Posted on 04/19/2002 7:02:13 PM PDT by Shermy
The Cold War is out and global economic competition is in. And to be competitive on the world markets, Russia's economic growth must gain greater momentum.
That was the main message of President Vladimir Putin's third annual state of the nation address, delivered Thursday to an audience of about 1,000 government ministers, parliament deputies, governors, religious leaders and other dignitaries.
The speech, which was thin on rhetoric and not once interrupted by applause, honed in on economics, with only brief mentions of the government's political and military policies. It made it clear, however, that Russia's foreign policy must be firmly subjugated to its economic goals.
"No one is planning to be our enemy in the modern world -- nobody wants it and nobody needs it," Putin said in his 52-minute speech, structured into short theses on a number of issues.
"But nobody is waiting for us in any special way. Nobody is going to especially help us," he said. "We must fight for ourselves for a place under the economic sun."
After summing up achievements such as a drop in unemployment and a 6 percent growth in real incomes, Putin directed his remarks to the economy's shortcomings.
The economy must grow at a far greater pace than it currently is if Russia is to become a global competitor, Putin said, repeating his criticism of the government's forecast of 3.5 percent to 4.6 percent growth for this year. Such a forecast "does not presume an active policy," he said.
Putin then laid out the kind of policy he envisions. He stressed the importance of reforming the government so as to prevent the inefficient state apparatus from obstructing the country's potential. He ordered Prime Minister Mikhail Kasyanov to present proposals for restructuring the executive branch. The ministries must shed the remnants of its Soviet-era characteristics to serve people and businesses rather than subjugate companies financially and administratively. He said that a list must be drawn up of the government information that can be in the public domain. The list must also be passed into law.
Putin also said corruption must be fought by improving institutions.
"I would like to emphasize that corruption is not a result of the absence of repression but a direct consequence of limited economic freedom," Putin said. "The higher the [administrative] barrier, the greater the bribes and the number of officials who take them."
Reforming the courts and creating a clear division between arbitration and general jurisdiction courts is not simply a political task but an economic one as well. The criminal law, at the same time, should be "humanized," he said, with minor crimes punishable by fines instead of prison terms. "Our main goal is to achieve an unavoidable punishment, not excessive harshness," Putin said.
He endorsed government-proposed amendments to the Tax Code but stressed that the 13 percent income tax "will not be reconsidered."
The seven federal districts, which Putin ordered drawn up in 2000, must assume more of the functions now handled by Moscow, namely over matters of financial control and personnel decisions for federal bodies' local branches.
To complete the re-centralization of the country, Putin said that the myriad of treaties that Moscow signed with the regions in the 1990s should be ratified by parliament or scrapped. The treaties, which allow tax breaks and other special conditions, were first signed with secession-minded republics such as Tatarstan and at one point 42 of Russia's 89 regions had them. Twenty-eight regions have since done away with their treaties, Putin said.
"At a certain moment in our history they were in demand and, I think, necessary," Putin said. "However, the very existence of such treaties leads to a de facto inequality among the subjects of the Russian Federation."
The remaining treaties should be presented for ratification "so that everybody knows who has which preferences and why," he said.
Adding to an ongoing Kremlin offensive on the once-powerful governors, Putin proposed increasing the powers and financing of town and village governments, which are known as "local self-governments" and have a special status under the Constitution.
Putin dedicated 14 short sentences to the situation in Chechnya. He reiterated once again that the military phase of the operation is over, praised the soldiers for their bravery and set the government's goal as returning the republic to Russia's "legal and political space" by creating Chechen legal institutions, law enforcement bodies and, eventually, holding free elections.
Contrary to expectations that Putin would announce a cut in obligatory military service by six months, he made a balanced statement that reform has to proceed but should not be hastened.
Turning to one of his favorite topics of late -- small business -- Putin suggested introducing a three-year moratorium on visits by agencies such as the fire and sanitary inspectorate. Such visits, which open the door to bribe-taking, present a heavy burden on small businesses.
Big business, however, is not likely to get any breaks from the Kremlin any time soon. Putin urged a continued reform of the so-called natural monopolies to improve their competitiveness. The budgets of the monopolies -- the Railways Ministry, Unified Energy Systems and Gazprom -- must be approved by the government. "Until now, we did not even know what was happening inside them," Putin said.
Putin endorsed once again the country's bid for membership in the World Trade Organization.
"It is obvious that we no longer face a choice of whether or not to integrate into the world economy," Putin said. "The global market is already here, and our market is already part of the global system."
To reap the fruits of globalization, Russia needs to be able to participate in the drafting of its rules. "WTO membership should become an instrument to protect Russia's interests on the global market and a powerful external factor in resolving the issues that we need to resolve anyway," Putin said.
Defending his pro-Western turn in foreign policy, Putin said that Russian foreign policy will be built "very pragmatically" and will take into account the interests of Russia's partners, mainly the CIS. He mentioned the post-Sept. 11 understanding that the Cold War is over and other global threats have emerged. But he reiterated that Europe is Russia's key partner, while dialogue with the United States serves to maintain global stability.
The ultimate test of the government's success will be whether Russia becomes a comfortable and safe place to live, work and make money, "so that people aspire to go to Russia and not to leave it," he said.
_______________________________________
Kudrin: State Hopes to Break Free of Oil
The Moscow Times LONDON -- One of the main goals for the government is to reduce the economy's dependence on high world oil prices, Finance Minister Alexei Kudrin said Thursday.
"We are in the process of calculating an oil price estimate for 2003. We think it will be $1 or maybe $2 lower than that for the 2002 budget," Kudrin said at the Russian Economic Forum in London.
The 2002 budget used a base price of $18.50 per barrel for the key Urals blend. Russia is aiming for a budget surplus of 1.63 percent of gross domestic product this year.
President Vladimir Putin is expected to set new tasks for the government with the aim of accelerating economic growth and increasing competitiveness, Kudrin said, speaking at the same time as Putin was giving his state of the nation address in Moscow.
"The Russian economy has been doing quite well in the past few years, but now the president has set new growth targets, which means we need to start some key reforms," Kudrin said.
Tax reform and banking reform, as well as further liberalization of the economy and support of small business, are among the government's key tasks in 2002 and 2003, he said.
"Accelerated growth ... means that we need to search for new ideas and new opportunities to increase the competitiveness of the Russian economy," Kudrin said.
Reducing state influence on the economy by eliminating administrative barriers and selling government stakes in enterprises should contribute to economic growth, he said.
The government will cut taxes going into 2003 and further look to reduce taxes in 2004, despite substantial debt payments next year, Kudrin said.
The Finance Ministry said in February that it expects Russia to repay about $17 billion of an estimated debt burden of $150 billion in 2003. Unlike the U.S...
I would like to emphasize that corruption is not a result of the absence of repression but a direct consequence of limited economic freedom," Putin said. "The higher the [administrative] barrier, the greater the bribes and the number of officials who take them."
Putin is busy creating a World Power based on economic freedom. Our Congress is busy destroying freedom with CFR, mangling energy policy, huge Govt spending, etc.
According to this, about 48 billion barrels. But it's two years old, and Russia has much land to be explored.
As for Natural Gas, it has double the second largest reserve, Iran.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.