Economic tasks

by Vladimir Putin

We are living in a period of radical change in the global economy. Technology is being modernised faster than ever before. Much of what is routine to us today looked like science fiction 15 to 20 years ago. The struggle for global leadership has become more acute than ever before, and we see countries whose standing seemed rock solid giving way to those countries that were looked down on only yesterday. The threat of man-made catastrophes and environmental disasters is greater than ever. But human opportunities have never been greater either. And it is those who make the fullest use of these opportunities that will be the winners.

In these circumstances we must ensure sustainable progressive development of our economy and try to shield our citizens from the hardships of crises as much as possible, while at the same time consistently and rapidly modernising all economic sectors, from the material and technical base to approaches to our economic policy.

Russia’s role in the global division of labour

After the collapse of the Soviet bloc, Russia had to find a new place in the global division of labour, whose main power centres and proportions had developed without it and, worse still, in an atmosphere of confrontation with the Soviet Union. The developed economies had erected barriers around their markets to protect their own interests. Differences in technological standards were an additional problem that hindered integration into the global economy.

But we have nevertheless developed an economy that is now an integral part of the global economy. This has been achieved mostly thanks to our natural resources. Global sales of gas, oil, metals, timber and other raw materials and low value-added products account for over 25% of Russia’s GDP.

Today Russia is dependent on the global economy and has been integrated into it very strongly, stronger than the economies of most other countries.

It has become commonplace to speak about a resource-based Russian economy. The Soviet Union’s self-sufficient and self-contained economy was not designed to work in new conditions. Only the most liquid sectors, connected with the export of unprocessed raw materials and semi-finished goods, survived the largely spontaneous market transformation. In fact, there was a large-scale de-industrialisation, with a loss of quality and the structure of production becoming too simple, which explains our excessive dependence on the import of consumer goods, technology and complex products, as well as on the fluctuation of prices of our main export goods. These are factors over which we have, by and large, no control.

Having an economy that cannot guarantee us stability, sovereignty and prosperity is unacceptable for Russia. We need a new economy with a competitive industry and infrastructure, a developed services sector and effective agriculture: an economy based on modern technology. We must develop an effective mechanism for modernising our economy and attract the huge material and personnel resources needed to achieve this goal.

However, we should not rely on protectionist measures to diversify our economy, and not because we have joined the World Trade Organisation. On the contrary, we joined the WTO because our economy is highly dependent on the external market in terms of both production and consumption. Ultimately, it is people and companies that pay high import duties. Excessive protectionism invariably leads to stagnation, low quality and high prices.

Time for technological catch-up

We need to find solutions to overcome our enfolding unilateral technological dependence.

No one is going to repeat the experience of the Soviet Union of course. I am referring to the policy of building a totally isolated technology sector as part of its stand-off with the West. As a result, most of our “original” technology, in conditions of isolation, fell behind that of our rivals; this became clear once the Iron Curtain collapsed.

The scenario we have in mind is entirely different. Russia must play a bigger part in the international division of labour, not only as a supplier of commodities and energy, but as an owner of regularly upgraded cutting-edge technology in at least some sectors. Otherwise, we are doomed to deplete our resources by constantly exchanging them for expensive foreign technology to produce consumer goods, materials and pharmaceuticals that we cannot develop ourselves. These technologies will gradually come to make up a greater share of global GDP, while the share of commodities and conventional services will shrink.

To regain technological leadership, we need to select priority sectors wisely. Candidates include the pharmaceuticals industry, high-tech chemistry, composite and non-metallic materials, aircraft manufacturing, information and communications technologies and nanotechnology. And Russia’s nuclear and aerospace industries have maintained their international leadership positions and technological advantages. This list is not closed; more industries may be added, depending on international market trends and, to a large extent, on the initiatives proposed by business owners and workers in these and other industries.

It is often argued that Russia does not need an industrial policy, since the government often selects the wrong priorities and gives preference to the wrong sectors, supports ineffective and inefficient producers, and hinders innovations which would have emerged naturally in a free market environment. It is difficult to argue with these statements, but they are only true with all other conditions being equal. Russia has gone through deindustrialization, which significantly damaged its economic structure. Large private capital is not flowing into innovative sectors because investors are reluctant to take the high risk. We will certainly use tax and customs incentives to encourage investment in innovative sectors. But it will take years for this to have an effect, and it may not have any effect at all if more attractive investment opportunities open up elsewhere in the world. Capital knows no borders. Are we ready to risk Russia’s future for the sake of pure economic theory?

Our decisions to establish large state corporations and vertically integrated holding companies were in fact dictated by the industrial policy priorities: Russian Technologies, Rosatom, United Aircraft Corporation and United Shipbuilding Corporation, and other conglomerates. The idea was to discourage the decline of the more intellectual sectors of national industry, to preserve its research and production potential through consolidation of resources and centralised management. This goal has definitely been achieved.

We had to consolidate those assets, that were officially government-owned but managed disjointedly, and which had often lost all links with their respective research and design centres.

The strategies of the large industrial holding companies were aimed at creating internationally competitive corporations, with high market capitalisation and stable or expanding niches on the global market. It is these corporations, engaged in versatile activities from the most advanced research and product design to manufacturing, supply and maintenance of their high-tech products, that control the global markets for aircraft, ships, computers, pharmaceuticals, medical equipment and other products. They provide the orders for small innovation companies and are taking over successful start-up businesses.

Most integrated companies have so far failed to become globally competitive or highly capitalised, nor are they consistently profitable. We are not going to abandon our projects halfway through. In some areas, like the aviation sector, we have only just managed to complete the difficult assets consolidation process. Clearly the viability of each such project needs to be evaluated. Right now, they need top managers with expertise in the innovative business sphere.

I want to stress that government efforts were focused on restoring Russia’s ability to compete in those sectors which involved only a few players on the global market. This did not mean there was any attempt to suppress private initiative, because there was no such initiative in these sectors. It would be erroneous to draw conclusions about the expansion of state capitalism on the basis of our work to accumulate and restructure assets and get them ready for sale.

We have compiled a plan for the reorganisation of each company and their subsequent entry into the market. Some of them will become public liability companies and their shares will be subsequently sold off. These include the Russian Technologies, the non-military assets of the Rosatom and some other state corporations. It will be impossible to accomplish this objective overnight, but we cannot delay its implementation indefinitely. I think it will be possible to reduce the level of state involvement in some commodity companies by 2016 and to complete the withdrawal from the capital of major non-commodity companies which are not connected to the natural monopolies or the defence sector.

We are expecting Russian capital to take an active part in the privatisation process and the subsequent development of high-tech assets. At the same time, we need to look for customers among global investors who would be willing to invest in the research production base, as well as bring their connections and their position on the major international markets to the table.

The successful experience of economic modernisation in countries like Korea and China shows that a push in the right direction from the government is necessary, and that the outcome from such a push outweighs the risk of making a mistake. It will be hard to implement diversification without a concerted effort. Understanding all the risks of selectivity, we must have a fully transparent policy of choosing priorities and of state support, open to assessment and discussion by competing companies and professional communities.

Competition lies at the heart of the modern economy and it is founded on companies, who develop and own advanced technologies, striving to prevent the users of these technologies from using the so-called technological core. This means the entire technology servicing cycle, not just research and development projects. This is highlighted by the example of Russian companies attempting to buy foreign assets during the crisis. Our Western partners promptly called a halt to proceedings, as soon as talk switched to the purchase of facilities with a complete production cycle (including even in car manufacture).

As a rule, the supplying company usually seeks to retain control over any complicated aspects of servicing equipment and production processes when selling state-of-the-art technologies. Consequently, customers become dependent on the supplier not only in terms of the technology, but economically as well. A country will incur long-term economic losses if it falls behind in advanced technological solutions. This will happen even if the assembly plants are located on its territory. The lion’s share of profits goes to where the head offices, laboratories and design bureaus are located.

That is why developed economies work on the principle of technology cooperation. Their mutual dependence strengthens economic and political stability.

Russia’s innovation cycle

Ensuring competition is the main pre-requisite for creating the demand for innovation in the economy. It is competition that prompts private businesses to seek better technical solutions and to regularly introduce new product. I can see all the challenges that our accession to the WTO is putting before a number of industries at home. And I would like to assure them that I will do my best to cushion transition-based problems. However, the manufacturers of industrial and technological goods must be clearly aware that the days of competing in a single national market have gone. From now on, there will be no comfortable niches. For hi-tech products there will only be one market – a global one.

The other side of the coin is to offer innovation. Russia can do more than simply buy innovation – we can also generate it. Our place in the future depends on how well we will use our potential.

The high levels of education among our people, our impressive legacy of fundamental science, our engineering schools, and the infrastructure for pilot-scale production which is preserved in many industries, are all factors that we have a duty to use.

In recent years, we have invested heavily in institutions capable of commercializing applied research. One example is RUSNANO, another is the Russian Venture Company, and then there are government-run tenders for innovative facilities at various universities. In addition, many Western companies have been attracted to participate in the Skolkovo project.

However, learning how to sell things is not enough. Sustainable innovative growth also requires a steady inflow of new ideas, fundamental research products, and finally, creative-minded specialists capable of developing new technologies.

Restoring the innovative nature of the economy should begin with universities – which should be seen as both centers for fundamental science and resources for innovative people. We need to pursue a national objective that results in globally competitive Russian universities. By 2020, we should have several world-class universities that span the entire spectrum of modern material and social technologies. This means that we must ensure the steady funding of university-based research teams who have a view to international development.

Like their international rivals, for scientific research purposes, Russian research universities should be receiving resources of up to 50% of budgeted education expenditures. I proceed from the assumption that we will, at the same time, pursue a carefully considered restructuring of professional education – a restructuring that would be carried out in cooperation with the expert community and with the public.

Ten-year programmes of fundamental and exploratory studies should be approved for the Russian Academy of Sciences, leading research universities, and government-run scientific centres. But the viability of these programmes will have to be defended and regular reports will have to be submitted as they are put into practice. They will be submitted to the taxpayers and to the scientific community, rather than just to the officials at the Ministry of Education and Science. Authoritative international specialists will be invited as well. These reports would be assessed by national leadership in cases where defence and other projects of direct national interest are concerned.

Preferential development of research universities does not mean that the Russian Academy of Sciences and government-run scientific centres will be neglected. On the contrary, the Russian Academy of Sciences’ institutes can only develop steadily in a situation where they can attract strong specialists.

We will increase funding by several times, up to 25 billion roubles in 2018, for government-run scientific foundations that support independent research teams. The amount of the grants should be comparable with what researchers receive in the West.

We must continue our efforts to integrate Russian research centres, universities and enterprises into international mechanisms that are available for documenting scientific results and converting them into actual profit.

We must overcome the inertia of our large domestic capital that, to be honest, has nothing to do with innovative projects, research and development. Currently, 47 state-run companies are involved in innovative programmes. But private corporations must make it common practice to spend 3%-5% of their gross product on research and development. There must be proper tax mechanisms in place and, most importantly, private business executives must realise that without this initiative, they won’t be seen as equal players in the global market.

Secondly, the modernisation of technology requires mastering imported technology as soon as possible. There are excellent examples of importing advanced technology culture. Our experience has been quite good in car production, with nearly half of foreign cars being produced by Russian workers. Customers see no difference between their quality of work and our own. The next step is to adapt production through setting up technological development centres here, in Russia. A substantial share of foreign brands of household appliances are produced in Russia. Our largest food producers supply products that are almost exclusively local. It is very important for us that the global leaders in technology make a shift from perceiving Russia as an interesting and potentially successful market and investing in local production, to developing new technology and new products here, in Russia. But they will do so only if they see technical universities and research centres that are competitive on the international level.

By investing in competitiveness of the advanced areas of the economy, Russia is also taking on the solution of a global social task: developing a creative class and shaping an environment in which it can attain its potential. But there are large sectors that are stuck in the previous century in terms of their technology and organisational culture. To a large extent, this can be attributed to the fact that we purchase equipment but forget about new production logistics, quality control and, in some cases, about basic technological regulations. The largest industries that this relates to are of course construction and transport.

The government will support large infrastructure projects. Firstly, this means transportation networks and reliable communication with Siberia and Russia’s Far East. Local road networks are also very important. The current state of affairs is truly paradoxical. With its huge territory, Russia suffers from a lack of land that is suitable for construction. This is due to an underdeveloped infrastructure. You can build a house or a factory 50 km or even 80 km from a big city in Europe, America, Japan or South Korea; while in Russia, untapped lands begin 20-30km away, where there are no roads, gas, water and electricity and the land is worthless because it cannot be used.

Development of Russian land must start with the lands surrounding large economic centres. The expansion of metropolitan areas by 50%-100% will increase the available areas by several times. This will help overcome the deficit completely and reduce the cost of residential and industrial properties by 20%-30%. Rural and suburban farming will see significantly greater profits, with farming industry workers enjoying a much better standard of living.

Businesses, especially small and medium-sized businesses, are quickly engaging with new opportunities that emerge along with the development of infrastructure, and road networks in particular. But only the state is able to build this infrastructure under the current circumstances, along with the participation of private businesses (public-private partnerships). But this will require a substantially more efficient management of expenses. We must not spend more on construction than our neighbours. We are ready to hold international tenders and to attract well-known foreign companies as operators and contractors. Beginning next year, we are going to arrange compulsory public technology and price audits of all large investment projects with state participation. The audit will involve international experts.

The farming industry requires particular attention. The growth in this sector has been quite good in recent years. Most developed countries provide support to their agricultural producers in one way or another, and Russia is no exception. There are two reasons for this. Firstly, uncertainty of the global market and dramatic fluctuations in food prices make agricultural security – that is, the country’s ability to provide food for its people – as important for economic and social stability as a balanced budget and a strong currency. Secondly, the agricultural sector is an important element of a competitive environment in the economy and for creating small and medium-sized business, the foundation of healthy capitalism.

Where to get the capital?

Private investment is the main source for creating new production facilities and jobs. The situation here can hardly be called optimistic. Russia is losing out to rival countries in terms of its investment climate. Substantial amounts of capital are being withdrawn from Russia.

Yes, this situation can be explained in large part by our actions in the late 1990s and early 2000s. At that time, a conflict had flared up between those who had appropriated in the 1990s the main financial flows based primarily on the sale of commodities, fuel and, and those who wanted to return them to the state and use them for the benefit of the entire society. It is my opinion that we did the right thing at the time, increasing the state’s influence in commodity sectors.

This is not only because certain oligarchs had tried to continue directly buying their way through the political system. At the very beginning of my first presidential term, we faced persistent attempts to sell key assets abroad. The preservation of this country’s strategic resources in the hands of several private owners for a period of five to ten years meant subsequent outside control over the Russian economy.

This is not meant to imply some anti-Russian conspiracy. The issue is completely different. Look at how international capital behaves under conditions of instability, turbulence and anticipation of an impending crisis. These investors do not hesitate to withdraw their assets from emerging markets in order to save the national nucleus of their businesses. In their opinion, Russia ranks among such markets, which was no doubt also the case in the early 2000s.

Sustained national development is not only determined by macroeconomic indicators. A country’s stability also hinges on the fact that most investors who make investment-related decisions live in the country, link their children's future with it and associate their long-term interests with the country's development.

What needs to be done in order to solve the problem of capital?

First of all, we must expand the volume of the domestic market, thereby making it more attractive for direct investment. We are currently doing our best in this area. We have made the shift from declarations and statements of intent to real integration for the first time since the break-up of the Soviet Union. The past few years has seen the establishment of the Customs Union, the Common Economic Space and the CIS Free Trade Zone. Technical regulations are being harmonised. Russia is consistently trying to establish a common market together with its neighbours. This market would not hinder the penetration of goods and services in any way, and there is no question of there being any uncertain terms. Of course, we are taking into account the interests of our partners during this process, we compromise and even make concessions. But these concessions will soon pay off many times over. We proceed based on the premise that the huge market of the Common Economic Space will make each of our countries more competitive.

Second, the national business environment and the country’s long-term investment climate still leave a lot to be desired. In the past few years, we have launched numerous reforms on the initiative of President Dmitry Medvedev. These reforms are called upon to improve the business climate. But there have not yet been any noticeable shifts. We are losing in the competition of jurisdictions. Businesses operating in Russia often prefer to register property and transactions abroad. This has nothing to do with our tax regime, which is, in general, competitive. Nor does it have anything to do with the lack of legislation meeting modern requirements. Of course, such legislation must be improved, because it is not yet flexible enough and because it does not provide the entire range of instruments that are needed for the business community. However, the main problem is rooted in a lack of transparency in the work of state representatives from customs and tax services and their accountability to society. This is also true of the judicial and law enforcement systems. Calling things by their names, this amounts to system-wide corruption. Business expenses and the related payments may vary, depending on the “benevolence” of certain officials within the state machinery. In this case, business people find it more appropriate to seek out patrons and to come to some kind of agreement, rather than abiding by the law. Instead of facilitating a more cost-effective performance on the part of their companies, these “agreeable” business people will try to suppress their rivals and carve out a place in the market for themselves by tapping the potential of affiliated officials from the tax, law enforcement and judicial systems.

We must pave the way for businesses that are ready to succeed as a result of fair competition. This is a fundamental and system-wide task which cannot be resolved with the help of any economic policy. We must alter our state, as well as our executive and judicial branches. We must do away with the accusatory bias of law enforcement, investigative, prosecutorial and judicial agencies. We must eliminate all vestiges and leftovers of Soviet-era law enforcement concepts and all legal snags that make it possible to open up a criminal case against any party involved in a commercial dispute. All economic cases must be tried by commercial courts, rather than by general jurisdiction courts. We must openly discuss and submit all the necessary specific proposals on this issue together with the expert community, judges and business people before the year is out. I am confident that State Duma deputies will support these amendments.

As of January 1, Russia and Kazakhstan have established a common economic space. The example of Kazakhstan is quite revealing. The World Bank estimates that Kazakhstan currently ranks 47th in terms of its business environment. Russia is in 120th place. I propose that we come closer to reaching all the best parameters that comparable nations have, facilitating a comfortable business environment within the next few years.

We must change the entire ideology of state control over business activity, and we must drastically limit these functions. Our strategy must hinge on the business community’s presumption of innocence. We must proceed based on the premise that the creation of conditions for the activity of honest business people is more important than possible risks associated with unscrupulous behaviour.

Third, ordinary people’s money is almost useless in the capital market. This means that the population does not receive its share of earnings resulting from economic growth and increased capitalisation of the economy. We need programmes for incorporating people’s money into investments via pension funds, trust funds and mutual funds. In advanced market economies, this makes up a considerable part of the national capital.

We should create a situation in which long-term money in the form of steadily growing private savings, including pension savings, comes into being within the Russian private sector.

This cannot be achieved unless we work consistently to reduce inflation. Price growth affects each person’s earnings and discourages people from saving. We are often advised to solve our economic problems through the irresponsible printing of money or a reckless buildup of public debt. But we know only too well that in this case a short-lived illusion of prosperity will soon give way to a price surge. That's what happened in this country in the 1990s.

But lower inflation rates will not automatically create additional capital. We need to be active in assisting new institutions to emerge.

It is necessary to introduce government-sponsored mechanisms that will provide for the security and even profitability of pension savings accounts. It is necessary to test new methods, such as opening pension savings accounts directly with banks. Support for the formation of long-term money should become a priority for the next 10 to 15 years. This is a protracted process: we must not be anxious that it will not produce an immediate effect. The main condition of its future success lies in the fact that Russia is witnessing a rapid growth of its middle class, which is ready to invest in better healthcare, better housing, higher pensions, etc. The government must see to it that this money does not disappear.

Let me say this, especially for the opposition. What is mentioned above does not mean that we will to any extent draw back from free education and healthcare or stop increasing regular pensions. We will not. We will improve the quality of services guaranteed to every citizen in this country by the Constitution. A separate article will be devoted to this issue.

Reducing government involvement in the economy

The art of economic management under present-day conditions consists primarily of identifying the proper ratio between the role of the government and private initiative.

The global crisis has created supporters of state management, with additional arguments in favour of their position. But we know that Russia differs from many other countries in that the government continues to control a relatively large share of the economy and is more heavily involved in regulation, while its regulation methods, on the contrary, are inferior to the best equivalents. Our economic policy should be adjusted so as to reduce the scale of state regulation, to replace regimentation by market mechanisms, and to substitute liability insurance for administrative oversight.

Earlier I mentioned our plans to privatise a number of key assets. But I should specify that this privatisation will be of a structural, not a fiscal, nature. That means that we sell not only in order to procure additional money for the budget, but primarily in order to encourage economic competition and pave the way for private initiative. But it would be foolish to sell property cheaply while ignoring the market situation. No thrifty proprietor would act in this way.

There is a great deal of talk among the public that the privatisation of the 1990s, including loans-for-shares auctions, was dishonest. I fully agree with that assessment. But any confiscation of property at this point, as some suggest we do, would simply cause the economy to grind to a stop: plants would be paralyzed and a surge in unemployment would follow. Besides, many current owners of these assets are formally good faith purchasers. They did not breach any laws at the time. Many of them are modernising their plants and creating new jobs. They are efficient owners. But their behaviour during the crisis in 2009 and 2010 revealed that the business community’s social responsibility has grown as well.

It is also necessary to reduce the involvement of predominantly public-owned major companies and banks, as well as natural monopolies, including Gazprom, in other companies’ assets. Non-core assets, including media holdings, should be separated.

The purchases of new assets by government-run companies in Russia must be restricted. The major players should not interfere with the normal development of private businesses in their particular sectors, nor should they box private entrepreneurs out from more lucrative projects.

Macroeconomic requirements for growth

Sound capitalism that works for everyone will not emerge in Russia unless macroeconomic stability is maintained and reinforced. This has been perhaps our greatest achievement in recent years. We have learned to appreciate macroeconomic stability and to use various instruments to preserve it even in the most difficult circumstances. Thanks to reserve funds that were created preemptively, we managed to weather the first wave of the global crisis with relative ease.

Economic actors must be confident about Russia’s macroeconomic stability for years to come if they are to make long-term investments. In particular, the business community must understand how the government plans to resolve key fiscal problems and how it will finance approved budget expenditures, including those required for the modernisation of the economy.

We have already assumed significant long-term budget commitments, primarily in the social sphere, and we intend to meet them. In addition, we are planning to spend significant resources on the modernisation of our Armed Forces, on the development of healthcare and education, as well as on road construction and repairs. How can we finance this spending?

First, we need to spend more efficiently, clearly identify our priorities, and reject anything that is superfluous. We need to impose strict control over the cost and quality of construction and government procurement prices. Essentially, we need to eradicate kickbacks in the use of public funds at the federal and regional levels. By tackling these issues, we will save at least 5% and possibly even 10% of the budget, or about 1% to 2% of our GDP annually.

The draft law on the federal contracting system mandates the preliminary public review of the format of government procurement and the starting price for government purchases. I believe this procedure needs to be applied to all major procurements, exceeding say 1 billion roubles in value, without waiting for the new law to come into effect. Let’s put suppliers’ private interests to work for the public good.

Suppliers, along with journalists and all interested public organisations, should get used to discussing whether the technical solution being purchased is up-to-date, what companies can successfully implement the project, and, finally, what is the most cost-effective way of doing it.

In our fiscal policy, we need to turn our backs on the practice of financing agencies rather than the public services that they are supposed to provide. Wherever possible, we need to transition to normative per capita financing, meaning that money will go directly to the citizens that apply for services.

This will ensure an additional 10% to 15% in savings and will allow us to increase the salaries of teachers, doctors, and university instructors, and to provide patients with medication without reducing other forms of social spending.

Second, we need to ensure a balanced pension system that will help reduce budget transfers to the Pension Fund.

Third, we will need tax reform. We have no plans to increase the tax burden on the non-commodity sectors of our economy, which would undermine our policy of economic diversification. But there are other places where we can find additional tax revenue, including expensive real estate, luxury goods, alcohol, and tobacco, as well as increased rental fees in those sectors where they are undervalued.

Most important is a surtax on wealth, or to be more precise, a luxury tax. All major decisions should be taken as early as this year, so that next year the owners of expensive homes and vehicles start paying higher taxes. However, it is important not to go overboard and to ensure that these measures are not applied to the middle class.

There is significant potential for increasing tax revenue by eliminating tax evasion through offshore arrangements and fraudulent companies. Law-abiding businesses will only benefit from this, as they will no longer have to compete with those who thrive on defrauding and deceiving the government.

We must also reject, once and for all, the temptation to adjust the tax system to accommodate increased spending. This policy increases uncertainty in the business environment for companies, thereby seriously undermining the investment attractiveness of our economy.

Our key objective is to restore long-term conformity between government spending and revenue. The two have been out of balance since the economic downturn, when significant resources were allocated to mitigate external shocks. That happened in most of the countries that were hit hard by the crisis.

The experience of the EU and the United States demonstrates the economic, social and political dangers of failing to maintain a balanced budget. In Russia, this problem is exacerbated by the strong dependence of government revenue on oil and gas prices.

In addition, we need to be very careful about taking government loans, always keeping in mind the lessons learned from recent global and Russian economic history. First, large debt always means a partial loss of national sovereignty. It creates a situation wherein any deterioration of the economic environment makes the country dependent on investors, international organisations, and lender nations, which then dictate what measures a government must take.

In this regard, Russia, with the lowest sovereign debt among G20 countries, is currently in a more favourable position than other nations. We should maintain this advantage as a guarantee of our macroeconomic stability. Second, when people lend money to their government, they reduce the money available for private investment. And if we want to increase the level of private investment, we should avoid running high budget deficits.

* * *

Labour productivity in Russia is three to four times lower than that of the developed economies. What does this mean? For a nation, low labour productivity means a globally uncompetitive economy. For the individual, low productivity means a bad job that is not well-paid. The reason for this is not, as some bright individuals claim, that Russia people can’t or don’t want to work, or don’t work hard enough. This is not true. The reason is that their jobs are outdated and unproductive.

A new generation of Russian citizens – young professionals and future graduates – has very high expectations for their careers. Our country has never faced such a serious educational and cultural challenge. But I am certain it is a positive challenge.

A logical solution to low efficiency of labour would be to create highly productive and therefore well-paid job for educated and ambitious people, through upgrading existing production facilities and creating new ones in both traditional and completely new sectors of economy.

Russia’s new economy will be a diversified economy where many competitive sectors will be developed alongside a modern fuel and energy industry. The proportion of high-tech and knowledge-based industries in Russia’s GDP must increase by 50% by 2020. This will double Russia’s high-tech exports.

Our new economy will be an efficient economy, with high labour productivity and low energy consumption. We must close the gap with leading countries, which means doubling productivity throughout the economy and, in key sectors, matching or outpacing the productivity of our competitors. Otherwise we will not be able to successfully compete in the global economy.

The new economy will provide highly productive and high paying jobs. The average wage will grow by 60-70% and reach nearly 40,000 roubles per month in 2011 prices. The gross amount will, of course, be higher.

It will be an economy of continuously upgraded technology. The share of enterprises that implement technological innovations must increase two-and-a-half times from the current 10.5% to 25% by the end of the decade, reaching the current average in Europe.

It will be an economy in which small businesses will provide at least half of the jobs in the economy. By 2020 intellectual and creative work must make up a substantial part of the small businesses that export their goods and services on the global market.

Each macroeconomic indicator and each particular project must clearly point to the number of new jobs it will provide and the way it will change the quality of employment and therefore the quality of life in Russia.

The renewed economy must give everyone – entrepreneurs, public sector employees, engineers and skilled workers – an opportunity to realise their potential. This is the social dimension of the economy. I will speak about this in my next article.

source for English text:  http://premier.gov.ru/eng/events/news/17888/

original Russian text: http://premier.gov.ru/events/news/17888/

Bush & Obama? Israeli assassinations and US Presidents

By Alison Weir for "CNI" via Information Clearing House

On January 13th the Atlanta Jewish Times featured a column by its owner-publisher suggesting that Israel might someday need to “order a hit” on the president of the United States.

In the column, publisher Andrew Adler describes a scenario in which Israeli Prime Minister Netanyahu would need to “give the go-ahead for U.S. based Mossad agents to take out a president deemed unfriendly to Israel.”

The purpose? So that the vice president could then take office and dictate U.S. policies that would help the Jewish state “obliterate its enemies.”

Adler writes that it is highly likely that the idea “has been discussed in Israel’s most inner circles.”

Numerous Jewish leaders quickly condemned Adler, who has now apologized for the column, resigned, and there are some reports that he plans to put the newspaper up for sale. An Israeli columnist noted that the hatred being stirred up against Obama is similar to conditions in Israel that led to the murder of Israeli Prime Minister Yitzhak Rabin by a Jewish extremist.

Many of those criticizing Adler claim that he had defamed Israel by suggesting that it would ever do such a thing. Abe Foxman, head of the Jewish Anti-Defamation League (ADL) proclaimed: “There is absolutely no excuse, no justification, no rationalization for this kind of rhetoric. It doesn’t even belong in fiction.”

In reality, however, Adler’s expectation that Israel’s inner circles have explored such a course of action, and would be willing to undertake it, may be entirely accurate. The fact is that Israel has killed and plotted to assassinate people throughout the world; a number have been Americans. One alleged plot was chillingly similar to Adler’s suggestion.

Secret Service warned of Israeli assassination plans

There is evidence that in 1991 an Israeli undercover team planned to assassinate a U.S. President. The intended victim was George Herbert Walker Bush.

The first person to write of the plot was a former 11-term Republican Congressman from Illinois, Paul Findley. In a 1992 article in the Washington Report for Middle East Affairs, Findley described the alleged scheme and how it was revealed.

Findley writes that the U.S. Secret Service had received a warning that elements of Israel’s spy agency might target Bush when he went to Madrid for the opening day of the peace conference to be held that year.

According to Findley, a former Mossad agent named Victor Ostrovsky who had written a book exposing Israel’s spy agency told a group of Canadian parliamentarians that he had received secret intelligence suggesting that the “the Mossad's hatred of Bush – and support for Vice President Dan Quayle – might lead to an attempt on the president's life.”

Israel considered Quayle much closer to Israel than Bush. Bush had particularly angered Israel by attempting to pressure Israel into ending its illegal settlement expansion on confiscated Palestinian land by withholding loan guarantees until Israel ended this practice.

Findley writes that Ostrovsky’s statements were relayed to Findley’s friend and former colleague Paul “Pete” McCloskey, a prominent former Republican Congressman from California who had recently been named by Bush to the National and Community Service Commission.

McCloskey, a decorated Marine veteran and graduate of Stanford law school who had at one time been considered a presidential contender, flew to Ottawa to debrief Ostrovsky in person and evaluate his information.

Findley reports that Ostrovsky told McCloskey that the Mossad wanted "to do everything possible to preserve a state of war between Israel and its neighbors, assassinating President Bush, if necessary." Ostrovsky said that a PR campaign was already underway in both Israel and the United States to "prepare public acceptance of Dan Quayle as president."

Convinced that Ostrovsky was legitimate and his information significant, McCloskey jumped on the next flight to Washington, where he reported Ostrovsky’s intelligence to the Secret Service and State Department.

The apparent plot never went forward, perhaps because Ostrovsky and McCloskey had given it away.

Ostrovsky gave more details about the plot two years later in his 1994 book, “The Other Side of Deception: A Rogue Agent Exposes the Mossad's Secret Agenda,” published by HarperCollins.

In the book Ostrovsky writes that an extremist group within Mossad was responsible for the plan. He says they kept the plan secret from then Israeli Prime Minister Yitzhak Shamir, though they believed that Shamir would have ordered such a hit himself if he hadn’t been constrained by politics. In the lead-up to Israel’s 1948 founding war, Shamir had headed up a terrorist group known for its assassinations.

In his review of Ostrovsky’s book, Ambassador Andrew Killgore, a retired career foreign service officer and publisher of the Washington Report, called the book an “insider's probing exposé of some Middle East realities that have been hidden too long from all but Israeli eyes.”

Ostrovsky writes that the Israelis planned a “false flag” operation in which they would pin the assassination on Palestinians. They kidnapped three Palestinian militants from Beirut who were to be the scapegoats, took them to Israel's Negev desert, and held them incommunicado.

“Meanwhile,” Killgore writes, “Mossad-generated threats on the president's life, seemingly from Palestinians, were leaked. These were designed to throw suspicion on the organization of rogue Palestinian terrorist Abu Nidal. Names and descriptions of the three terrorists were leaked to Spanish police so that, if the plot was successful, blame would automatically fall on them.”

Ostrovsky reports that after the assassination plot was eventually cancelled, the three Palestinian prisoners were “terminated.”

Targeting Americans

If the plot had gone forward, this would not have been the first time that Israel targeted Americans for death. Nor would it be the first false flag operation.

• In 1954 the Mossad planned to firebomb American installations, libraries, and other gathering places in Egypt. The Muslim Brotherhood was to be blamed for the attacks, thus causing American animosity toward Egypt. An accidental early detonation of one of the devices caused the plot, known as the Lavon Affair, to unravel before it could kill or mutilate the intended Americans.
• In 1967 Israeli air and sea forces perpetrated an almost two-hour assault in which they tried to sink a US Navy ship with a crew of 294. While the attack failed to sink the ship, it succeeded in killing 34 Americans and injuring 174. Some analysts have conjectured that this was also a false-flag operation; it is highly likely that Egypt would have been blamed for the attack if the ship had gone down.
• In 1973 Israeli fighter pilots were ordered to shoot down an unarmed U.S. reconnaissance plane (at the time the U.S. was delivering massive weaponry to Israel to prevent it from losing the “Yom Kippur” war with Egypt and Syria). While the Israelis were unable to reach the altitude of the U.S. plane, they did manage that same year to shoot down a civilian Libyan airliner that had strayed over Israeli territory, killing 104 men, women, and children. One was an American.
• In 1990 a Canadian-American scientist and father of seven, Gerald Bull, was assassinated in Belgium. All indications are that it was an Israeli Mossad hit team that drilled five bullets into the back of his head and neck. (Israel has assassinated a number of scientists of various nationalities. The most recent is a 32-year-old Iranian father with a young son.)
• In 2003 it came out that Israeli leaders had officially decided to undertake assassination operations on U.S. soil. An FBI spokesman, queried about the Israeli plans, said only: "This is a policy matter. We only enforce federal laws."
• In recent years a growing number of American peace activists have been intentionally killed, maimed, and injured by Israeli forces, including 23-year-old Rachel Corrie, 21-year-old Brian Avery, 37-year-old Tristan Anderson, 21-year-old Emily Henoschowitz, and 21-year-old Furkan Dogan.

All of this has been minimally reported in the U.S. press. While major news media from England to Israel to Australia covered the Jewish Times’ apparent endorsement of a possible Israeli assassination of a U.S. President, the scandal has been largely missing from U.S. media. Even Atlanta’s AP bureau inexplicably initially decided not to write a report on it, only finally sending out a story many days later.

Such news omissions concerning Israeli partisans are not rare. In 2004 a fanatic Israel loyalist wrote a letter saying that he was going to burn down Presbyterian churches while worshippers were inside (he was furious at the Presbyterian Church’s decision to divest from companies profiting from the illegal Israeli occupation of Palestinian land). This grisly threat also received minimal media play.

Despite Israeli violence against Americans (even while American taxpayers have given Israel far more of our tax money than to any other nation) American presidential candidates, with the exception of Ron Paul, continue to vie over who is most devoted to Israel.

It is ironic that Adler considers Obama so bad for Israel, given that Israeli analysts have rated him second only to Mitt Romney in his fidelity to Israel. And Obama has now released a seven-minute video that may catapult our first African-American president into first place in pandering to an apartheid nation.

But perhaps he’ll be safe from assassins.

­Russia: The national question

by Vladimir Putin

For Russia – with its wide range of languages, traditions, ethnicities, and cultures – the national question is, without exaggeration, of fundamental importance. Any responsible politician or public figure must recognize that one of the main conditions of our country’s very existence is civil and interethnic harmony.

We see what is happening in the world, the serious risks that are accumulating. Escalating interethnic and interreligious tensions are today’s reality. Nationalism and religious intolerance are becoming an ideological base for some of the most radical groups and movements – destroying or eroding states, and dividing societies.

The colossal immigration flows – and we have every reason to assume that they will continue to grow – are already being referred to as the new “Great Human Migration”, capable of shifting the familiar structure and image of entire continents. Millions of people, in search for a better life, are leaving regions stricken by hunger and chronic conflict, poverty and social unrest.

Some of the world’s most developed and prosperous countries, which had previously boasted about their tolerance, have come face-to-face with the “intensification of the national question”. And today, one after another, they have had to admit their failure to integrate outside cultural elements into society and ensure a peaceful, harmonious interaction between various cultures, religions, and ethnic groups.

The “melting pot” of assimilation is stalling and smoking, unable to “digest” the growing migration flow. In politics, a reflection of this fact has been “multiculturalism”, which rejects the notion of integration through assimilation. It elevates the “right of minorities to be different” to the absolute and, at the same time, fails to balances this right with civil, behavioral, and cultural obligations with regard to the indigenous population and society as a whole.

In many countries, closed national and religious communities are forming, which not only refuse to assimilate, but will not even adapt. There are neighborhoods and entire cities where generations of immigrants are living on welfare and do not speak the language of the host country. The response to this situation has been a rise of xenophobia among indigenous populations in an attempt to protect their interests, jobs, and social benefits from the “foreign competitors”. People are shocked by the aggressive pressure on their traditions and way of life, and are seriously threatened by the possibility of losing their national identity.

Some respectable European politicians are starting to talk about the failure of the “multiculturalism project”. In order to hold on to their positions, they exploit the “ethnic card” – siding with those whom they had earlier considered marginal and radical. Extremist forces, in turn, are rapidly gaining momentum, making claims to state power. In essence, talk of forced assimilation is being proposed against a background of “aloofness” and sharp tightening of migration regimes. People of different cultures must either “dissolve in the majority” or remain an isolated national minority – albeit with various rights and guarantees. In practice, it means being cut off from the possibility of a successful career. I’ll be frank – it is hard to expect a citizen who has been subjected to such conditions to be loyal to his country.

Behind the “failure of the multicultural project” stands the crisis of the very model of a “nation-state” – a state historically built exclusively on the basis of ethnic identity. And that is a serious challenge which will be faced in Europe and many other regions of the world. 

­Russia as a ‘historic state’

­Despite all the superficial similarities, our situation is fundamentally different. Our national and immigration problems are directly linked to the collapse of the Soviet Union and, in essence, Greater Russia, whose historic foundations were built back in the 18th century. To the subsequent inevitable degradation of state, social, and economic institutions. To the enormous gap in development on the post-Soviet territory. 

Having declared sovereignty 20 years ago, the then-deputies of the RSFSR, amid a fight against the “union center”, launched the creation of “nation-states” – even within the Russian Federation itself. The “union center”, in turn, while trying to put pressure on its opponents, engaged in a behind-the-scenes game with Russian autonomies, promising to raise their “national and statehood identity.” Today, the participants in these processes are pointing the finger at one another. But one thing is clear – their actions led inevitably to disintegration and separatism. They did not have the courage, or the responsibility, or the political will to successfully and insistently defend the territorial integrity of the Motherland. 

That which the initiators of the “sovereignty-related undertakings” had, perhaps, failed to realize, was very clearly and rapidly understood by everyone else – including those living outside of our state. And the consequences were immediate.

After the country’s collapse, we found ourselves on the verge of, and in certain regions, beyond the brink of a civil war, one that was ethnically motivated. With great efforts and great sacrifice, we were able to subdue these flashpoints. But that, of course, does not mean that the problem has been resolved.

However, even at a time when the state, as an institution, was critically weakened, Russia did not disappear. What happened was exactly the process described by Vasily Klyuchevsky, writing about the first Russian revolution: “When the political ties of public order fractured, the country was rescued by the moral will of the people.”

Incidentally, our November 4th holiday – National Unity Day – which some superficially call “the day of victory over the Poles,” is in reality “the day of victory over oneself,” over internal animosity and strife, when classes and nationalities acknowledge themselves as being one community – one nation. We have the right to consider this holiday the birthday of our civil nation.

The historic Russia is neither an ethnic state nor an American “melting pot”, where everyone is, one way or another, an immigrant. Russia emerged and for centuries developed as a multi-ethnic state – a state with an ongoing process of mutual adjustment, mutual understanding, and unification of people through families, friendship and work, with hundreds of ethnicities living together on the same land. The development of these vast territories, which has filled the whole of Russian history, was a collective effort of many nations. Suffice it to say that ethnic Ukrainians live on the territory, stretching from the Carpathians to Kamchatka – just as do ethnic Tatars, Jews, Belarusians…

One of Russia’s earliest philosophical and religious works, The Sermon on Law and Grace, rejects the very theory of a Chosen People and preaches the idea of equality before God. Meanwhile, the Primary Chronicle illustrates the multiethnic nature of the Old Russian state as follows: “Everyone speaks Slavic in the Rus: Polans, Drevlians, Novgorodians, Polochany, Dregovichs, Northerners, Buzhans…But other peoples: Chud, Meria, Ves, Muroma, Cheremis, Mordvins, Perm, Pechera, Yam, Lithuania, Kors, Narova, Livs – these have their own languages…”

It is this special quality of Russian statehood that was outlined in Ivan Ilyin’s works: “Not to eliminate, not to suppress, not to enslave other people’s blood, not to stifle the life of different tribes and religions – but to give everyone breath and the great Russia…to honor all, to reconcile all, to allow everyone to pray in their own way, to work in their own way, and to engage the best in public and cultural development.”

The core, the binding fabric of this unique civilization – is the Russian people, Russian culture. And it is this core that various instigators and our opponents will make every effort to tear out of Russia – with false assertions about Russians’ right to self-determination, “racial purity”, the need to “finish the job of 1991 and complete the destruction of the empire, sitting on the necks of the Russian people” – in order to ultimately force people to destroy their Motherland with their own hands.

I am deeply convinced that attempts to promote the idea of creating a Russian “national” mono-ethnic state contradict our thousand-year-old history. Moreover, it is the shortest path towards the destruction of the Russian nation and Russian statehood – as well as any viable sovereign statehood in our land.

When they start screaming: “Stop feeding the Caucasus,” just wait, as tomorrow a new call will inevitably follow: “Stop feeding Siberia, the Far East, the Ural, Volga, Moscow region…” This is the recipe followed by those who brought the Soviet Union to collapse. As for the infamous idea of national self-determination, which has been speculated on repeatedly by various politicians – from Vladimir Lenin to Woodrow Wilson – while fighting for power and political dividends, the Russian people have long self-determined themselves. Self-determination of the Russian people – a poly-ethnic civilization, held together by a Russian cultural core. This determination has been confirmed many times over by the Russian people – and not in plebiscites or referendums, but with blood. Throughout the entire 1,000 years of history. 

­A shared cultural code

­The Russian experience of national development is unique. We are a multi-ethnic society, but we are one people. This makes our country complex and multidimensional, providing colossal opportunities for development in many areas. However, if a multi-ethnic society is struck by the bacilli of nationalism, it loses its strength and stability. And we must understand the types of far-reaching effects that can come as a result of condoning attempts to incite ethnic strife and hatred toward people with different cultures and different beliefs.

Civil peace and inter-ethnic accord is not a once-established and forever-set-in-stone picture. On the contrary, it is an unending dynamic, a dialogue. It is meticulous work of the state and society, requiring very delicate decisions, balanced and wise policies, capable of ensuring “unity in diversity”. It is necessary to not only adhere to mutual obligations, but also to search for common values. We cannot force people to be together. And we cannot force people to live together because it is convenient, based on weighing the costs and benefits. These “calculations” work until a crisis strikes. And when it does, they start working in reverse. 

The confidence that we can ensure a harmonious development of a multicultural community is based on our culture, history and type of identity.

We recall that many citizens of the Soviet Union who found themselves abroad now call themselves Russian. And they consider themselves as being such regardless of ethnicity. It is also interesting that ethnic Russians have never, not in any emigration, formed stable national diasporas, despite having a significant quantitative and qualitative presence, because our identity has a different cultural code.

Russian people are nation-forming – on the basis of Russia’s existence. The great mission of Russians is to unite and bind our civilization. Language, culture and “universal kind-heartedness,” according to Fyodor Dostoevsky, are what bring together Russian Armenians, Russian Azerbaijanis, Russians Germans, Russian Tatars… Bring them together to form a type of state-civilization that does not have “ethnic persons” and where differentiation between “us and them” is determined by a common culture and shared values. 

This civilizational identity is based on the preservation of a Russian cultural dominance, which flows not only from ethnic Russians, but all carriers of this identity regardless of nationality. This is the cultural code that has, in recent years, been subject to some serious trials, which people have tried and continue to try to break. And it has, nevertheless, prevailed. At the same time, it needs to be nourished, strengthened, and protected.

This is where education can play a great role. Our choice of educational program, the diversity of our education – are our undeniable achievements. But diversity must be based on unshakable values, fundamental knowledge and worldview. The civil goal of education, of the education system, is to give every person sufficient knowledge of the humanities to form the basis of collective self-identity. And this should mainly include an increased role being played in the education process by such subjects as the Russian language, Russian literature, and national history – of course, in the context of the entire wealth of national traditions and cultures.

A movement for the study of the Western cultural canon emerged in some of the leading American universities in the 1920s. Every self-respecting student was supposed to read 100 books from a specially-designed list. Some US universities continue to hold on to this tradition. Our nation has always been a nation of readers. Let’s survey our prominent cultural leaders and compile a list of 100 books that must be read by every Russian high school graduate – and not simply regurgitated in school, but read in their own time. And let’s make the writing of a composition based on those texts a part of the final exam. Or let’s at least give young people an opportunity to display their knowledge and worldview in competitions and contests. 

Similar demands need to be made by the state policy in the field of culture. This applies to such tools as television, cinema, the Internet, and popular culture in general, which shape public opinion and set behavioral examples and norms.

Recall how, with the help of Hollywood, the US shaped the consciousness of several generations – and did so while introducing not the worst-possible values, in terms of national interests and public morality. There is something to learn here.

I’ll stress that no one is encroaching on artistic freedom – I am not talking about censorship or “official ideology,” but about the fact that the state must and has the right to direct its efforts and resources toward the resolution of recognized social and public problems. This includes the establishment of a worldview that binds the nation.

Our nation, where in the consciousness of many there is still an ongoing civil war, where the past is highly politicized and “torn” into ideological quotes (often interpreted by various people as precisely the opposite of what they should mean), requires subtle cultural therapy. A cultural policy that, on various levels – from school subsidies to historic documentation – would form an understanding of the unity of the historic process that would allow representatives of every ethnicity – as well as descendants of a “red commissioner” or a “white officer” – to find their place, to feel equal heirs of the “one for all” controversial, tragic, but great history of Russia.

We need a national policy strategy based on civil patriotism. Any person living in our country should not forget their faith and ethnicity. But before anything else, he must be a citizen of Russia and be proud. No one has the right to put ethnic and religious considerations above the state laws. However, the state laws need to take into account ethnic and religious considerations.

I believe that, within the federal government, there needs to be a special structure responsible for issues concerning national development, inter-ethnic harmony, and inter-ethnic reciprocity. Today, these problems are handled by the Ministry of Regional Development and, with the myriad of current tasks, are often relegated to second or even third place – and this situation needs to be corrected.

It doesn’t have to be a standard agency. Rather, it could be a collegial body that works directly with the country’s president, the head of the government, and has a certain amount of authority. National policy cannot be developed and implemented exclusively in the cabinets of officials. National and community organizations must be directly involved in its discussion and formation.

And, of course, we are counting on an active involvement in this dialogue of Russia’s traditional religions. The foundations of the Christian Orthodox Church, Islam, Buddhism, Judaism – with all of their differences and peculiarities – include basic, shared moral, ethical, and spiritual values: compassion, reciprocity, truth, justice, respect for elders, family and work values. These value systems cannot be replaced by anything: and we need to reinforce them.

I am confident that the state, society, should welcome and support the work of Russia’s traditional religions in the system of education and information, in the social sphere, and in the Armed Forces. At the same time, the secular nature of our state must, of course, be preserved.

­National policy and the role of strong institutions

­Systemic problems in society are often expressed in the form of inter-ethnic tensions. We should always keep in mind that there is a direct correlation between unresolved socio-economic problems, flaws in the law enforcement system, government inefficiency, corruption, and ethnically-motivated conflicts. If we look at the history of all the recent inter-ethnic incidents, we will notice this “trigger” in practically all of the cases: Kondopoga, Manezh Square, Sagra. 

Everywhere we are seeing a keen response to the absence of justice, the lack of responsibility and inaction of certain state representatives, impunity for criminals and disbelief in equality before the law, the conviction that everything can be bought and there is no truth.

When we start talking about infringement of the rights of Russians in Russia, and especially on Russia’s historic territories, this indicates that the government structures are failing to perform their direct obligations – to protect the rights, life and safety of citizens. And because the majority of these citizens are Russian, it becomes possible to focus on the subject of “national oppression of Russians” and cover this justified public outcry in the most primitive and vulgar form of inter-ethnic violence, while at the same time, on every possible occasion, wailing about “Russian fascism”.

We need to be aware of the risks and threats that the situations on the verge of ethnic conflicts entail. Law enforcement and government agencies, whose negligence caused ethnic tensions, must be punished, no matter how high the rank or standing of the people involved.

The range of suitable approaches is not that big. Do not assume anything, do not jump to conclusions. We need to carry out a careful investigation of what is at the core of the problem, what are the accompanying circumstances, and settle the conflict in each individual case of hate crime. Unless there are some specific circumstances, all such cases must be processed publicly because lack of transparency encourages the spread of rumors that often aggravate the situation. In this respect, high professional standards and a responsible attitude on the part of the mass media are of paramount importance.

There is no room for dialogue amidst riots and violence. No one should be tempted to pressure the authorities into specific decisions by means of civil disorders. Our law enforcement agencies have proven that they are capable of easily and efficiently suppressing any attempts at doing that.

Another important point is that we have to develop our multi-party democratic system. We are now working on measures aimed at simplifying and liberalizing the procedures of registration and work for political parties. We are working on the initiative to return the elections of regional governors. All of these things are necessary and correct steps. But there is one thing we cannot allow and that is the creation of regional parties, even in national republics. That is a direct path toward separatism. This requirement should certainly apply to the election of regional heads – those who try to rely on nationalist, separatist and similar forces and groups must be immediately, within the framework of democratic judicial procedures, excluded from the electoral process. 

­Migration and our Integration Project

­Today, people are concerned with – or to put it straight – annoyed by the many troubles caused by mass migration, be it from other countries or different parts of Russia. Now, with the Eurasian Union project underway, people are worried that it could increase the flow of migrants and, correspondingly, aggravate existing problems. I believe we must make our position on the issue clear.

Firstly, it’s obvious that we need to revamp the government’s migration policy. And that’s something we are going to deal with.

No country in the world has been able to eliminate illegal migration completely, but it should – and can – be curbed. This is why we need to expand the relevant powers of the police and migration agencies.

However, simply tightening the screws on migrants won’t solve the problem. In many countries, such crackdowns only spur the flow of illegal migration. The principal measure of migration policy is not its toughness, but its effectiveness.

In this regard, we must clearly define our policy concerning legal migration, both temporary and permanent. This implies that the authorities should give priority and grant favored status to those migrants who are highly-qualified, competent, competitive, and are able to adapt both to the local culture and new standards of behavior. Such positive selection procedures and competition for the quality of migrant workers are common to all countries.

Of course, migrants that meet these requirements are easier and better integrated into the recipient society.

Secondly, migration within the country is very high. A lot of people leave their homes to study, live and work in other parts of Russia, in big cities. These are citizens of Russia enjoying full civil rights.

However, if you come to a region with different cultural and historical traditions, you must show respect for the local customs, for the customs of Russians or any other nation living within the country. Any other behavior – inappropriate, aggressive, outrageous or disdainful – must be tackled by a legal but tough response, first and foremost, by the local authorities who today very often neglect the situation. We need to revise the Administrative and Criminal Codes to toughen punishment for such behavior and introduce criminal responsibility for violations of migration regulations and registration rules. Sometimes it’s enough to warn a person. But if the warning is backed up by a specific regulation it will be more effective and properly interpreted – not as a private opinion of some police officer or official, but as a requirement set forth by the law equal to all people.

Of course, there should be civilized norms even for internal migration. It’s vital for the harmonious development of social infrastructure, medicine, education and the labor market. Many regions and cities which have attracted a lot of migrants are suffering from an overload in these areas. This makes the situation complicated both for the locals and the newcomers. This is why we must toughen both our registration rules and the penalties for their violation. But in doing so, we should not undermine people’s constitutional right to choose their place of residence.

Thirdly, we must bolster our judicial branch and make our law enforcement agencies work effectively. This is of paramount importance not just in tackling the issue of foreign migrants, but, in our case, in dealing with internal migration from the republics of North Caucasus. Without these pillars, we will never be able to reconcile the interests of different societies objectively (both the in-group and the out-group) and foster a perception of migration as something safe and fair.

Also, inefficiency and corruption in both the police and the courts will always result in the twin problems of growing discontent and radicalization of the host society, as well as encouraging mob behavior and a shadow black economy in the migrant community.

We must prevent the formation of isolated ethnic enclaves which, instead of being subject to federal law, are often ruled by their own set of codes. It’s the rights of the migrants themselves that will be abused in this case, both by their own underworld bosses and by corrupt officials.

It is corruption that gives rise to crimes committed by certain ethnic groups. In legal terms, crime groups built on ethnic or tribal principles are no different from regular mobs or gangs. However, our current situation is such that these ethnic criminal groups have become more than just an organized crime problem, they have become an issue of national security. And this is something we need to address.

The fourth problem is that of civilized integration and socialization of the migrants. This requires again addressing our education process. And by this I mean not so much adjusting our education system to help us solve migration policy issues (this being far from the most important task for our schools) as boosting overall education standards in the country.

Increasing the attractiveness and value of proper education is a powerful driving force that can encourage migrants to integrate effectively into the recipient society, while low-quality education cements a tendency for isolation and distancing of the migrant communities that can become a long-term tradition, spanning several generations.

It is important to us to provide appropriate conditions for migrants to adapt in society. It is elementary that people who want to live and work in Russia should be willing to learn the Russian language and assimilate into Russia's culture. Exams in Russian, Russian history, Russian literature and the basics of Russian law should be made compulsory for the granting or extension of migrant status. Like other civilized nations, Russia is ready to put forward learning programs for migrants. In a number of cases, we will need auxiliary professional training programs paid for by the migrants' employers.

My fifth suggestion is to curb chaotic migration from post-Soviet states by means of regional integration.

It has been noted before that the main factor driving mass migration in our region are the hugely unequal levels of development of post-Soviet countries. Understandably, a sensible way to curb migration, if not eliminate it completely, would be to eliminate social inequality. A large number of leftist humanitarian activists in the West have spoken in favor of this method. Regrettably, on a global scale, this ethically irreproachable idea looks like a utopia.

Nothing is stopping us from implementing this idea in our own region, however. One of the main purposes of Eurasian integration is to create decent living conditions in post-Soviet states for millions of their people to prosper.

We understand that it is poor economic situations which force migrants to leave their homes and work in uncivilized conditions to support themselves and their families.

From this standpoint, the goals we have set for Russia (a new economy with an effective employment system, revival of professional communities, proportional development of productive forces and social infrastructure across the whole country), and the goals of Eurasian integration are key to bringing migration flows under control. On the one hand, migrants will move where they will cause minimal social tensions. On the other hand, we should provide for a comfortable and decent life in their home cities and settlements. What we should do is to give people the chance to work and live normally at home, in their Motherland – a chance that most of them are currently deprived of. There are no simple solutions for national and ethnic policies. Their components are scattered across all areas of life, and of the state and society – the economy, the social sphere, education, politics and international affairs. We should build a model of state and civilized society that would be equally attractive and comfortable for everyone who calls Russia their Motherland.

We see what is to be done next. We understand that we have a historical experience that no one else has. We can rely on our mentality, our culture, our identity – it’s a unique and powerful foundation.

We will be strengthening the “historic state” that we inherited from our ancestors – a state and a civilization that can solve the task of harmonizing different ethnic and religious groups successfully.

We have been living together for centuries. Together, we won the most terrible war. And we will continue to live together. To those seeking to divide us, I say: “Don’t waste your time.”

source: http://rt.com/politics/official-word/migration-national-question-putin-439/

original Russian text: http://www.ng.ru/politics/2012-01-23/1_national.html