Vladimir Putin: <…> The spirit of cooperation that has established itself between Canada and Russia over the recent centuries of diplomatic and business contacts bodes well for our partnership. Of course, the main guarantee of success is political and economic stability. This year Russia has made substantial progress in “putting the Federation back again” after a period when, unfortunately, it often looked very much like a decentralised state. I would like to stress, not as a federated, but as a decentralized state.
Putting the Federation back together was behind the creation this year of seven federal districts and behind the efforts to harmonize the laws of the regions with the country’s Constitution.
When I refer to the decentralisation of Russia in recent years I would like to draw your attention to the lamentable fact that about 25% of all the laws and legal acts in the regions of the Russian Federation have been at odds with the Constitution and laws of Russia.
It was of course a major obstacle in the way of the development of the Russian state and Russian business. It made it more difficult for foreign partners to enter the Russian economy. The system of state governance has recently been substantially strengthened and gaps in the common business and economic space have been closed. The result is a measure of political stabilization and consolidation of society that is evident to many.
Today all the branches of government in Russia are interacting very fruitfully, as reflected above all in the activities of the country’s parliament, the Russian State Duma. Order and political stability inevitably lead to order in the economy. The business and investment climate in the country is undergoing major changes. Our country today looks a lot more attractive than several years ago.
This is borne out by figures. I don’t want to tire you with too many figures, but I will cite just some. Gross domestic product increased by 7.5% in the first half of the year. We expect that growth by the end of the year will be at least 7%. Industrial potential has increased by 15–20%, and in some regions industry has grown by 30%. Investments in basic assets have increased and inflation has been cut by more than half. In any case all the macroeconomic targets set under this year’s budget have been met.
The average incomes of Russians increased by 9.4% in ten months of this year compared with the same period of 1999. For the first time the country has a federal budget surplus, and that is not only the basis for sustained economic growth but for settling our relations with the creditors. I am referring, of course, to the creditors of the London and Paris Clubs.
Canada and Russia are the biggest federations in the world. But they have in common much more than the complicated problems that are inevitable in such complicated systems. It is important that our countries have broad opportunities offered by their federative systems. One such economic advantage is economic flexibility because federalism makes it possible to level out the social and economic opportunities of various regions and to provide an equal playing field for all Russian citizens irrespective of where they live. The economic autonomy of the provinces always provides a good testing ground for effective and progressive federal models, and indeed a testing ground for trying out strategic models of national development as a whole. And these are just some of the advantages of a federation.
I am convinced that we have much in common. Above all, the heady prospects for the economic development of our federated systems. It is also important that we are not just aware of our obvious achievements, but we are serious and upfront about our drawbacks. This was highlighted by the results of the roundtable on the problems of federalism held here in Canada. It was attended by practical workers, representatives of government bodies, the heads of Canadian provinces and Russian regions and leading experts of the two countries. I think we should heed their opinion. Such interstate discussions should be regular and should be held both in Canada and Russia.
Russian-Canadian interaction in some spheres is, I think, absolutely unique. Above all, it is the so-called Northern Dimension, the plans for joint development of the Arctic and the North and its social aspect: support of the indigenous peoples of the North, preservation of their cultures, traditions and language. All this is equally important both for Russia and Canada. A number of joint cultural, educational and other humanitarian programmes for small indigenous peoples of the North are geared to that goal.
Another project aimed at developing the northern territories is the Arctic Bridge designed to switch the main cargo traffic between the two countries to the northern sea routes. In Russia it is an effective exercise, which was successfully pursued back in the Soviet times. I am convinced that with the development of the Arctic hub our countries will become much closer to each other, and we have a whole package of promising projects connected with the North.
Increase in mutual trade is another untapped reserve of our cooperation. The existing legal treaties and documents provide a basis for that. Our mutual trade in oil, metals, chemicals, machines and equipment has increased considerably of late. It is in our common interests to make these positive trends stable, to create additional conditions to facilitate the access of goods to the markets in the two countries.
In this connection we are particularly worried about the restrictive measures applied by Canada to Russian steel. We discussed it at yesterday’s meetings with the Canadian Prime Minister and Cabinet members.
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We regard attracting foreign investments as an important factor of Russia’s integration into the world economy. We have been taking vigorous measures recently towards that end. We have made considerable progress on tax reform. The new Tax Code that comes into force on January 1, 2001 sets the lowest tax rates in Europe. I must say that it has been a difficult decision that Russia has long contemplated. The code was eventually adopted only due to the public consensus and the synergy of various non-governmental and political forces in the country. That is clear evidence of the considerable political stabilization in Russia.
We are staunch supporters of the basic principles of Russian policy: protection of the rights of owners and honest businessmen. In fact a whole range of laws aimed at strengthening the legal rights of owners is being prepared. We are taking serious measures to strengthen the judiciary system, which is an inalienable element of a smoothly functioning economic mechanism.
In recent years we have enlarged the regulatory framework for investments. The new law On Foreign Investments in the Russian Federation regulates the activities of foreign investments and guarantees their rights. The regions are implementing their own programmes of government support for foreign investment activities.
In opening up the Russian economy we expect reciprocity from our partners, including at the international financial institutions. I think the process of Russia’s accession to the WTO and the OECD could be more dynamic than it is today. Russia has reason to count on Canada’s support on the issue. I think that if the principles and rules of that organisation are applied in Russia, everyone will gain from it, including our foreign partners.
Integration of Russian business in the world economy addresses the needs not only of our own country. It is in the common interests of many countries which in the context of globalization are jointly seeking new ways of interaction and trying to create a favourable international climate for cooperation. This is the aim of Russian foreign policy. We favour a system of international mechanisms that balances international interests, ensures the integrity and security of the world and helps to solve common problems. We believe that all the key issues should be solved on the basis of international law, through collective mechanisms, in the first place those of the United Nations.
This brings me to the key problem that is uppermost in people’s minds today, the problem of international security. We are convinced that the deployment of a national missile defence and attempts to wreck the 1972 ABM Treaty will result only in a collapse of the whole system of international security. Our concern is shared by many countries and prominent political and national leaders in many countries. Further evidence of that was the open letter I have received from a prominent Canadian scientist, Nobel Prize winner, Professor John Polanyi of the University of Toronto who is present here. We talked briefly with him before this meeting. I take this opportunity to thank Mr Polanyi for his letter. As I see it, it is prompted by concern for security and stability in the world. It provides an absolutely objective and independent analysis. It would not be irrelevant to quote from that letter: “If we start modifying the ABM Treaty, it would weaken the structures of international law on which peace on the planet must be based.” That is an absolutely precise formula that pinpoints the issue.
We see as a real alternative further drastic reductions of nuclear arsenals while preserving the 1972 ABM Treaty and putting into effect the START-2 Treaty which we have already ratified, but the United States has yet to ratify, and an early start to real negotiations on START-3. A logical sequel to this approach is our latest proposal of cutting the number of Russian and US nuclear warheads to 1500 or even less. The creation of an effective global missile technology non-proliferation regime fully meets the goal of strategic stability. It should combine a global system of monitoring missiles and missile technologies and measures to improve these procedures. We also offer broad interaction in the sphere of so-called theatre missile defence. The Moscow Joint Warning Centre on Missile Launches now being created by Russia and the United States and which will be open to all the interested countries is an element of such cooperation. We hope that these initiatives will meet with a good response, including in Canada.
Russia appreciates the responsible policy Canada pursues on key world issues. We closely cooperate within the G8, at the UN and are actively cooperating in the sphere of peacekeeping and the settlement of regional conflicts. Many of Canada’s leaders call their country a “medium power”, but Canada in fact pursues a global policy and we are ready to cooperate in all areas.
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