Speaking at a meeting of Russia's State Council, Putin stressed the need for the country to shift from raw materials to an innovative model of development. Russia's only available choice is either to become one of the world's leading nations, or an underdeveloped raw-materials exporter, the president said. He added that he knows how to achieve this ambitious goal. However, officials don't seem to be in a hurry to implement "Putin's Plan".
Today, Mr. Putin, who is stepping down as president this year, gave his final speech at a State Council meeting. His report was dedicated to Russia’s development in the next 12 years. Already before the speech, some parts of the media had christened it Putin's 'will', but in fact Putin showed he is still an active player in the country's political and economic life. It is likely that he will head the future Cabinet that will further develop Russia.
Putin started summing up the results of his presidential tenure. In the late1990s, he said, the "rich Russia turned into a nation of poor people”, describing what the country was like when he became president: Russia was like a patchwork, separatists tried to break it into parts, state administration was inefficient and the economy was largely controlled by oligarchs, he said. That is when Putin began the reconstruction of the country.
It's a shame Putin did not mention that the 'wild' 90s were when Russian business was born.
According to Putin, Russia rose from the ashes during his reign. "We began with restoring constitutional order", he spoke about his first months in office, saying he had managed to control separatism and defeat terrorism in the country. Later on, the lives of many Russians improved, with growing incomes and pensions, as well as reforms of energy, transport and other industries. State corporations were created to take care of 'the most sensitive directions'. Putin also said Russia's state debt was 'one of the world's smallest' at 3 percent of the GDP. Russia is among the 'seven' economies of the world, the president said, with the country's stock market capitalization 22 times higher than that of 1999, beating countries such as Mexico, Brazil and even South Korea. From 2000 to 2007, Russia's GDP increased by 72 percent, and will double by the end of next year, Putin expects.
After giving the audience such a bright picture, he reminded them of the crucial need to leave the raw export development scenario behind. If not, there will be no improvement in the quality of life, no national security, and even the existence of Russian state will be endangered, the president thinks.
Instead, Russia must follow the path of innovation, Putin suggested. And such development will require mass investment 'in the human individual' and new technology. "The most important thing is to realize the human potential, to effectively implement the knowledge and skills of people, to constantly improve technology and the life of society as a whole." Low labor productivity and low life expectancy are Russia's main problems, but they should be overcome by 2020. According to Putin, by that time the Russian economy will become four times more efficient, the death rate will decrease by 150 percent, life expectancy will increase to 75 years and 60 percent of Russians will belong to the middle class.
Russia should become one of the world's most comfortable countries to live in, and to get this done, we need to reform health care and education. Putin suggested relaxing taxes on the money allocated by business and individuals for education and health care. He is convinced relaxation of taxes should continue in Russia, with special options being given to innovative industries, and making VAT as low as possible.
Talking about the development of advanced technologies, Putin pointed to air and space craft, media and medicinal technology, construction of roads and bridges. Hundreds of thousands of jobs are to be created, he said.
The dominating state sector and bureaucracy are hindering business and represent an obstacle on the path to development. Russia cannot afford this enormous state apparatus, where over one third of the population is employed. Private capital should be attracted to the state sector, as Putin believes a private company is often more results-oriented than a bureaucrat and will be more successful in administering various issues.
Putin's 'farewell' speech touched upon all the important issues of the country's development in both the social and economic spheres. The only question is whether officials are ready to implement his plan or not. State Duma speaker Boris Gryzlov is. Parliament can decrease VAT to 12 percent and offer tax preferences for innovative industries.
Yekaterina Shokhina
Photo: RIA Novosti
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