed a number of initiatives to further develop the country's political system. In addition, the President outlined his position on the main directions of domestic and foreign policy, economic modernisation and social development, defence and security. * * * President of Russia Dmitry Medvedev: Citizens of Russia, State Duma deputies and members of the Council of Federation, Yesterday, the State Duma of the sixth convocation held its first meeting. I congratulate all the deputies on the start of their work. I wish you every success and would like to assure you of my openness to dialogue on all issues. Following the parliamentary elections in Russia, various statements were made regarding their results, both in Russia and abroad. Some people were pleased with the elections’ results, others were not entirely satisfied, and still others were not happy at all. It was the same after the previous elections. This always happens. I would therefore like to stress that we treat any criticism of state institutions and individual officials with the utmost attention and respect. We draw relevant conclusions where criticism is valid, restore justice where laws had been broken, take the necessary decisions in consultation with the main political forces, openly state our position and justify it if the criticism is unfounded. People have a guaranteed right to express their opinions using all legitimate means but attempts to manipulate Russian citizens, to mislead them and incite social discord are unacceptable. We will not let instigators and extremists involve society in their reckless activities, and we will not allow foreign interference in our internal affairs. Russia needs democracy, not chaos; it needs faith in the future and justice. The fact that society is changing and people are increasingly expressing their views and making legitimate demands on the authorities are a positive sign, a sign of a maturing democracy. In my view, this is a positive trend that will benefit our country, just as increased political competition, which forces us to work more efficiently and to respond more promptly to the problems of millions of Russian families. Today I will state my proposals for the near future aimed at expanding people’s opportunities to influence Russian state policy and the decisions on matters that involve their rights and interests. But first, if I may, I would like to talk about the results of our efforts. I am sincerely grateful to those who have given their support to my work as President of Russia in the past four years. Bear in mind that the start of my term in office coincided with a very difficult period. Everyone remembers the events in South Ossetia in August 2008. Just a month later we faced the most severe global financial crisis. This has left a serious mark on all of our work. The problems generated by the crisis have remained unresolved to this day in many countries. I would like to name our most important achievements of this challenging period and the main results. First. We have successfully overcome the most difficult period of economic turmoil and returned to pre-crisis indicators. The economy is growing rapidly: by 4% per year, which exceeds the recovery rate in most leading economies. Russia’s sovereign debt remains at a minimum. Our country has become the sixth largest economy in the world. We have fulfilled our social obligations in full. Pensions and wages of most public sector employees grew faster than we had planned before the crisis. Today, there are no pensioners in the country whose incomes are below the regional minimum subsistence level. The average size of the retirement pension has increased by over 50% in the past four years (and this is growth in real terms) and the average salaries of teachers and doctors have approached the regional average. This year, we had the lowest inflation in the history of the new Russia. It is less than 7% and may even be closer to 6%. Salaries, social benefits and real incomes are the highest since the Soviet period, although they are still far from our targets. There are too many low-income families in the country although in 2011 their number came close to the lowest in 20 years. The economic crisis has clearly shown that setting aside a part of the oil revenues to make reserves has been and remains a successful policy. Due to these savings the Government and the Bank of Russia prevented a currency crisis. Now the volume of gold and foreign currency reserves is close to the pre-crisis level, while people’s bank deposits have increased by almost 80%. Lending volumes have also grown. We have provided strong support to manufacturing, construction and infrastructure companies, as well as small businesses. Big companies received funding on the basis of a detailed analysis of development programmes and their readiness to preserve and create jobs. Agricultural producers also received systemic support. This has allowed the whole industry and the food market to fully recover last year’s losses caused by the drought and wildfires. The number of unemployed in the past two years has decreased by almost two million people. Today, the unemployment rate in our country is one of the lowest in the world. Overall, Russia’s anti-crisis policy has been more effective than in many other countries or in previous crises, of which, as we know, there were many. I think we passed this difficult test with flying colours. Second. We have ensured full implementation of demographic programmes, which became one of the factors in demographic stabilisation. More than 6 million children were born in Russia over the past four years – and that is an excellent figure, a 20-year record. The mortality rate declined even faster than we initially expected. Modern Russia has the highest life expectancy in its history. It has increased by almost three years since 2006 and has reached just under 69 years. Life expectancy for women – because they take better care of themselves – is nearly 75. We had never had such figures before. Never! Naturally, we must strive to make these numbers even higher. That is the aim of the new healthcare modernisation programme. All the decisions required for its implementation have already been taken. Third. A key theme of my Address last year was the policy on motherhood and childhood. A great deal has been achieved in this area. By the end of this year Russia will have 23 perinatal centres. We poured enormous resources into the development of paediatric services. Medical examinations of schoolchildren will now be held throughout the school years. Another hour of physical fitness has been introduced in the school curriculum. A law has been adopted that allows for the use of maternity capital for private housing construction. 38 regions have decided to pay an additional regional maternity capital, as I told you here a year ago. The regions are entitled to provide free of charge municipally-owned land plots to large families. The tax on charity donations to individuals has been abolished, including assistance to children. Commissioners for children’s rights have been appointed and begun to actively work in almost all regions. Public councils are set up at institutions for children who have no parents or guardians, which help address these children’s problems more promptly. Fourth. At the peak of the economic crisis, I initiated a shift in Russia's development strategy: the modernisation of our economy. I am sure it was the right decision. Today we can see the initial results in all priority areas of modernisation: we have achieved the highest level of funding for research and development since the Soviet times, built an efficient system of development institutions and gradually decreased the energy intensity of the Russian economy. This means – and I want everyone to stop and think about it – that the share of the utilities costs in family and company budgets will eventually stop growing, and if energy is used rationally, it can even be reduced. We have launched production of new drugs, including for the treatment of infectious diseases and cancer. An entire line of next generation products has been developed together with our foreign partners. We have created supercomputers supporting new competitive technologies in the nuclear and aerospace industries, shipbuilding and automotive industries; completed the development of technical documentation for the construction and operation of a new generation nuclear power station that will be highly resistant to external shocks, as well as have significantly higher economic efficiency rates. Half of Russian regions already use the services of the GLONASS navigation system and are implementing remote sensing projects. The number of home broadband Internet connections has doubled in the past three years and now the country has nearly 55 million active subscribers. I want to emphasise that this is the highest figure among all European countries. Television and radio networks are switching to digital broadcasting. This increases the freedom of choice and stimulates competition. As promised, Russia will have more than 20 freely available TV channels by 2015, and the number of channels offered by private broadcasting companies can be measured in hundreds. A few words about another major modernisation project, the Skolkovo Innovation Centre. I am aware that there were many sceptics when we launched this project, and there are some that remain to this day. But what do the facts tell us? Skolkovo corporate residents include over 300 companies engaged in advanced research and development. A modern technological university is being built, partnership agreements have been signed with leading global companies, which are setting up their research centres at Skolkovo. This is only the beginning but I'm confident that Skolkovo will become an example of the first successful global project in science, education and innovation in 30 years; the first but I'm sure it will not be the last. Fifth. The political system’s modernisation has made it more efficient. I would like to remind you that I have suggested measures for its development every year in my Addresses. All these measures have been implemented, and I would like to thank the Federal Assembly for it once again. Yes, we have improved the quality of popular representation and stimulated the development of political competition. Over the past few years the role of political parties in our country has increased. They have obtained the right in case of winning the elections to the region’s Legislative Assembly to submit their nominations to the President for the post of the highest regional official. The parties were given the authority to implement supervision functions. Now, the Government makes an annual report to the State Duma on its efforts. In the regions senior officials report to the legislatures. At the local level, the practice of reports of municipal entities’ heads to representative bodies has been made mandatory. The mechanism of removing municipal officials from office has been introduced. The parliamentary parties have obtained guarantees of equal coverage of their activities in the state media. Meetings of the State Duma and regional legislative assemblies are being broadcast live online. This certainly increases the openness of the parliament’s work and allows the parties to inform the voters of their positions online. In order to ensure the rights of political parties not represented in the legislature, they have the opportunity to make regular appearances in the State Duma and regional parliaments. The new procedure for forming the Council of Federation, which came into effect this year, should also be viewed in the context of expanding popular representation. Now only the people who have won federal, state or municipal elections will be able to sit in the Upper House of Parliament. Finally, the electoral threshold in the State Duma elections has been decreased to 5%. Sixth. Our civil society has become stronger and more influential; public organisations have significantly increased their activities, as was confirmed by the events of recent weeks. I believe an increase in non-profit organisations’ activity is a key achievement of recent years. We have done a great deal in their support, as well as for the development of volunteer movements in the country. Today Russia has over 100,000 non-profit organisations. The registration procedure has become far easier for them, and the inspections of non-profit organisations have been significantly reduced. Many of them receive direct assistance from the state. Annual charity donation volumes are now close to 100 billion rubles. Millions of people take part in volunteer initiatives, getting involved in landscaping, providing social assistance to families in difficult situations, searching for missing persons, protecting the environment and many other useful initiatives. All this deserves our respect and benefits our homeland. Seventh. We have made considerable progress in reforming the judicial system, particularly criminal legislation, making it more just, humane and corresponding to our social development goals. At my initiative, the Federal Law on Amendments to the Criminal Code has been adopted. In line with these amendments, the sentence of imprisonment for a first-time offender who has committed a minor crime can be imposed only in the presence of aggravating circumstances. The list of alternative penalties to imprisonment has been greatly expanded. These include multiple fines, correctional and compulsory labour. The courts are increasingly granting bail and placing defendants under house arrest. In addition to the relaxation of many Criminal Code provisions, criminal responsibility has been increased for grave and especially grave crimes such as terrorism, aiding and abetting terrorism, child abuse, sexual abuse of minors and other violent crimes. Finally, we have launched a law enforcement reform, which opened the doors to a large number of professionals who actively protect the rights and legitimate interests of our citizens. Eighth. On my instructions, a large-scale anti-corruption effort is being conducted. Russia has acceded to international conventions in this sphere and adopted the required legislation for the first time in the history of our state. Now, state and municipal officials who have been found guilty of corruption offences can be dismissed from office for the loss of confidence, in addition to other forms of punishment. Since 2010, all state officials, military personnel and law enforcement officers must declare their incomes and assets. The information contained in the declarations is verified and the results are analysed by special commissions. As a result of this work, more than 3,000 officials have been prosecuted just in the first six months of 2011. I would like to stress that this is only the beginning of this massive and systemic war on corruption and we will fight it vigorously, systematically and consistently. Ninth. As part of my decision to actively upgrade our Armed Forces, the troops were equipped with modern equipment and weapons. We have begun the transition to the professional army. As early as next year 220,000 officers and over 180,000 soldiers and sergeants will serve under contract. The state armament programme to 2020 places the emphasis on new weapons and equipment created with the use of modern technology. A large part of the state defence order is placed for several years ahead. This significantly improves the opportunities for defence companies’ development. In turn, they must do their work well and on time. Despite the challenges of the crisis, we have taken steps to make our army and navy more compact, mobile and combat-ready. By 2010, the number of troops amounted to one million people and it became possible to build truly modern and effective Armed Forces. A new high-tech arm has been created, the Aerospace Defence Forces. The intensity of the operational and combat training has increased significantly. Until recently, most of the exercises were held at the headquarters or on the maps, while now strategic scale exercises are held annually, involving all types and kinds of troops. We have achieved significant results in improving the social guarantees for military personnel. On January 1, 2012 their pay will increase by almost 200%. This will make a qualitative change in the Armed Forces. Officers will have additional motivation to serve honourably. The financial situation of retired military personnel will also improve. The rise in military pensions from January 1, 2012 by not less than 1.6 times on average is an important step in showing appreciation for their service to the fatherland. These pensions will increase annually by at least 2% above inflation. Finally, for the first time in the history of our country’s Armed Forces we have come close to tackling one of the toughest and most critical challenges: providing servicemen with permanent and service housing. In 2009–2010, the Defence Ministry acquired nearly 100,000 flats to provide permanent housing, and in 2011–2013 another 80,000 will be acquired for this purpose. Those who signed their contracts after 2007 will be scheduled to receive housing in line with the savings and mortgage system. The number of participants exceeded 180,000 people in five years, and 20,000 flats have been purchased. By 2014, a specialised service-housing fund will be established for the stuff numbers stipulated for the new Armed Forces. Thus, the military housing problem will be resolved completely. Tenth. Our foreign policy has become more modern, working for the national modernisation goals. Breakthrough results have been achieved in the integration processes with former Soviet states. From July 1, 2011 the Customs Union of Belarus, Kazakhstan and Russia came into force, and more recently an Agreement on free trade zone was signed within the framework of the CIS and will start operating next year. I am very pleased that together with our colleagues we have been able to finally move forward on these major tasks. I would also like to emphasise a very practical aspect. As a result of removing the barriers to mutual trade, the market for the free sale of Russian products expanded by 20%, according to experts’ conservative estimates. The volume of trade within the Customs Union has increased by one third. A competitive environment is being formed in its member states’ markets and new jobs are being created. The transit potential is used more efficiently. Businesses have better conditions for entering international markets. We will continue economic integration. Common Economic Space for Russia, Belarus and Kazakhstan will be launched on January 1, 2012, and the free movement of goods will be followed by the free movement of services, capital and labour. The aim is to create the Eurasian Economic Union by 2015, which will largely determine the future of our countries. We have Partnership for Modernisation agreements with 23 EU countries, as well as contracts for dozens of projects. We have stepped up joint efforts with the EU on easing visa restrictions with a view to their complete abolition. Finally, another very important achievement: after 18 years of negotiations, Russia has acceded to the WTO. The negotiations marathon ended on terms that fully correspond to our country’s interests. Now we must learn to work in this organisation, drawing the maximum advantages from its membership. WTO accession is a significant factor in Russia’s integration into the global economy. It meets both our national interests and the objectives of stabilising the international trading system. One of the most important breakthroughs in the field of international security in the recent years is the conclusion of a new Russian-US Strategic Arms Reduction Treaty. It works directly on strengthening strategic stability and non-proliferation. In addition, our initiative to conclude a treaty on European security initiated a serious dialogue on the establishment of a new architecture of equal and indivisible security in the Euro-Atlantic region. On the whole, we have achieved a great deal. The past years can be considered successful, and some of the achievements are unprecedented. Once again I sincerely thank all those who have actively supported my plans and initiatives. I believe that our efforts on economic modernisation and upgrading the life of our society should be the main tasks for those who will govern the state in the coming years. Colleagues, now let us move on to the practical aspects of our country’s modernisation. I would like to start by telling you what I, as President of the Russian Federation, intend to achieve in the coming months. First. Today, at the new stage of the nation’s development and in support of the new initiative put forward by Prime Minister Vladimir Putin, I propose a comprehensive reform of our political system. I would like to say that I hear all those who talk about the need for change, and I understand them. We must give all active citizens a legitimate opportunity to participate in the country’s political life. To achieve that, I believe the following measures are necessary. To return to direct regional elections for the heads of Russian constituent entities. To introduce a simplified procedure for the registration of political parties. My suggestion is that it should require an application signed by at least 500 people representing no less than 50% of the regions. Next. To abolish the requirement to collect signatures for the elections to the State Duma and regional legislatures. Finally, to reduce the number of voter signatures needed to participate in the presidential elections to 300,000, and for candidates from non-parliamentary parties to 100,000. In addition, I propose to change the State Duma election system. I consider it expedient for strengthening the links between the deputies and the electorate to introduce proportional representation of 225 districts. This measure will allow each region to have a direct representative in parliament. Now, unfortunately, as everybody knows, some constituent entities of the Russian Federation do not have a single deputy elected by local residents. I also suggest changing the procedure for forming the Central and regional election commissions. We should have broader representation by political parties in the election commissions. The parties must have the right to recall their representatives in the commissions before term, if necessary. I will soon submit the corresponding draft laws to the State Duma. Colleagues, this is not the final list of initiatives. But let’s be patient. Ancient Chinese philosopher Lao Tzu once said that governance must be consistent, business must spring from opportunities, and all actions must take time into account. Nevertheless, we will take additional necessary steps in the future. I suppose that the measures already proposed will make our nation’s political system more efficient, better able to meet the needs of our citizens. These changes are particularly relevant ahead of a very important political event: Russia’s presidential elections. The elections must be just, transparent, and meet modern standards for lawfulness and fairness. Second. A package of draft laws on decentralisation will be submitted to the State Duma. Their implementation will allow us to seriously redistribute powers and budgetary resources in a way that favours our regions and municipalities. I promised to do it, and I will do it. It is time to bring the government’s most important functions closer to the people they serve. Naturally, we will do this step by step, over the course of several years, within the framework of the next political cycle. The sources of revenue for regional and municipal budgets, including their own, will be expanded significantly. We will discuss the budgets’ volumes separately, but I feel the figure may be as high as one trillion rubles. This should create the conditions for our territories’ successful development, for better fulfilment of the state’s obligations to the people. In particular, we will gradually abolish federal exemptions for regional and local taxes. The timeframe for this should be analysed by the Cabinet separately. Many regions will impose real estate tax instead of property tax. In addition, regions and municipalities must be given much broader rights in managing the funds coming from the federal budget. Excessive regulation, which impedes independent work on a local level, will be eliminated and the system of financial support for regional budgets will encourage the diversification of the regions’ own revenue base. Finally, regional heads will get the right to bring up the issue of delegating a significant number of public powers from the federal to the regional level – if they are ready for it, of course. At the same time, some of the powers may be additionally given to all regions by a federal law – first and foremost, those powers that directly influence the investment climate and socioeconomic development of those regions. At the same time, we should seriously strengthen the material base of municipalities, of local self-government as an institution closest to the people. Municipalities must get a solid and predictable financial base for their work. There will also be other changes, which we will discuss in the coming months. And it is certain that the process of power decentralisation will go hand in hand with higher political liability of regional and municipal leaders as regards the final results of their work on developing their territories and increasing the quality of services offered to their citizens. Third. During the first half of next year, we must replace our “beloved” 94th law with a federal law contemplating the creation of a federal contract system. New procedures for government and municipal procurement must ensure high quality in the fulfilment of government orders and prevent monopoly price-setting and multi-billion ruble corruption schemes. In order to further counter corruption, I feel we should start monitoring spending by individuals holding public office or serving within certain federal state services, in cases when their expenditures clearly do not correspond with their income. I am talking about declaring major expenditures for purchasing land, other real estate, vehicles and securities. By introducing this provision, along with larger fines established by our criminal legislation, possibility of being dismissed on a loss-of-confidence basis for corruption-related violations, and other existing measures, we are essentially implementing the goal of the UN Convention against Corruption as regards establishing liability for unlawful enrichment. And this liability is established in accordance with the principles of our legal system. I also feel we should look into broadening the list of individuals whose incomes are subject to declaration. In addition, we need to think about how to radically reduce the economic interest in committing profit-motivated crimes, in addition to already-existing measures (I am referring to larger fines and confiscation). Finally, I think it would be expedient to impose restrictions on transactions between state institutions and profit-making organisations whose major shareholders include close relatives of the heads of such government institutions or state-owned companies. The number of cases like this in our nation is enormous. Fourth, we are in the final stage of a full-scale transfer to electronic document management system as regards carrying out state functions and providing public services to our citizens. Beginning on July 1, 2012, all regions and many municipalities will switch to electronic interdepartmental interaction. We are expanding our citizen’s opportunities to receive many state and municipal services remotely, including through the use of a corresponding Internet portal and with the help of universal electronic cards. In just a few months, millions of people from all across our nation, from the most distant of our regions, will start using them. It will be easier for citizens to communicate with the government in real time and to save time and money, in addition to the fact that electronic technologies provide the best level of transparency, which is essential in countering corruption. Fifth. Soon, we will begin implementing programmes I have initiated to support families with three or more children, as well as teachers, doctors, young engineers and scientists. They must have better opportunities to improve their living standards with the help of a preferential mortgage. Sixth. One of the important challenges for all government agencies and for society as a whole is the full-fledged implementation of the Barrier-Free Environment programme. I would like to point out that we have allotted a significant amount of funding for its implementation. Step by step, we will reduce barriers for people with disabilities; we will work on helping them get jobs and significantly improve the number of schools providing inclusive education. Our attitudes toward people with disabilities, the efforts we are making, are imperative for reducing the barriers and restrictions in their lives and opportunities. This is important for all of us, for all of society. Seventh. We will implement all plans as regards public sector development. In particular, in 2012, we will step up work to deal with the shortage of places in pre-schools. For children aged 3+, I think we can fully solve this problem in the next five years. At the same time, we must not just resolve it, but do so while increasing the salaries for teachers and educators working with children. We will also continue to increase salaries for schoolteachers. At the same time, we must give particular attention to improving the situation on a regional and local level at cultural institutions that work directly with children – I am referring to art schools, museums, clubs and libraries. They are facing difficulties, and the Government must help the regions implement programmes in this area. Eighth. The government will take additional measures to encourage placement of orphans in foster families. I will give relevant instructions to the Government in the next few days, and I also think that the regional heads must adopt programmes to provide medical, psychological, and educational support for families taking in orphans. They need help, and such help must be practical. In addition, every region must finalize the development of social adaptation programmes for youth coming out of orphanages. Let me remind you that in many territories, this instruction has not yet been carried out. Ninth. On further steps regarding criminal law and judicial proceedings. In the first six months of next year, draft laws will be prepared to help form a social rehabilitation system for citizens who have finished serving or are currently serving penalties that do not involve imprisonment. A special role in conducing efficient criminal policy must be given to the judicial system. It determines whether our system for imposing penalties becomes more flexible, graded, and therefore, more just. We will continue working to improve the quality of the judicial corps. And one of the first steps is to create a system of independent examination commissions, which will assess all candidates for the high office of judge. The number of judges per capita in our nation is about the same as in most European nations. But remember, Russian judges look at far more cases, dozens times more, primarily because nearly 80 per cent of disputes in these nations are resolved with the help of reconciliation procedures, as was the case, incidentally, in pre-revolutionary Russia. Unfortunately, at this time, we have practically no culture of holding a dialogue and finding mutually acceptable solutions. The laws we have passed on mediation barely work at all, and cases when an agreement is reached are still rare. We need to make our citizens better aware of the option to resolve disputes with the help of a qualified mediator, and to consider the expediency of implementing the mandatory use of mediation procedures in resolving certain types of conflicts. And tenth. Two months ago, I suggested expanding beyond the framework of our established institutions and creating an extended, or perhaps more accurately, open government, aimed at resolving strategic and operative tasks by uniting all levels and branches of power, public figures, experts, and everyone who is prepared to participate in the processes of really running the state affairs, to contribute to the development and expert evaluation of the most important decisions and programmes. This kind of open government is, in essence, a social lift for the most active and talented people, a talent pool for renewing and reinforcing executive government in the centre and in the regions. We have already launched the rotation of civil servants. The talent pools created in our nation encompass nearly one hundred thousand individuals. That is a large number. More than 200 people from the presidential talent pool created at my suggestion have been appointed to higher positions. But to be frank, this work needs to be done more consistently and more actively. Finally, an open government is an effective way to get feedback that allows us to assess the efficacy of government policy, to build the work of the government in a fundamentally different way, to make it modern, relying on local initiatives. Eisenhower once said that the slogan of a true democracy is not “Let the government do it,” but “Let’s do it ourselves.” I absolutely agree with these words. These mechanisms will begin to function in just a few weeks. And at the first stage this will happen within the framework of a special temporary group, a body created to serve these purposes. One of the first projects will be a public contest to identify the most pointless, suffocating bureaucratic procedures. Hopefully, we will have a corresponding website up at the start of the new year. I would like to now address everyone who has encountered these procedures: please tell us about them, if you feel they are detrimental to normal life and the full-fledged development of our nation. Decisions will be made to eliminate or adjust certain procedures on the basis of your suggestions; we will also be making personnel-related decisions where necessary. Overall, I believe we should use all modern information technologies to improve public communication. I am giving this my utmost attention. We need to use everything we have, and create the things we don’t have. So I suggest we work on creating public television in the near future, possibly on the basis of one of the existing federal channels. In this case, none of the owners of this new type of media will have a determining influence in making any decisions – neither the government nor the private owners. I am certain that this kind of public television can make our information environment more competitive and therefore more interesting. Colleagues, I have listed the challenges I will focus on in the upcoming months. Our citizens’ choice will determine what our federal and executive authorities will look like in the subsequent period. This is an important election that will decide our common future, particularly given the difficult situation unfolding around the world. You know, the financial turmoil has already resulted in a decline of the leading nations’ financial capacity and a sharp slowdown in their growth rates. Fears about the main reserve currencies and concerns regarding the position of transnational banks currently have a greater influence on investors than the situation in the real economy. It is true, there is the developing world with a big share of the planet’s population, and this developing world continues to grow; but it cannot fully compensate for setbacks of the global economy’s former powerhouses. Thus, there are many politicians, heads of international organisations, leading economists and businesspeople who are talking about the onset of a global depression. Friends, it is obvious that difficult times are ahead of us. I have already said that our nation withstood the test of the crisis admirably. The present team managed these trials. I hope we will overcome the new challenges as well, regardless of who becomes the President of Russia or the Prime Minister. There is a set of absolute priorities that the nation’s leaders will pursue in order to ensure its successful development. Incidentally, I was once again reminded of this during the election campaign, when I spent a particularly great deal of time talking to people; I came to a number of conclusions which strengthened my conviction that our choice of strategy and modernisation was the right one. Let’s see: clearly, the greater our achievements, the more acutely we perceive the problems which have not been resolved. The more successful our society is overall, the more clearly we see displays of poverty, unlawfulness, and injustice. People have grown tired of lacking the opportunity to resolve the most critical problems within a reasonable time. People are sick of their interests being ignored, or sometimes not even noticed at all. It is unfair when thousands of families essentially live in barbaric conditions, lacking the simplest housing services and utilities, when children from distant villages cannot receive a normal education, when people do not have the opportunity to reach places where they can receive high-quality medical assistance or other modern services if they do not have the means to find a decent job, and often, they don’t have prospects for finding any kind of job at all. It is unacceptable when entrepreneurs and investors in most regions spend months fighting their way through bureaucratic barriers and at every step they find themselves at the mercy of officials’ arbitrary rule, including those officials who lobby in the interests of their competitors. Finally, our citizens are suffering from unjust decisions and the ineffective performance of judiciary acts. I repeat: all these problems exist, but we are aware of them and know how the future leaders of our country should deal with them. What do we need to do? First, Russia must create the broadest possible opportunities for the operations of small and medium-sized businesses. This would allow us to benefit from innovation and create millions of new high-performance jobs, to attract private, including foreign, investments for the creation of a modern industry, high-performance agriculture, so-called smart infrastructure, housing, and the service sector. I would repeat what I have already said more than once: improving the business climate is the best way to ensure dynamic economic growth. There is no better way! I consider maintaining macroeconomic stability crucial to being able to successfully achieve these goals. With high inflation and interest rates, our goals would simply become unattainable, so we have to maintain low levels of budget deficit and public debt. The government’s financing commitments should be met primarily through income received from high rates of economic growth, the improvement of tax and customs administration, as well as the full implementation of the programme designed to privatise government assets. Inflation and interest rates must come down to more acceptable levels through the development of competition and the reduction of associated legal and financial risks. This is necessary both for the development of our financial system and the creation of an International Financial Centre in Moscow, something that we have been working on lately. Just as during the crisis three years ago, neither the Central Bank nor the Government have the right to tolerate disruptions in the foreign exchange market or the banking sector. For that reason we must all continue to live within our means and not fritter away our financial resources, especially in the light of the coming global recession. However, our intention to live responsibly does not mean that we should abandon new social programmes, or even reduce existing benefits. All these commitments will be kept in full. This applies to pensions, measures to support families with children, healthcare, creating a barrier-free environment for disabled people, as well as the development of education and culture. Along with this, we need to determine the long-term development strategy of our pension system as soon as possible. I think we need to give citizens the opportunity to choose when to retire, based on the expected pensions to salaries ratio, and as soon as the crisis is over return to more actively encouraging voluntary retirement savings. We must implement programmes to modernise healthcare in all Russian regions. New legislation on healthcare will allow us to determine the guaranteed volume and quality of health services. And when allocating resources to this issue we need to improve the material base of healthcare facilities and to increase the salaries of medical personnel. At the same time, our entire society must make every effort to ensure that a healthy lifestyle becomes the norm. We need to continue implementing our national initiative: Our New School. Our priorities for the coming years are the comprehensive development of a new system for searching out and supporting young talents, a transition to a practice-oriented education model in middle and high school, and the transformation of schools into the central focus of multiple lives, not just places where children are taught. It is necessary to train a new generation of teachers who have all the skills required by modern pedagogy and receive a decent wage for their work. We must correct another extreme condition or situation in higher education which has developed over the past 20 years. Unfortunately, in that field the trend remains, not classical or research universities, strong universities, but rather hundreds of third-rate institutions. We need to continue building a network of modern universities which meet international standards both in terms of the quality of education on offer and the level of research conducted. We must purposefully work at ensuring a cultural revival. This may be one of the main factors in Russia’s modernisation. We must support both traditional schools and new projects in all artistic fields. We must pay special attention to upgrading infrastructure in the cultural spheres, using modern technologies, as well as increasing the salaries of those who have dedicated themselves to this important cause. Currently, the average wage in this sector is only half that of the average monthly wage in the economy in general – this is both unfair and completely shortsighted. Along with this, our cultural heritage should be as accessible as possible to children. Familiarity with the finest examples of the art world and, of course, independent creative work should be part of the educational process. But while there are numerous such opportunities in big cities, small and medium-sized ones require special support. Harmonising interethnic relations within our country remains an absolute priority. Russia is inhabited by representatives of more than 180 peoples that speak 239 languages and dialects. This multicultural world is also Russia’s unique advantage, a world in which representatives of different nationalities and faiths have lived together for more than a thousand years. In general, our society does not support extremism and other ideologies which are founded on hate. The scholar [Dmitry] Likhachev wrote: ”Nationalism is a reflection of a nation’s weakness, not its strength.“ This is a profoundly correct remark. But a significant tension between international and internal migration remains to this day, especially in large cities. Sometimes it results in ethnic hatred and conflict. We need to address the economic foundations of large-scale internal migration, and of the concentration of emigration in some Russian regions. We should create the conditions for the rapid development of areas that are currently losing population. In addition, we must pay more attention to our children’s cultural and moral education, and in fact teach them mutual respect and tolerance just as grammar or history are taught in school today. This is necessary in order to save our country. And naturally, we must be consistent and uncompromising in our fight against all forms of extremism and crimes aimed at inciting ethnic hatred. Let me stress that this work remains a constant priority. Dear colleagues, over the next decade our Armed Forces must be significantly upgraded. I just talked about the very important decisions taken regarding pay increases for troops and service housing. By 2020 at least 70 percent of Russia’s army should be equipped with new weapons and high-tech military equipment. A modern, well-equipped army would imply a consistent reduction in the number of conscripts and replace them with professionals who work on contract. By 2017 these professionals should number 425,000. Russia's foreign policy should be dictated by its geopolitical situation, the need to ensure our national security, and our partnership with other countries in the interests of our citizens. Not very long ago I spoke about our fundamental approach to the problem of missile defence. I will not go into detail about it again – everyone knows my opinion. I would just like to confirm one thing, namely that we are open to constructive dialogue and substantive work with our partners, if they are ready to listen to us. And we expect that they will take steps in our direction in order to achieve a mutually acceptable solution as soon as possible, as well as to preserve an atmosphere of trust. We look forward to continuing discussions and work on a new European Security Treaty. We are interested in finding mutually acceptable solutions to all crucial outstanding issues on the international agenda. Thus, one of our constant priorities remains overcoming the effects of the global crisis. It is our shared priority. It remains extremely important to fully implement the decisions made by the G20 concerning the stabilisation of the financial situation of a number of leading countries, and international financial system reform. I will remind you that in recent years I have talked about a range of initiatives in these fields. Specifically, they include the idea of establishing an international mechanism to prevent and eliminate the effects of disasters on the sea shelf, strengthening the international regime governing nuclear safety, the establishment of a new legal framework for energy security, the protection of intellectual property rights in the light of the development of the Internet and, finally, the fight against piracy at sea. We look forward to working together to implement these proposals. Some of them have already been discussed in the G8 format, others in a broader one. I believe that it would be useful to exploit the potential of BRICS countries and the Shanghai Cooperation Organisation to promote them. The events of these past months have demonstrated the relevance of our role as mediator in solving serious regional problems using political and diplomatic means, without foreign interference or the use of force and, of course, under the auspices of the United Nations. Finally, an absolute priority for the coming years is providing an additional stimulus to integration processes and strengthening cooperation with our closest partners. The most important aspect of this work is strengthening allied relations within the framework of the Collective Security Treaty Organisation, especially in crisis situations, including by exploiting the potential of the Collective Rapid Reaction Force. We need to make use of the enormous potential of the Customs Union and, naturally, that of the Common Economic Space that we just created. On a practical level we have decided to take up an ambitious task, namely the creation of the Eurasian Economic Union. This new arrangement will be set up to achieve the maximum benefit from our economies and produce simple, practical, tangible results for our citizens. An important feature of the Eurasian Economic Union is its openness to our partners in the EurAsEC, CIS, and others too. Depending on how ready they are, they can join our work. We expect that this economic union will bring together the European and Asia-Pacific regions, and act as an influential force and prized partner in the global economy. Citizens of Russia, dear friends. All these years I have been guided by one purpose, that of making life better for our citizens, making them feel safer and more confident with regards to the future of their children and grandchildren, and so that the older generation can live a decent life. This is why it was so important to maintain economic and political stability, and so critically necessary to begin our country’s modernisation. But there really are difficult times ahead. The global depression could last for several years and the competition for minds, ideas, and resources will only intensify. Meanwhile, we are at the epicentre of this rivalry. But even in these difficult conditions we have no right to pause our development. Such work will require perseverance, strength and, naturally, time to overcome inertia and a great deal of old stereotypes. And we can only take this difficult path together. It is true that we do not all perceive the world in the same way; sometimes we have very different ideas about priorities. There are different opinions about how to proceed, but at the end of the day we all want one thing, namely a better life for our citizens. Therefore we must learn to listen to each other, respect public opinion, and refrain from imposing top-down solutions. And we must continue what we have begun, continue with renewing our state and society from its depths. That's why I want every one of us to become conscious of the responsibility he or she bears for the way their friends and family live, the success of their own affairs and, by implication, the future of our beloved country. I am fully aware of my responsibility for everything that remains to be done. I believe in each of you and I know that we will succeed.