St Petersburg International Economic Forum
OREANDA-NEWS. June 22, 2012. The XVI St Petersburg International Economic Forum has officially opened. The forum’s theme this year is Effective Leadership, which is also at the focus of Vladimir Putin's address at the forum’s plenary session.
Address at the plenary session of the XVI St Petersburg International Economic Forum
June 21, 2012 St Petersburg
Over 5,000 people from 87 countries are taking part in the forum, including President of Finland Sauli Niinisto, member of the Politburo of the Communist Party of China He Guoqiang and former US Secretary of State Henry Kissinger. More than 30 countries are represented at the ministerial level.
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Address at the plenary session of the XVI St Petersburg International Economic Forum
PRESIDENT OF RUSSIA VLADIMIR PUTIN: Good afternoon, ladies and gentlemen, forum participants, friends,
It is my great pleasure to welcome you to the St Petersburg International Economic Forum. I would like to share with this representative audience our plans for Russia’s transformation and to outline my vision of the situation in the global economy. But first let me say a few words about the G20 Summit, which has just concluded and tell you about its work.
The countries meeting at the summit account for about 90% of global GDP. Overall, the discussion’s participants share the view that the situation in the global economy looks quite alarming, but that is nothing new for the people who have gathered today in this hall. There are great many imbalances and accumulated debts. You are all aware of the situation in the leading Eurozone countries: Germany has 81%, France – 86%, the United States – 104% and the figure for Japan is even higher. This undermines the confidence of the business community and makes investors wary.
Unfortunately, along with the shortage of finance and budget deficits there is also a lack of decisive actions. We see how many basic and obvious steps are postponed due to political, party or group conflict, due to the current political climate, because of the political agenda in the leading economies, while half-measures only exacerbate the situation.
Europe is facing growing risks. The stock exchanges are showing diminishing confidence in the financial stability of major European countries. Regrettably, the core Eurozone countries cannot halt the descent into a new wave of recession. They have still failed to reach agreement on the ways out of the economic crisis. However, I very much hope that the next top-level meetings in the euro area will result in such consolidated solutions.
Unfortunately, the crisis is not localised, and it is natural that the signs of deceleration in business activity and slowing of economic growth are becoming increasingly apparent among the developing economies. However, the results of the elections in Greece, the choice of the Greek people, the determined attitude the European Commission, the European Union as a whole and some of the leading European countries in achieving financial discipline and the elimination of imbalances in the economy inspire cautious optimism.
Russia believes there is a need for urgent coordinated action in order to restore and reinvigorate global finance and their rigid adherence to the fundamentals of the real sector of the economy. In addition, it would be fair and reasonable to raise the issue of strengthening the role of the so-called developing countries and new economic powers in the elaboration and adoption of steps shaping the global economic order.
This was discussed at the meeting of the BRICS leaders, which was held on the sidelines of the G20 Summit. The group includes Brazil, Russia, India, China and South Africa. These countries not only confirmed their resolve to contribute to the implementation of stabilisation measures, to strengthen the stability of the global economy, but also took concrete steps in this direction: they have assumed the obligation to contribute an additional USD 75 billion to the IMF.
Our wish to influence the way in which these funds will be used is natural. We believe that we must proceed from declarations to the actual reform of the IMF and other international financial institutions, a reform that will reflect the new economic balance of power. In general, we must talk about the development of viable updated rules for world trade and mutual investment, the practical resolution of issues of sustainable development, including energy security.
I stress that we intend to give priority to all of these issues and to actively promote them during Russia’s upcoming presidency in G20 in 2013. We proposed to our partners that next year’s summit is held here, in St Petersburg.
The time has come for the G20 to take on the full responsibility of effective leadership. This means that the G20 should not turn into another elite club that cares only about its members. Selfishness and backroom deals do not add to stability and confidence.
The G20 is to become a venue for elaborating fair rules for the sustainable development of the entire global economy. The intercontinental nature of the global economy, where all states depend on each other today entails the global nature of responsibility – for the world's leading economies first and foremost.
This also applies to the countries that emit reserve currencies, in other words, the countries that run the printing press, as well as those states that are major holders of gold and currency reserves and thus ensure the stability of the international financial system, and, of course, those states that have the biggest national markets and natural resources, and which therefore largely determine the overall global growth dynamics. We must not only act together and implement a coherent policy, but also be aware of how decisions taken at the national level will affect the situation on a global scale.
I want to note here that Russia is guided by just such a responsible approach. For example, despite the problems in the Eurozone, we keep a large part of our international reserves is in euros and do not take any unilateral steps that could complicate the already difficult situation for the European currency. We realise that today the prosperity of the whole world to a large extent depends on the actions of the Eurozone leaders. Therefore, we support our European partners on the basis of our shared long-term goals.
Moreover, I believe that we should learn together from the situation in Europe and propose global initiatives that would prevent the recurrence of similar crises in other parts of the world.
In general, effective leadership and responsible course of action require today realistic solutions and actions that can boost confidence. That means a balanced budget policy, control over state debt and fiscal discipline. We must be able to state the truth and take responsibility. Rampant financial speculation and political populism are equally dangerous. There is no room for bubbles and pacifiers in politics or in the economy.
Finally, leadership means the ability to find a fundamental way out of global stagnation and instability, to propose and implement a long-term development strategy. Those who will do this first will achieve a strategic advantage.
The leaders who will be unable to bring about the desired results, who will not be able to give people hope for a better future, for good jobs, risk plunging their countries into the abyss of social and political instability, and all kinds of conflicts. Therefore, sustainable development today is a leading issue on the national agenda of every country in the world; it is the foundation of global security and the proper alignment of the entire system of international relations.
Ladies and gentlemen,
Here in Russia we have developed a programme of large-scale transformations, which has received wide public support. I consider its implementation a major challenge of my presidency.
What are our goals? They include the consolidation of Russia’s existing natural competitive advantages, the development of new opportunities in the global economy, stable national development, the state effectively serving the interests of the public, and law enforcement and judicial systems that enjoy the unconditional trust of citizens.
We hope that this will create new opportunities for the self-realisation of Russian citizens, a new quality of life and modern jobs; that it will improve education and healthcare and help in addressing housing issues.
For business it means creating the best conditions for investment, running your own business, setting up new companies and industries, free and fair competition, and ample opportunities for innovation.
I would like to focus on the principles of our economic policy in greater detail. In particular, I think I should reiterate some of the previously expressed ideas, because the business community and investors should feel that the authorities are consistent and predictable in their actions while maintaining continuity and without revising the declared objectives.
Naturally, everything that we say is easier said than done. I would like therefore to emphasise once again that macroeconomic stability has always been our special priority. This policy has already allowed us to achieve certain results. For example, the inflation rate over the past four years was significantly reduced (although it remains high compared to developed economies): last year inflation in Russia was 6.1% – that is still a lot, but I want to draw your attention to the fact that it was more than halved in four years.
Four years ago, inflation in Russia was more than 13%, whereas last year it was 6.1%, as I said. This is the lowest figure in Russia for the past 20 years. At the beginning of June, inflation was less than 4% in annual terms.
Russia has the lowest state debt among the G8, G20 and even BRICS states: on May 1, 2012 it stood at 9.2% of GDP. At the same time Russia's foreign debt is 2.5%. Also note that Russia is one of the three G20 countries that have a balanced budget. I will come back to this later.
The current macroeconomic indicators are quite good and acceptable, although there is no cause for euphoria. We are well aware of serious long-term and medium-term challenges for our economy. The economy is still not properly diversified. Much of the added value is created in commodities sectors. There is a high proportion of non-competitive old plants and the level of Russia’s dependence on oil prices remains high. We must reduce the dangerously high [budget] deficit if oil revenues are not taken into account. This, as I said at the G20 Summit, is the Achilles’ heel of our economy.
In an era of high volatility, such an economy is a very vulnerable and subject to significant risks. That is why Russia needs not just a deficit-free budget but a budget with a margin of safety, one that is not based on the oil and gas income. It should be based on non-oil revenues and the proceeds from the sale of hydrocarbons must be allocated a secondary role.
Therefore, in the near future we will adopt a new fiscal rule. Its logic is that the volume of our commitments, budgetary expenditures and long-term investment programmes with state participation must not be bound to the current oil price. As for the oil windfall, it will primarily be directed towards the reserves.
At the same time the Central Bank will continue its flexible exchange rate policy. Today, it is already making a major contribution to reducing the dependence of the real economy, of our producers, on external fluctuations, reduces the interest in speculative currency exchange transactions and allows us to curb inflation.
Please note: we will not depart from the principle of free movement of capital and will not impose any restrictions in this area. We realise the importance of transparency in this issue for investors who plan to invest their capital in Russia. I want to draw your attention to the fact that even in the most difficult period of the economic crisis, in 2009, the Russian Government did not impose limitations on the export of capital. It is true that we lost a significant amount of currency resources, but we proceeded from Russia’s long-term economic interests, and long-term interests require the confidence of investors. We intend to continue this policy in the future.
The past period has shown that abrupt, tough decisions and administrative restrictions in the economy do not work. To effectively counter the economic turbulence, the government and financial authorities must have a set of crisis management mechanisms, as well as sufficient internal sovereign resources that can be used in any situation.
In this regard, let me remind you about the situation last autumn. The banks in many countries around the world were facing a liquidity crisis. Joint actions of our financial authorities – the Finance Ministry and the Central Bank – ensured the smooth operation of the Russian banking system. Within a short time the Finance Ministry alone granted over USD 30 billion to credit institutions, and it achieved that without opening Russia’s reserve funds, which are also quite sizeable.
The Central Bank’s foreign currency reserves, which are the third largest in the world, amounted to over USD 512 billion as of June 8. In addition, we have the reserve funds of the Government of the Russian Federation: the Reserve Fund, with more than USD 60 billion, whose objective is to quickly resolve current problems, and the National Welfare Fund, which we use to support the pension system and which amounts to another USD 85.5 billion.
I want to emphasise that today Russia has sufficient reserves at its disposal and a whole range of anti-crisis rapid response mechanisms, including subordinated loans, state guarantees and programmes to stimulate demand and provide employment support. The entire arsenal was tested and proved to be effective in 2008-2009. And we are prepared to use it promptly and in full in the event of any negative trends in the world economy.
Meanwhile, we realise that the potential crisis may be different both in its duration and the nature of its manifestations. Therefore, I believe it would be expedient to create a full-scale system of forecasting and risk management. We will work on developing a system such as this. When I was Prime Minister, I asked my colleagues to think about designing such a system. The new Government is continuing this effort.
Most of the recent crises arrived in Russia from external sources. And naturally, we could not do anything about these factors. But a sound risk management system allows us to minimise the repercussions of external shocks, and moreover, prevent the emergence of crises due to internal causes, from the accumulation of our own imbalances, which is fundamentally important for an emerging economy such as Russia.
Ladies and gentlemen, while strengthening the potential of rapid response measures, we work on the assumption that the fundamental solutions lie in building a new economy: an economy that will withstand various types of shocks, one that is capable of rapid growth even under difficult external conditions.
According to 2011 data, Russia’s GDP grew by 4.3 per cent. This was the highest rate of growth among major European economies and one of the highest among the major economies of the world – only China and India were ahead of us.
As for unemployment, this is also among the most important indicators not just for social well-being, but for the economy itself. In May, unemployment fell down to less than 5.4 percent in Russia. This is much lower than the pre-crisis level. As you recall, unemployment in Europe is at 11 per cent – the highest level in 16 years.
Granted, things in Russia aren’t all serene and smooth, because although our unemployment is at a low level (5.4 per cent, as I said), it varies greatly from region to region. In the southern part of our nation for example, in the North Caucasus, in some republics, it is still extremely high. But again, it is a good figure for our nation overall.
That said, this low unemployment rate also speaks to the fact that extensive growth opportunities available due to idle production capacity and worker availability have almost been exhausted. Further development is only possible on the basis of high investment activity, high labour productivity, modernisation of existing manufacturing facilities and jobs and the creation of new ones.
What reference points are we determined to use here? By 2020, Russia plans to have created or modernised a total of 25 million jobs. We need to eliminate archaic, ineffective jobs from the national economy. Only then will we be able to respond to citizens’ demands for modern, well-paid jobs, offering new opportunities and social prospects for today’s generation of workers as well as future generations – in other words, for graduates of our universities and professional schools.
First and foremost, the economic effect of having millions of new jobs will be an increase in productivity, no less than 1.5-fold by 2018. This is a very complicated challenge, but we must set ambitious goals for ourselves, and only then will we consistently move toward our targets.
New jobs will mean a fundamentally different economic structure and stability, and at least a 1.3-fold increase in the share of GDP from high-tech sector production by 2018. At the same time, Russia must make itself known as an exporter of innovative goods and services.
New jobs are being created, of course, through investment. It is imperative that we increase their volume by 2018, to 27 per cent of the GDP. Is that a lot or a little? I feel that it is an absolutely realistic goal, given that today, it stands at 20 per cent. In that time, we need to raise it by seven per cent.
And naturally, when we talk about investment, we primarily mean private investment. We understand very well that we must offer investors exclusive conditions to compete for these investments, so that the investors ultimately choose Russia. This is why we feel creating an investment climate that is not just favourable, but truly better and more competitive, is a key issue in state policy. And by the end of this decade, Russia must be among the top 20 nations in the world with the most comfortable business climate. This, too, is a fairly difficult and ambitious goal, given our position today.
We have already created very specific road maps for eliminating administrative barriers in areas such as connection to energy grids, construction, customs procedures, foreign trade transactions, registering businesses, and filing tax reports.
I want to particularly stress that we are conducting this work jointly with our nation’s leading business associations, within the framework of the national entrepreneurial initiative. And the results of our joint efforts certainly shouldn’t be and won’t be diluted.
Much depends on the practical implementation of these road maps. And here, it is imperative to ensure particular monitoring by the government, society, and businesses themselves. That is precisely why an important decision has been made to create a special commission for the implementation of national entrepreneurial initiative. It will include representatives from Russian and foreign businesses, as well as heads of ministries and departments.
But as a great politician of the past once said, “If you want to delay something, create a commission.” We know this, we are keeping it in mind, and we understand that it will take time to create an improved system of government services for businesses. And the current problems, when an entrepreneur faces the violation of his or her rights, bureaucratic pressure, corruption or administrative barriers, need to be resolved today – all of those problems.
That is also precisely why a special new institution of Commissioner for Entrepreneurs’ Rights is being created in Russia, in close contact with businesses, – I want to emphasise that it will serve both Russian and foreign businesses. The Commissioner will have the right to defend businesses’ interests in court, to stop departmental or regulatory acts ahead of courts’ decisions and turn to the courts to quickly halt actions by bureaucrats. Naturally, to do this, we will need to make corresponding amendments to our legislation. I can see several State Duma deputies present today, and I address them with a request to quickly take those decisions.
Following consultations with the business community, a decision has been made to appoint Boris Titov, chairman of the Delovaya Rossiya [Business Russia] entrepreneurial organisation, as the federal commissioner.
We conducted preferential voting: practically all the entrepreneurial communities suggested Mr Titov as a possible commissioner. A corresponding executive order will be signed very soon. The office of the federal commissioner will begin work in just a few weeks.
I think that the Prosecutor General’s Office should also give this area of work particular attention, so that the commissioner can work directly with the law enforcement system.
In meetings with businesspeople I have often heard complaints about the unfair conditions of competition, including from the excessive state presence in the economy, the fact that state-owned companies enjoy preferential treatment, operate outside the rules of competition, and occupy the space in which private business should operate.
Today I want to reaffirm our principled position: the state will gradually withdraw from a variety of industries and assets. The plan for the privatisation of federal property has been approved and it will be executed. I should add that similar privatisation plans will be adopted at the regional level.
I want to emphasise straight away that it must be a fundamentally different privatisation, one that has nothing to do with the practice of loans-for-shares auctions and other dubious deals that were widely used in the 1990s, when state-owned assets created by the previous generations of our people were acquired in corrupt deals that involved the abuse of power at markedly lower prices, and often with the use of the state’s own funds.
This eventually corrupted entrepreneurial motivation, had a long-term negative effect on business ethics and led to profound systemic problems, including on the psychological and mental level. I am sure you will agree that it is difficult to demand public respect for property acquired in corrupt deals.
Unfortunately, and I have to admit it, the latest steps in this area demonstrate that little has changed since those times. I state this with deep regret. Therefore, it is obvious to us that the new privatisation should be unconditionally accepted by the Russian society, and hence it must be clear, fair and equitable, based on open and competitive sale of state assets, which will go to the best buyer who offers to pay the real price.
Only by observing these principles can we ensure that the federal budget will receive adequate revenues and the assets in question will get efficient owners, who plan to develop production rather than just sell it on. Most importantly, this is a way to maintain order and public respect for the institution of private property and such values as economic freedom and entrepreneurial initiative.
If we secure unconditional public confidence in these values, we will be able to build and strengthen effective safeguards for the protection of private property, qualitatively change the work of the law enforcement and judicial systems, doing everything necessary to make sure they protect the interests of bona fide participants in economic activity, and not serve as an instrument of pressure on business.
Honest, fair privatisation, breaking the link between property and the authorities is a very powerful and real anti-corruption measure. Unfortunately corruption is without exaggeration the biggest threat to our development. The risks are even worse than the fluctuation of oil prices. People are tired of everyday corruption, of bribery in the state bodies, courts, the judiciary and state-owned companies.
This is a difficult task, and we have talked about it a lot and often in recent times. This problem is not easy to solve, but it is impossible to pretend that it does not exist. We must talk about it and look for tools to help us tackle it. And we will do just that, including by attracting to the civil service people with different motivations, professional and efficient managers. The privatisation is necessary for us to build a modern economy, to reduce the risks associated with poor management and to ensure equitable conditions of competition.
I want to stress once again that our goal is not to build state capitalism. At the same time, privatisation must not lead to the emergence of private monopolies to replace the state-owned ones. We all know that without healthy competition a market economy is as prone to decay as the command-administrative system.
It is impossible to become truly competitive in the international arena without honest domestic competition, without the rule of law, without truth and justice in relations between business and the state. Competition in politics and the economy is the main engine of development. So I ask the Government of the Russian Federation to conduct a major revision of the practice of antitrust legislation and competition support. It must be done in close contact with the direct participants in the economy.
We would certainly welcome our foreign partners taking part in privatisation deals, but these must be genuinely serious strategic investors who will bring with them to Russia modern technology, experience in organising production, and big export orders.
Let me say that we already have this kind of positive experience of working together with foreign investors. We have carried out just this kind of work together in the power sector with foreign investors over recent years, and I must say that even after the global financial and economic crisis swept the world, the foreign investors who invested tens of billions of dollars in our generating facilities behaved exceptionally bravely and took a very professional line indeed. I hope that this kind of cooperation with Russia’s regional and federal authorities will continue not just in power sector but in other sectors too.
Ladies and gentlemen, today’s global instability makes the quality and nature of investment extremely important. Portfolio investment can heat up the market fast and make it highly dynamic, but at the same time, such investment is always vulnerable to short-term factors. Investors’ enthusiasm for fast-growing high-revenue markets can give way in a matter of mere days to pessimism and capital flight. We in Russia have encountered such situations in the past, and we therefore want to put the emphasis on direct investment, on investment in specific strategic projects.
Russia is now in eighth place in the world in terms of direct foreign investment inflow. Foreign investors put almost USD 53 billion into the Russian economy in 2011 and the investment growth rate came to 22 percent. But this is not enough for us to carry out our plans, and we are fully aware of this fact.
According to surveys conducted by respected international companies, the number of long-term investors planning to increase their investment in Russia almost doubled over the last six months. In October 2011, 25 percent of respondents from 150 companies and investment funds had plans to increase investment, but this figure had risen to 48 percent by April 2012, in other words, almost doubling. We welcome this and will support it in every way we can.
A year ago at the forum here in St Petersburg Dmitry Medvedev spoke about setting up the Russian Direct Investment Fund. This Fund is now up and running. Its expert advisory board was established in quick time and includes global investment community leaders. The first deals have already been made for a total of USD 1 billion, of which USD 800 million comes from foreign investors’ funds.
Practically all centres of global capital – the Middle East, China, Europe, the United States, and Australia – are working with the Fund. Two weeks ago, during my visit to China, the Fund became one of the founders of the Russian-Chinese Investment Fund, which will manage up to USD 4 billion.
We will also continue the work to develop an international financial centre in Moscow. We are not chasing illusions here but take a realistic view of the situation. Let me say however, that Russia’s financial system has been growing rapidly over these last years despite the problems that many of the big American and European financial institutions are currently going through.
Financial services in Russia are becoming more accessible for businesses and ordinary citizens. Loans to individuals increased by 43 percent in the last year, and the number of mortgage loans extended increased by almost 30 percent. Loans to individuals came to 6.4 trillion rubles – 10 percent of GDP – as of June 1, 2012, and loans to legal entities increased by 25 percent and came to 34 percent of GDP.
We are fully aware of the risks involved in this kind of increase in debt. Household debt in the United States, for example, is at very high levels, and this creates problems for the US economy and budget. The budget suffers because such loans were extended against state guarantees as a rule, and this impacts accordingly on public finances. We understand these problems and will proceed very carefully.
Trust in our banking system is growing. Bank deposits increased by almost 25 percent over the last year, and the inflation rate’s decrease means that people do not have to worry so much now about maintaining their savings’ purchasing power. Private deposits come to 12.5 trillion rubles – 22 percent of GDP.
We have taken several measures to make Russia’s financial and goods markets more competitive. For example, we have merged the two main stock exchanges, MICEX and RTS, thus creating the foundations for building a major world exchange, where trading will determine the prices of Russia’s assets and resources.
This is not all. We passed laws on a central depositary (it came into force on January 1, 2012), preventing the unlawful use of insider information and market manipulation, clearing and clearing activity, and organised auctions. In other words, we are building a serious and thoroughly prepared system for our financial institutions’ operation.
Furthermore, Russian companies have begun the move to mandatory publication of their financial statements in accordance with IAS. I think the time has come to take yet another step towards expanding the national financial system’s resource base.
Pension savings in Russia could come to more than 4 trillion rubles – around USD 120 billion – by 2015. We propose investing part of these savings in long-term reliable bonds for financing infrastructure projects. We would guarantee that these pension savings will remain safe (we all realise that infrastructure projects are always going to be needed after all and will always be put to work in the country), but we must also ensure that these are profitable placements. This is something we must examine thoroughly, and decisions will be made only so long as we can guarantee that this will indeed be both reliable and profitable.
We are ready to give investors more than just a new quality of financial, transport and energy infrastructure. A new Eurasian market offering a new configuration and immense potential opportunities is in the process of formation. Russia is developing integration projects in the Eurasian region at a rate and scale not yet seen before. We see integration as one of the most important sources of growth and development.
You know that we signed an agreement on a free trade zone in the CIS. Russia, Kazakhstan and Belarus are already working now within the Customs Union and the Common Economic Space, which create a single market of 170 million people with high education and professional skills levels and growing incomes. These three countries are moving towards even closer integration.
For the first time in the post-Soviet area, a genuine supranational body with real management powers, the Eurasian Economic Commission, has begun work. This Commission will be responsible for coordinating macroeconomic policy, technical regulation, and also competition and natural monopolies measures. We hope that this will significantly increase the quality of decision making in these areas and that business, our own and foreign, will feel the benefits of integration throughout the Eurasian region.
Finally, Russia is set to become a full member of the World Trade Organisation this year. WTO membership and the removal of many trade barriers will raise the quality of investment and have a big impact on business development strategy. Investing in Russia will open for investors not just the Russian and Eurasian markets, but international markets too, especially the European market, which remains one of the most attractive in the world even with the problems our European friends and colleagues currently face.
We have made a firm choice in favour of openness and integration into international economic developments. We did not abandon this choice during the trials of the crisis period, and we will not change it now. Indeed, we are stepping up our efforts to have Russia join the Organisation for Economic Cooperation and Development. I think this could happen in 2014. Russia will make an active and substantive contribution too, to the discussions on the future global trade rules.
I stress in this respect that we must remove the barriers not only for trade but also for reciprocal investment and for carrying out big transnational projects involving exchanges of assets and technology. We are open for projects of this kind and for foreign investment, including in strategic sectors, but this must be a reciprocal process, a flow in both directions.
Unfortunately, Russian companies wanting to invest in foreign assets sometimes find themselves up against a wall. Mutually advantageous deals fall through on the grounds of obviously invented pretexts that have no connection to the economy. This is not the way real partners should behave.
We do not seek artificial preferences for our business abroad. We simply want equal treatment for all, so that our investors are free to acquire assets abroad through fair and honest competitive procedures, using their competitive advantages without any discrimination.
We think that free movement of investment between countries, along with free trade, could be a catalyst for economic growth at this time of global economic difficulties. We must work together to make effective use of the development opportunities it offers.
Ladies and gentlemen, the global development outlook depends not only on our ability to settle the economic problems before us, but also on adjusting state governance mechanisms so that they genuinely work in our citizens’ interests, and get our people genuinely involved in setting the national agenda and addressing the key tasks before the country. Ability to achieve this determines the effectiveness and influence of government in any country, and Russia is no exception here of course.
Our position is that the government model at every level – federal, regional, and local – must correspond to the new quality of our civil society that has emerged over this last decade of steady economic growth. This is a healthy process of national development.
We are fully aware that you cannot build a modern economy without a mature civil society. The authorities must be ready to reach out to society and be open for dialogue. Only on this basis can we build up mutual trust and ensure stable development without upheavals and dead-end conflicts.
It is my conviction that a democratic political system must guarantee not only legitimate government, but also guarantee people’s confidence in its fairness and ability to look after the majority’s interests while at the same time also ensuring that the minority’s voice is heard and their interests given reasonable protection too. This is the logic we followed in deciding to make it much simpler to register political parties. The country’s various political and social groups now have the chance to defend their views and convictions within the framework of the law.
Furthermore, Russia’s people will play a more active role in the law-making process. Not only can they delegate their representatives to parliament, but can propose draft laws themselves, directly. Any public initiative that collects at least 100,000 authorised signatures online will be guaranteed examination in the federal parliament.
We will continue to improve our democratic system, including by making use of modern technology such as crowdsourcing. The aim of any transformation is to raise our people’s quality of life and give them new opportunities and confidence in the future. This means that each and every one of us (and I stress that this applies to all of us) who wants to get involved in politics and considers themselves a politician must act exclusively within the framework of the law.
The thirst for change is without question a driving force of progress, but it becomes counterproductive and even dangerous when it undermines civil peace and even the country itself. All of us need to understand what things in our political system can and should be improved, and which values and institutions form the country’s foundations and cannot be tinkered with.
We need to work through open discussion and dialogue with all of the different political forces to come up with a common answer, accepted by the vast majority of our citizens, on the most effective and suitable democratic and development model for our country.
Ladies and gentlemen, we have drawn up a programme of ambitious transformation for the years ahead. We have everything we need to reach our goals: talented, well-educated people, political will and determination to improve things and change our country. Most important of all, we are aware of our responsibility before our people and the future generations. We are not postponing action for a later date, but are acting now.
Some might say that we could act even faster and more effectively, while others would advise us to slow down the pace and not be hasty. But we are moving forward and will continue to do so. I am confident that we will build a strong, open and prosperous Russia, and we welcome everyone who is ready to work as partners with us.
Thank you very much for your attention.