Presidential Address to the Federal Assembly
By President Dmitry Medvedev
The Kremlin, Moscow, November 5, 2008

Main theses as summerized by Kremlin.ru: 

President of Russia Dmitry Medvedev proposed giving the Russian Federal Assembly (parliament) greater constitutional powers. In particular, he proposed giving the State Duma [the lower house of parliament] control functions over the executive branch and making it law for the Cabinet to report to the lower house. He also proposed increasing the President’s term in office to six years, and increasing the State Duma’s mandate to five years.

Mr Medvedev called this simply an adjustment to the country’s Constitution. There is no need to change Russia’s Constitution, adopted 15 years ago, and its basic provisions should remain firmly in place for many years to come, he said.

The President set out in the Address his vision of the laws, objectives and values that form the foundation of Russian society: the Constitution’s decisive role in developing democracy in the country and its importance for building a new legal system, combating corruption and legal nihilism, expanding economic freedom, implementing social guarantees, and consolidating international legality.

Mr Medvedev noted that Russia’s people are far readier now than they were when reforms began to pursue their activities in freedom, and criticised the state bureaucracy. A strong state and an all-powerful bureaucracy are not one and the same thing, he said. Civil society needs a strong state to protect and strengthen democratic institutions, whereas an all-powerful bureaucracy is a mortal danger for civil society’s development.

With the goal of developing democracy, Mr Medvedev proposed increasing the level and quality of public representation in government and encouraging people to become more actively involved in political life. The President also made proposals concerning representation of small political parties in parliament, the right of parties that have won regional elections to name candidates for the highest executive posts in the region, new principles for the formation of the Federation Council ­ the upper house of parliament, specific changes to the law on political parties and other issues.

Mr Medvedev said that freedom of speech should be ensured through technological innovation and the spread of a free internet space and digital television.

The President focused particularly on combating corruption and gave a detailed presentation of prevention measures designed to ensure there is no advantage to be gained from corrupt behaviour. He referred to the package of anti-corruption draft laws already drawn up and said that alongside legal measures efforts must be made to improve the government system itself by optimizing and clarifying the different state agencies’ powers.

Mr Medvedev also examined the judicial system’s development and listed concrete steps for its improvement.

The President addressed the issue of migration, both within the country and from outside, as well as the question of obtaining Russian citizenship.

Mr Medvedev said that the Russian nation’s unity is the guarantee for its stability and civilised development, and that interethnic peace is one of its greatest values.

Mr Medvedev devoted the next section of his Address to the issue of human resources and the extensive and systemic recruitment of talent. Russia’s future lies in an innovative economy, and this calls for a new system of building up a human resources pool, the President said. He issued an instruction giving the Government and the Presidential Executive Office until the end of the year to launch a programme in this area jointly drafted by the state authorities, local government, and public organisations.

To resolve the human resources problem, the country’s education system needs to undergo a revival, Mr Medvedev said. He noted that its past achievements won it recognition all around the world, but its backwardness today is threatening Russia’s ability to compete. The President focused particularly on primary- and secondary-level education and outlined the main goals and means of its modernisation. He instructed the Government to draw up in the nearest future new principles not just for the way schools work but also for their design, construction, and equipment and technical resources base. The President also emphasised the important part schools play in developing a healthy population.

On the subject of modernising healthcare in general, Mr Medvedev said that a state programme in this area will be adopted before the year ends.

The Address also examined the issues of medical and pension insurance.

Mr Medvedev said that in these vital areas ­ education, healthcare and pensions ­ people should see clearly the results of economic growth and be able to understand how the fruits of growth are distributed.

In the section of the Address dealing with international affairs, Mr Medvedev drew a number of conclusions from the events in the Caucasus, which have gone beyond being a local conflict in importance. First and most important is that a new geopolitical situation is emerging. Second is that Russia’s Armed Forces have restored their combat capability. Mr Medvedev said in this respect that Russia will not allow itself to be drawn into an arms race, despite the construction of a global missile defence system, the encircling of the country with military bases, and NATO’s expansion. The President listed a series of measures that will be taken as an effective response above all to U.S. deployment of elements of its global missile defence system in Europe.

Mr Medvedev noted the importance of the integration nucleus formed by the Union State of Russia and Belarus, the Eurasian Economic Community, and, in the military-political sphere, the Collective Security Treaty Organisation.

The President condemned the double standards applied to Russia’s recognition of South Ossetia’s and Abkhazia’s independence. He said that many negative tendencies have built up in the world over recent years, and only through collective efforts can answers be found to today’s new challenges. This is why Russia supports carefully planned reform of the United Nations and bolstering its role.

Regarding relations with the United States, Mr Medvedev said that Russia has no issue with the American people and no inherent anti-Americanism. He said he hopes that the new administration in the USA will make a choice in favour of full-fledged relations with Russia.

Mr Medvedev mentioned his initiative to draft a new treaty on European security. He also declared a commitment to deepening the dialogue with the European Union and continuing work together with Russia’s European partners.

The Address also set out the principles for Russia’s practical work on the international stage. These principles include strengthening the legal foundations of international relations, developing a polycentric world system, and participation by Russia in different groups such as the G8, the Shanghai Cooperation Organisation, BRIC, the Asia-Pacific Economic Cooperation forum and others.

The President also set out Russia’s proposals on creating a new world financial architecture and proposals drafted for the G-20 summit in Washington on November 15. The minimum set of goals includes developing a new risk assessment system, introducing modern technology for disclosing objective information on market participants and their operations, harmonising accounting standards, and increased capital requirements for financial institutions.

Mr Medvedev also spoke about the steps being taken to turn Russia into a leading financial centre, boost the rouble’s role and move over to settlements in roubles for raw materials exports, above all oil and gas exports.

The President also spoke about diversification of relations with the members of the Eurasian Economic Community, the CIS, the EU, China, India and other big Asian partners, and noted too the opportunities opening up in Latin America and Africa.

Russia is ready for mutually beneficial cooperation with all countries and groups committed to developing constructive relations. Geography is not important, Mr Medvedev said. What is important is a positive spirit and mutual interest.

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Full text, translated to English as provided by Rossiya TV (subheadings inserted editorially):

Dmitry Medvedev: Esteemed citizens of Russia. Esteemed deputies and Federation Council members.

I will start my address with an assessment of the current year's events. In 2008, renewal of key institutions of government has taken place in our country. Based on the results of the presidential election, a new government was formed. Parliamentary parties in the new State Duma set about working at full tilt. Implementation began of new plans for long-term development of the economy and the social sphere. Factories and roads are being built, the army and navy are being re-equipped, new technologies are being applied, education, science and medical centres are being established, and our athletes are showing us examples of brilliant victories.

USA blamed for war in Georgia, financial crisis

However, for our citizens, for all of us, this year has not just been a year of new hope and achievement. Events have taken place that became, I am sure, very significant literally for everyone in our country and simultaneously a serious test for the whole of Russia. They are the barbarous aggression against South Ossetia and, of course, the global financial crisis, which is gaining momentum. Although these are two very different problems, they have common features and, one could say, common origins. The Georgian army's attack on Russian peacekeepers spelt tragedy for many thousands of people, for entire peoples. As a result of this provocation, tension in the entire Caucasus region has increased sharply. The conflict in the Caucasus has been used as a pretext to deploy NATO warships in the Black Sea and then impose on Europe, in an accelerated manner, American anti-missile systems, which will naturally lead to Russia's response I am going to discuss again later.

Thus, a local adventure by the Tbilisi regime has led to a rise in tension far beyond the region, in the whole of Europe, in the whole of the world. It has cast doubt on the effectiveness of international security institutions and effectively destabilized the foundations of global order.

The world financial crisis also began as a local emergency, on the US national market. Being closely linked to the markets of all developed countries while being the most powerful of them, the US economy dragged down the financial markets of the whole planet and this crisis also acquired a global nature. In our interconnected world, some local problems tend to become universal.

We have long since made a choice for profound integration into the world economy. We understand our responsibility. Having gained a significant advantage in the time of the rapid growth of the world economy, Russia, together with other countries, is ready to fight the difficulties caused by its slowdown.

However, mechanisms need to be created to block mistaken, selfish and sometimes outright dangerous decisions by some members of the international community. There is no point denying the fact that the tragedy of Tskhinval(Tskhinvali) was, apart from everything else, a consequence of the US administration's arrogant course that is intolerant of criticism and relies on unilateral decisions. I think that the idea that emerged after the break-up of the Soviet Union that their view is the only correct one and cannot be challenged eventually drove the United States authorities to blunders in the economic sphere. While inflating the money balloon to stimulate their own growth, they did not bother to coordinate their decisions with other players on global markets and, moreover, abandoned the basic sense of proportion and disregarded numerous warnings from their partners, including our warnings, by the way. As a result, they harmed both themselves and others.

Russia to insist on radical political, economic reform in the world

Yet, as they say, every cloud has a silver lining. The lesson of mistakes and crises of 2008 has proved to all responsible nations that it is time to act and that radical reform of the political and economic systems is needed. Russia, at least, will insist on that. It will work together in this area with the United States of America, the EU, the BRIC countries and all other interested parties. We will do everything possible to make the world more just and secure. (Applause) I am sure that that is what will happen because our country is strong both economically and politically.

The hostilities of August and alarming news from world markets clearly revealed the maturity of civil society and the political unity of the state. I am pleased to note, and I am sincerely grateful for this, that the country's largest political movements showed solidarity over the events in the South Caucasus. (Applause) The anti-crisis measures aimed at stabilizing the economy have also been met with understanding.I do not think it could be otherwise because we speak of a people that has a thousand-year history, has developed and civilized a huge territory, has created an unrivalled culture and powerful economic and military potential, and has operated on the solid foundation of values and ideals that have been developed, defended and tested over the centuries.

Russian values

I wish to say special words about our values, social ideals and moral principles. I am not going to lecture anyone on morals or resort to abstract arguments. The job of Russia's president is very specific and practical.But I will tell you sincerely, based on what is now my own experience, that it is far from easy to take decisions directly affecting the lives, in the very literal sense of the word, wellbeing and health of thousands of people as well as the reputation and future of a great nation. When taking them, you have to be clear that there are things you cannot surrender. There are things which you have to fight for and win. This is something that is dear to you, dear to me and dear to all of us, something we cannot imagine our country without. Our people is spiritually and morally rich. We have things to be proud of, love, defend, protect and strive for. That is why we will not retreat in the Caucasus. (Applause) That is why we will overcome the consequences of the world economic crisis and emerge from it even stronger. (Applause)

And now about the values as such. They are wellknown: Justice, which is understood as political equality of rights, as the honesty of courts, responsibility of superiors, which is realized as social guarantees, which requires to overcome poverty and corruption and seeks to achieve a decent status for each member of society and for the whole Russian nation in the system of international relations; This is freedom, personal, individual freedom, the freedom of entrepreneurship, speech, faith, (the freedom) to choose a place of residence and occupation; and the common, national freedom, self-determination and independence of the Russian state; a person's life, well-being and dignity; interethnic peace, the unity of different cultures; protection of small nations, and the recognition of South Ossetia's and Abkhazia's independence, by the way, is an example of such protection; family traditions - love and fidelity, taking care of the young and the elderly; patriotism, coupled with the most sober and critical look at the national history and at our far-from-ideal present; in any circumstances, always, believing in Russia, a deep attachment to our native land and our great culture. (Applause)

These are our values. These are the foundations of our society, our moral guidelines. Speaking more plainly, these are obvious things understandable to everyone, the common understanding of which is what makes us one people of Russia. This is what we shall not renounce under any circumstances. (Applause)

Political freedoms, private property inviolable

Our values also form our ideas about the future. Our goal is a just society of free people. We know that Russia will be a prosperous democratic country, (it will be) strong and at the same time comfortable for living, the best (country) in the world for the most talented, demanding, self-reliant and critically-minded citizens.

I want everybody to know, our goals are unchangeable. Dramatic fluctuations of the political and economic environment, the turbulence of the world economy, and even the military and political tension that is being stirred up will not become an excuse for us to disassemble democratic institutions to nationalize industry and finance. Political freedoms of citizens and private property are inviolable. (Applause) I would like to stress again - the state will fulfil all its obligations to the people. (Applause)

Citizens' savings, the level of pension security, all social guarantees should be the object of closest attention, of everyday work and unconditional responsibility of the Russian government, of the executive power at every level. In this respect, I would like to remind the heads of ministries, departments, constituent parts of the Russian Federation, local governmentbodies: in accordance with Article 7 of the constitution, the Russian Federation is a social state (interrupted by applause) that ensures free development of a person and, at the same time, sets guarantees of social protection. Consequently, infringement of civil freedoms or actions aimed at deteriorating the material well-being of the people are not only immortal, they are also illegal.

Anticrisis measures

Much has been already done to protect our economy from external risks. It is not in vain that we have been accumulating gold, currency and budget reserves, it is not for nothing that we have switched over to medium-range budget planning. And we took urgent measures to normalize the situation as soon as the global crisis started influencing our financial system. The government adopted a programme of actions to minimize the after-effects of the crisis in Russia, to invigorate the banking system and support some sectors of the economy. The most important thing today is to implement these measures in full. I would like to draw the special attention of the government, the Bank of Russia, every stateorganization: it is unacceptable to hesitate over the fulfilment of these measures. First and foremost, the existing financial clots in the economy should be cleared, so that the allocated resources reach their final recipients. (Applause) I mean enterprises in such important sectors as agriculture, construction, machine-building and the defence-industrial complex, as well as small enterprises. At the same time, every rouble should be spent effectively, that is to say, sensibly.

We must not get carried away; the economic crisis is far from over. Throughout this period, we must remain extremely focused and pay maximum attention to both the efficiency of our work and the validity of new plans and programmes. This concerns the state, business and each person. I am certain that we shall overcome all the difficulties and will, in the near future, establish a modern, independent financial system, capable of countering any external challenges and ensuring stable solutions to our own tasks.

Trust and cooperation are what we need today the most. And we must not postpone the implementation of our strategic programmes even for a day. In current conditions, we should be acting in a pre-emptive manner, as never before. It is now that we need to create the foundation of national competitiveness, in areas in which we can reap benefits and advantages in the future. We should quickly fill the niches emerging in the world economy, create new efficient enterprises and implement most advanced technologies. This approach is one of the best anti-crisis medicines and, on the other hand, an inseparable part of the ideology of development of modern Russia.

Our economic actions will be based on the concept of four i's, which has already been announced: institutions, investment, infrastructure and innovation. This approach is also enshrined in the government's development concept for the period to 2020. We should realize it in full, adding to it, as I have once said, a fifth element, intellect.

Our priority is the production and, in the future, export of knowledge, new technologies and advanced culture, and therefore the achievement of leading positions in science, education and art. We must be at the frontline of innovation in the main sectors of the economy and public life. As far as these goals are concerned, neither the state nor business should be penny-pinching, even in difficult economic times. (Applause) The basis of our policy should be an ideology centred on human being, on a person and citizen who is guaranteed equal opportunities from birth, whose success in life depends on his personal resourcefulness and self-reliance, on his ability to innovate and work creatively. At present, this is more important to us than at any time in the past. I repeat, we simply must concentrate on our national priorities. Therefore, the worst thing that can happen today is the use of the current situation for score-settling, unfair competition, which includes the use of government resources. I draw the attention of civil servants, employees of law enforcement bodies and company officials to the inadmissibility and immorality of such actions today. Today it is easy to gain reputation, but is just as easy to lose it. It will take one a very long time to regain it, if it is possible to do it at all.

My advice to those who may want to make an easy political capital out of the global economic crisis, those who are geared to engage in populist idle talk, those who want to destabilize society to satisfy personal ambitions is to read the constitution. I consider it my duty to warn those who hope to provoke deterioration in the political situation. We will not allow the incitement of social or ethnic discord, or for the people to be deceived or drawn into illegal activities. (Applause) Constitutional order will continue to be ensured through the use of all legal means. (Applause)

Praise for Russian constitution

I will recall that December will mark the 15th anniversary of the Russian constitution. It is not just about an anniversary, but above all about the fact that it is the constitution that sets freedom and justice, human dignity and wellbeing, protection of the family and the fatherland, the unity of the multiethnic people as not just universally recognized values but also as legal concepts. That is to say, it gives them practical power and supports them with all of the state's resources, with all the authority of the basic law itself, forms social institutions and the way of life for millions of people. It is precisely because of this that in my first address to the Federal Assembly I consider it necessary to outline my vision of the fundamental norms of our life, the goals and values of our society enshrined in the Russian constitution and therefore directly influencing all the aspects of the internal and external policies.

I will briefly analyse the way in which these goals and values ensured the development of Russian statehood, and will discuss the following subjects. The first is the decisive role of the constitution in the formation of the Russian democracy. I have already said that the degree of freedom it guarantees to a person, the maturity of democratic institutions and procedures is a source of our further rise. And when setting tasks for a new stage of development we must ensure broad involvement of citizens, political parties and other public institutions in their resolution. I will name them too today.

The second subject is the importance of the constitution for the formation of a qualitatively new legal system and an independent judiciary, for getting rid of corruption and legal nihilism. I will note that the latter did not appear in Russia yesterday. Its roots go deep into our past. And 15 years is a very short period for overcoming such engrained practices. However, it is also true that we have not yet been dealing with this problem, the problem of neglect of law, in a systemic and through manner.

The third is the constitution and further expansion of economic, entrepreneurial freedom. Success of the middle class, the growth of small and medium-sized business and the formation of an innovative economy depend precisely on this.

The fourth is the realization of the social guarantees enshrined in the constitution, salaries, allowances, pensions and savings. I will repeat that in this difficult period the state will be fulfilling its obligations, obligations to the citizens. By the way, I would like to recall that the constitution also bans the promotion of social superiority. In our country, this norm, this moral norm is also a legal norm.

Finally, the fifth subject is the constitution and the strengthening of international law. It is known that it is achieved through the implementation by the states of their national constitutions, obligations to follow international agreements and treaties. Therefore, the better the states' actions in the international arena meet the international legal norms, the higher the degree of security on the planet.

Esteemed colleagues, the constitutionpredetermined a path of renewal for Russia as a state of an independent people, as a society to which the rights and dignity of each person is the highest value. The cult of the state and the alleged wisdom of the administrative apparatus reigned in Russia for centuries. A person, with his rights and freedoms, personal interests and problems, was viewed as a tool, at best, or, at worst, as impediment to the strengthening of state might.

I will repeat that this was the case for centuries, and I would like to quote Petr Stolypin, who said that first we need to create a citizen, and when this task is accomplished civic consciousness will set in in Rus. First, a citizen, then civic consciousness. In our country, normally the opposite is preached.

Therefore, the adoption in 1993 of the basic law, which pronounced human being, his life, his rights and property as the highest value, was an unprecedented event in the history of the Russian nation. And we should thank everyone who took part in the drawing up and coordination of this document. (Applause)

By the way, some of them are present in this hall. (Applause)

Democracy and bureaucracy

In our days, at the new level of development, Russian society confirms its adherence to the democratic values of the constitution. On the whole, it has embraced democratic habits, practices and procedures. Unlike in the recent past, our citizens no longer associate the democratic structure with chaos, powerlessness or degradation. New Russia has proved its ability to fulfil social obligations and ensure economic growth, guarantee citizens' rights and demand law abidance, and successfully fight terrorism and external aggression.

Now it is not a question of whether democracy can exist in Russia, as it used to be not so long ago, only 15 years ago. It is clear that democracy can exist in Russia. This is obvious and nobody is arguing with this. The question now is about the way Russian democracy should develop in future. I believe that Russian citizens are much more ready for free enterprise, professional as well as social and political, than at the beginning of the reforms, enterprise without state guardianship. More and more people are relying on themselves, first and foremost. They believe that their personal success and consequently the success of the whole country, depends on them. This is why it is not only possible but necessary to increase the level of trust in society. (Applause)

Meanwhile, state bureaucracy is still - as well as 20 years ago - going by the same mistrust of free people and free enterprise. This logic prompts it (bureaucracy) to make dangerous conclusions and take dangerous steps. Now and then bureaucracy makes life a nightmare for business - what if they do something wrong; it takes the media under its control for them not to say something wrong; it meddles in the election process - for people not to elect somebody wrong; it pressurizes courts for them not to bring in wrong verdicts, and so on. (Applause) As a result, the state machine is a major employer, the most active publisher, the best producer, as well as its own court, party and its own nation, in the long run. A system like this is not al all effective and creates one thing only - corruption. (Applause) It gives birth to mass legal nihilism. It contradicts the constitution, puts brakes on the development of innovative economy and democratic institutions. A strong state and omnipotent bureaucracy are not the same thing. A civil society needs the former as a tool to develop and support order, to protect and strengthen political institutions, while the latter is mortally dangerous for it. This is why our society should develop democratic institutions in a calm, persevering way and not putting it off.

Democratic institutions, which have been created in the past few years, and, let's be honest, on an instruction from the top, must take root in all social layers. To do this, we need constantly prove the viability of democratic order, and second, entrust more and more social and political functions directly to citizens, their organizations and self-governing bodies.

No, the state must not renounce responsibility for its sphere of authority and we must act pragmatically, soberly assessing risks, but action is really needed.

Proposed changes to political system

Therefore, first of all, I suggest that measures should be taken to further increase the level and quality of popular representation in the authorities, measures which can ensure people's better involvement in political life.

Over 90 per cent of voters cast their votes for parties that passed to the State Duma in 2007. At the same time almost 5m people, 5m our citizens voted for parties that did not make it to the State Duma. These people were not represented on the federal level, even though they both showed civic initiative and simply came to polling stations. This is not fair and should be corrected. Having said that, I do not yet deem it necessary to lower the threshold set for deputies for passing to the State Duma. Thus my first proposal is to give representation guarantees to electors who voted for so-called small parties. I believe that parties that received from 5 to 7 per cent of votes could secure one or two seats in the parliament. (Applause)

This will allow us, on the one hand, to preserve the system of rewarding and strengthening larger parties - what we have been doing in the last few years, - parties which constitute the backbone of the national political model. On the other hand, this measure will give the floor in the parliament to smaller parties which represent the interests of a significant number of people.

Second, I believe that candidates for the posts of leaders of the executive in the constituent parts of the Russian Federation should be presented to the president only by parties which muster a majority of votes in local elections, and nobody else. Thus, the exclusive right to nominate candidates will be entrusted to public, open political structures which represent the main part of the country's population.

Third, the use of monetary deposits at elections at all levels should be abolished. (Applause) It is the people's opinions, the reputation of a party and the voters' trust in its programme, not money, that should decide whether (the party) takes part in elections. We should also discuss the possibility of gradually reducing the number of voter signatures collected for the participation in (elections to) the State Duma. And the parties that in the next State Duma election manage to win over five per cent of the vote, or those that have created factions in more than a third of regional parliaments, should be fully excused from the requirement to collect signatures. Let me remind you that today only the parties that have factions in the State Duma have this privilege.

Fourth, the Federation Council should be formed only by persons elected to representative bodies of power and deputies of local government(bodies) of the relevant constituent part of the federation. (Applause) The so-called local residence requirement, which requires that a member of the Federation Council must have lived in a certain region for a certain number of years should be abolished. (Applause) As a result, citizens working in the Federation Council will be those who went through the procedure of public election, with experience of working with voters, who will represent not only bodies of power of the constituent part of the federation but also, most importantly, will directly represent its population. The necessary changes should be carried out without disruptions and endless personnel transfers, by setting a transition period and undertaking measures to preserve the cadre potential of the Federation Council.

Fifth, the minimum number of members required for a new political party to register should be gradually reduced.

Sixth, there should be amendments made to the law on parties that will stipulate to carry out a rotation of the governing party apparatus, according to which one and the same person cannot hold certain leadership positions in the party apparatus longer than a specified period. (Applause)

Seventh, representative bodies of local government should have the possibility to control more efficiently and, if necessary, remove from office the heads of municipalities. (Applause) The issue of raising the level of responsibility of municipality heads for the quality and results of their work is overdue. Giving such serious powers to representative bodies of local government implies that, in turn, the requirements for the quality of their own work will be raised too. They should be elected with very active participation of both political and non-political associations of local residents - human rights, volunteer, charity and educational associations. Let me remind you that the right of not only political parties but also public organizations to submit electoral lists in municipal elections is defined by the law. However, for the time being, most parties and public organizations are poorly represented in municipal councils. This provision of the law should become effective.

Eighth, please consider additional measures to involve representatives of nongovernmental organizations and the Public Chamber in drafting legislation. I think it would be useful to require their mandatory participation in the consideration of drafts bills on the most important issues for every person - individual freedom, issues of health and property (ownership). Consequently, amendments should be made to the rules of procedure of the State Duma and the Federation Council.

Ninth, parliamentary parties should have clearly defined guarantees of coverage of their work in the state mass media. (Applause)

Tenth, the freedom of speech should be ensured by technical innovations. Experience shows that trying to persuade officials to leave the media alone is practically useless. Instead of trying to persuade them, we should more actively expand the free space of the Internet and digital television. No official is able to block discussions on the Internet or simultaneously censor 1,000 channels. I am sure that the measures I named will contribute to improving the quality of people's representation and a fuller consideration of people's interests, will strengthen citizen's trust in the authorities and the solidarity of society.

Extension of presidential, parliamentary term of office

Esteemed citizens of Russia, dear friends, I have outlined quite specific decisions aimed at developing civil society and democratic state. They are dictated by the desire to see our Russia, in the near future, a developed and progressive country comfortable for living, a prosperous community of free people, based on just laws. These are the priority tasks that will be resolved without delay. There is no doubt whatsoever that we will continue democratic transformations together. There is a lot of work and serious steps ahead - further decentralization, the humanization of social arrangements and the political system. The more diverse and free the public life, the more dynamic the economy and the more intense political competition, the stronger and more stable the fundamental institutions of democracy should be - its supporting structures, figuratively speaking, on which the whole building of a democratic state is based.

I think many will agree with me that the Russian political culture, as well as our public opinion, gives this role to the president and the federal parliament, the two institutions of the highest state power that are distinguished, first and foremost, by the fact that they are elected by popular vote and act on behalf of the whole country.

I believe that our progress towards freedom and democracy will be successful and steady only if the authority of the president and the State Duma will be sufficiently high and based not only on pre-election promises but also on practical results of their activities, (and only) if they have enough time to realize everything they declared in practice, to demonstrate the results of their work to people in reality and to report on them to the voters and to the country. Today, when long-term development plans are being implemented and, essentially, tasks of switching over to a new type economy are being resolved, a multitude of very difficult issues will have to be dealt with simultaneously - to counter the global crisis and difficulties of competition, to modernize the army, to govern the gigantic country of the most complicated ethnic and cultural composition, and, in these conditions, to strengthen democratic institutions and maintain stability.

These are not all but the most important reasons in connection with which I am making twoproposals: First, to broaden the constitutional rights of the Federal Assembly and give functions of control over the executive power to the State Duma, under Article 103, (interrupted byapplause) by stipulating a constitutional norm that will obligate the government of Russia to report to the State Duma annually on the results of its activity and on the issues directly set by the parliament. (Applause)And the second proposal is to extend the constitutional terms of office of the president and the State Duma to six and five years respectively. (Applause)

These issues have been raised many times, starting from the 1990s. These topics have been under discussion for a long time. Many referred to history, which has seen a sufficient number of cases when democratic states changed the terms of office of state power bodies. I will not list them, these cases are well known, but I want to say directly - we are talking not about a constitutional reform but, specifically, about adjusting the constitution, about really important but still fine-tuning amendments that do not affect the political and legal essence of the existing institutions. They rather provide a necessary additional resource for their stable functioning. Therefore, a reformist zeal with respect to the basic law is absolutely irrelevant. The Russian constitution is effective, it works, and its basic provisions must remain inviolable for many years to come.The rights and freedoms of citizens, the sovereignty of the people, the state system, the federal system, the principles on which the judiciary is organized, the principles of local government and other foundations of the constitutional system have been established for a long historical period. I, as guarantor of the constitution, will preserve and defend these fundamental tenets. (Applause)

Fight against corruption

Esteemed colleagues. Corruption is the number one enemy for a free, democratic and just society. You know that the national plan for counteracting corruption was endorsed back in July, and I have already sent the relevant package of laws to the State Duma. Their main feature is that they are comprehensive, systemic and targeted at primarily eradicating the causes of corruption borne by the imperfect nature of our state and economic mechanisms. (Applause)

Amendments are already being made to laws regulating the work of employees of customs and internal affairs bodies, the prosecution service and the Federal Security Service, judges and court officials, government, municipal and other bodies.

It is also extremely important that anticorruption work should be based on the use of preventive measures and the creation of an atmosphere in which corrupt behaviour is disadvantageous. What are these measures?

First, much higher requirements are to be set for state and municipal employees. They will have to provide additional information about their incomes and assets, including those belonging to their family members. The accuracy of declared information will be thoroughly checked, which may involve the use of intelligence and investigation capabilities.

Second, state and municipal employees are obliged to abide by the rules of behaviour established at work. Failure to comply should lead to disciplinary and, if necessary, administrative or criminal liability.

Third, criminal liability is being introduced for abuse of office by individuals performing management duties in nonstate organizations. These measures will be on a par with those applied to state employees.

Fourth, administrative liability is being introduced for legal entities for bribes being paid on their behalf or in their interests. A number of other measures, which are already known, are also being introduced.Furthermore, monitoring is being instituted of the property of persons with a special legal status, above all judges.

These measures are undoubtedly tough, but they are necessary. As Nikolay Korkunov, a pre-revolutionary expert on national law, rightly noted, the establishment of law and order is always felt through a reduction in abuses by the powers that be. Here, the choice is apparent to us.

I think that introducing this kind of legislative foundation for various aspects of anticorruption work would be a good start. It would enable us to build it in a consistent and systemic manner. If required, we will also take additional measures. I hope that the entire package of laws will be adopted as soon as possible, and that they will be successfully put into practice.

Naturally, apart from taking legislative measures, we also have to improve the system of state bodies, optimize their powers and make them more specific, guarantee competition and fairness in awarding municipal and state contracts, lift unjustified bans and restrictions in the economic activity sphere, and create conditions for effective and targeted social support for people.

Reform of the judiciary

Now a few words about the development of the judiciary. It is known that the development of an independent and honest judiciary is the foundation of a fair social order. As our democratic state gets stronger, the role of the judiciary can only increase, of course. Problems relating to the establishment of the judiciary have largely been resolved. Among other things, the courts have been granted extended powers to examine complaints concerning the activities of state bodies and officials and compensation for the harm caused by their illegal activities.

Other novelties will also be introduced in the near future. For example, I have commissioned a report about the possibility of issues relating to the work of justices of the peace being moved to federal level. Resolving this issue, despite the expense, will make it possible to complete the formation of a well-shaped hierarchy (Russian: "stroynaya vertikal") of the judiciary.

I will also introduce a draft law reducing the maximum duration for the examination of civil cases and providing for additional liability for creating obstacles leading to delays in legal proceedings. Furthermore, a mechanism should be put in place to compensate for the harm caused through the violation of citizens' right to have their legal case examined within a reasonable period of time and the full and timely execution of court decisions.

Finally, in the near future, a law should be adopted providing for access to information on the work of courts in the Russian Federation. It will apply to all the courts and enable people to obtain accurate information about the operation of the judiciary. Furthermore, it will establish for the first time, in fairly great detail, various forms of making this information public, including through the Internet.

Such changes introduce rules and procedures which are clear to citizens and easy to understand, and which ultimately contribute to the strengthening of the national mechanism for the application of the European Convention for the Protection of Human Rights and Fundamental Freedoms.

In addition, we still have to take a whole range of serious decisions and, above all, ensure strict implementation of these court decisions. This is a most important component of citizens' right to fair legal process. I must stress that the execution of court decisions remains a huge problem. It is a problem for all courts, including the Constitutional Court. There are, of course, various causes everywhere, but I wish to single out one common cause - the lack of real liability of officials, as well as citizens themselves, who fail to comply with court decisions. Such liability should be introduced. (Applause)

Nor should one overlook a matter of principle such as humanization of laws and the rules for their application. The courts should make more judicious use of arrest as a restraining measure and sentences involving isolation from society. (Applause) At the same time, the law enforcement and court systems should ensure effective protection of the rights and interests of victims of crime. The law, as you know, should not be seen merely as a product of practical use but also as a condition for genuinely dignified existence, the famous Russian legal scholar Boris Chicherin wrote.

I suppose that a lively discussion of all the above-mentioned novelties and existing problems at the 7th congress of judges could add major impetus to the reform of the judiciary.

Local government issues

The introduction of the institution of local government has become fundamentally significant to our society and to the strengthening of the state's federal foundations. You know that on these issues the state has largely pursued a policy of trial and error reflecting the experience of other countries and federal models that have developed in the world. But Russia is the only federation in the world with so many constituent parts, nations and confessions. That is why what we are doing today is really being done for the first time.

I will remind you that the transitional period established for the entry into force of all provisions of the federal law on common principles for organizing local government in the Russian Federation ends on 1 January 2009. However, this legislation will continue to be improved. I must add though that on the territory of two constituent parts of the Russian Federation - the Chechen Republic and the Republic of Ingushetia - there is no local government at all. It means that citizens of these republics are unjustifiably deprived of their constitutional rights. I know that the leaderships of these constituent parts of the federation are planning to establish local government bodies by October next year, and I support them on this matter.

Federal vs. regional powers

Now a few words about the further development of Russian federalism. In its modern forms, it was established and formed on the basis of the constitution, and the Constitutional Court played a special part in its establishment. In the court's decisions, a balance was found between the different interests of different levels of power, sometimes sharply conflicting interests. This concerns arguments between federal and regional bodies of power, and arguments about different ways to organize local governments. However, even today we continue to encounter the same problems.

What is the most important thing for us today? First, we must reach an optimal balance in delimitation of powers between the federation and the regions. As you know, a lot of work, one can say a huge work, has been done here. However, every year we still revise the parameters of this delimitation, and make amendments to the list of property which the federal and regional bodies of power need to perform their functions properly.

I believe that we should return to this issue and finally decide what property and how much of it each region needs.

Second, so far we have not found an optimal plan to distribute the territorial structures of federal executive bodies around the country. Incidentally, there are too many of them. Their number must be reduced. (Applause)

We also need a scheme for their efficient cooperation with regional bodies of power. Just to remind you that under the Article 77, Part 2 of the constitution, the federal executive bodies and the executive bodies of the constituent parts of the Russian Federation form a single system. However, this constitutional norm has not been implemented in full. The government must study this issue again and put forward relevant proposals, taking into account the established criteria for assessing the activity of federal executive bodies and the relevant bodies in the constituent parts.

Third, the legislative bodies of the constituent parts put forward many legislative proposals to the State Duma. However, only very few of them become laws because they are insufficiently prepared, because there are many alternative draft laws in the Duma, and on the whole, because the regions have a poor understanding of the legislative process on the federal level. I believe that the Federation Council could play a much more significant part in this matter as coordinator of the legislative activity of the representative bodies of territories. I am asking you to put forward such proposals, taking into account my proposals on the new way of forming it.

Finally, there is another factor which can seriously strengthen our federation. This is support for national traditions and cultures of the peoples of Russia. I believe this is not only a condition for strengthening the federative foundations but also a condition for accord in our society, the unity of the Russian nation as a guarantee of a stable, civilized development of the whole country.

Ethnic relations and migration

I have already said that interethnic peace is one of our values. Historically, we have accumulated unique and rich experience of tolerance and mutual respect. At the same time, problems that can exacerbate relations between different ethnic groups and faiths remain. These include unemployment, especially in regions with a surplus of workforce; lack of legal regulations in land relations; illegal migration, and some other reasons.These problems are particularly acute where social and economic problems are not being resolved, where regional and local authorities are not helping small businesses or not creating jobs.

I particularly note the need to optimize migration processes within the country and create real conditions for increasing the mobility of Russian citizens as an effective tool both to redistribute labour resources and to ensure people's right to labour.

Mechanisms regulating external migration must also be improved. They must be put in law at last, in line with our country's demands and the scale of migration. A flow of migrants, especially from the CIS, continue to arrive in Russia. We know that many of them are trying to obtain Russian citizenship. On the whole, this is a positive process. However, the process of obtaining citizenship must become proof of their successful integration into the life of our society and acceptance of its culture and traditions.

I must note that we must first of all preserve the balance on the labour market and look after the interests of Russian citizens. (Applause)

Education

Esteemed deputies and members of the Federation Council, however ideal laws and strategies are adopted on the basis of the constitution, the implementation of the meaning that has been put into them depends on specific people. Their intellectual energy, creative force, are the nation's main asset and the main resource of progressive development. We must organize a large-scale, systemic search for talents both in Russia and abroad - I would say - carry out real head-hunting, facilitate the influx of young, talented people into fundamental and applied science, speed up the creation of strong state-funded and private centres of development of new technologies, render real help to small and medium-sized business in creating innovative enterprises. I shall stress that all these tasks are tasks for all of us and not just for some new state corporations. This is the task for the whole society and at the same time a chance for everyone to use their abilities.

Today's Russia and its future, innovative economy, the state service, the system of management of social services also need a new system of forming a personnel reserve, which will make it possible to attract the most talented, creatively thinking and professional people to the bodies of state and municipal administration, into business. You know that I have already taken such a decision. Therefore, I am instructing the government and the presidential administration to launch - by as early as the end of this year - a programme of formation and training of a reserve of administrative personnel, which has been developed as a result of joint efforts by the bodies of state power, local government and public organizations. The administrative reserve must contain three levels: the municipal, regional and federal ones. And the most successful administrators must make up the so-called president's thousand. I believe that the best administrators should be known to the whole country. Therefore, information about the most able specialists in various fields of activity should also be included in an all-Russia database.

A revival of the Russian educational system should play the decisive role in the formation of a new generation of professional personnel. Its previous achievements were recognized throughout the world. Today, despite some positive moves, the state of affairs in education leaves much to be desired. It should be said openly that we have already slipped from the leading positions. And this is becoming the most serious threat to our competitiveness.

Apart from that, the educational system in the literal sense of the word forms a personality, forms the nation's very way of life, transmits the nation's values to new generations. The development strategy of Russian education in general will soon be approved by the government. Its implementation will continue both as part of the national project and on the basis of the legislation that has recently been adopted.

Today I shall put the main stress on school education. It represents one of the most determinative and longest stages in every person's life. It is decisive for both individual success and the long-term development of the whole country. Very recently, together with the professional community, we discussed the basic parameters for modernizing the school. Conformity of school education to the aims of forward-looking development should become its main result. The national educational strategy, initiative, our new school, will be developed on the basis of these proposals. (Applause) And five areas will become its constituent parts.

The first area. Children should get the opportunity to develop their abilities and prepare for life in a hi-tech, competitive world as early as in school. An updated content of education should correspond to this task. I am proposing to develop precisely this new generation of educational standards within a short timescale. Their preparation has become protracted.

Second. Concurrently with the implementation of the standard of general education, a far-reaching system of search for and support of talented children, as well as their accompaniment during the whole period of the formation of the personality should be created.

Third. The key role in school belongs to the teacher. And we must develop a system of moral and material incentives to keep the best teachers in schools and constantly improve their qualifications, but what is even more important, to strengthen schools with a new generation of teachers - and in addition, not necessarily those who have a teaching degree. I support the proposal of the educational community to declare 2010 the year of the teacher in Russia. (Applause) And I would like to stress that we shall do everything to ensure that the teacher becomes a respected figure in society. (Applause) But teachers themselves should have a caring attitude towards pupils, have a respectful attitude towards them, should help them become independent, creative and self-confident people.

Four. The very image of schools, both in terms of its form and contents, should change considerably. We shall receive a real return if studying in school becomes fascinating and interesting and if it becomes a centre of not only compulsory education, but also of self-training, engaging in creativity and sport. I am pointing to the idea that the Russian school has no right to be decrepit, both in the direct and indirect sense of this word. We need not just new educational standards, but also new forms of designing school buildings and classrooms, fitting out first-aid posts, canteens and gyms. A child should find it comfortable psychologically and physically to be at school. I am instructing the government to develop new principles of work of schools, as well as the procedure of their designing, building and creating their material and technical basis in the shortest timescale. At the same time it is necessary to use the results obtained in the process of implementation of the Education national project to the full extent.

Five. It is precisely during the school period that a person's health is formed for the rest of their life. Today's statistics of the health of school children is simply shocking. Yes, much depends, of course, on the living conditions in the family, on parents. But one cannot endlessly be hinting at them. Children spend a considerable part of the day in school and teachers should also be dealing with their health. We must leave the averaged approach to this issue. An individual approach should be applied to each pupil - such that minimizes health risks in the educational process, especially because there are also many questions in society to overloaded educational programmes. I am convinced that if the priority of a healthy way of life is implemented at school to the full extent, then we shall manage in a much easier way to create a modern system of health care on the whole. An appropriate state programme should be adopted as early as this year. Mechanisms ensuring the responsibility of doctors and medical organizations for the quality and results of their work will lie at its core. They will widen their possibilities and will at the same time provide an incentive for achieving higher indicators.

Health insurance and pensions

(I will say) a few swords about the compulsory health insurance system. We have to say it openly that it has not become efficient in our country. The rights of the insured people are not fully guaranteed. Despite the right under the law to choose insurance companies, medical establishments and, simply, doctors, there is practically no such choice in real life. With paid medical services on the rise, the voluntary health insurance system is still developing slowly. This does not facilitate in any way the development of a competitive environment in health care.

We will have to gradually but consistently implement a fully-fledged health insurance system, fully-fledged as regards both its scope and cost. The state must ensure that the health insurance system is financially balanced. I draw you attention to the fact that we are dealing with health care issues not for the industry's sake, but in order for life expectancy and the birth rate to grow.

Naturally, we must not forget about the older generation. People of the older generation, of pension age, have the right to a worthy life. Therefore, the pension system can no longer be geared towards abstract, mean pension figures. Each person should be absolutely clear about how he can achieve a certain standard of living as a pensioner, about how much is guaranteed by the state, how much he will receive thanks to the compulsory contributions paid by his employer, and how much he himself needs to save. Fundamental decisions on these issues have already been taken, including increasing the pensions of those who earned part of their pension in the Soviet era. (Applause)

A decision has also been taken to increase pension fund contributions to levels which will allow the payment of European-standard pensions. For the employers this is an additional financial burden, and the government must decide this year how to compensate businesses for this.

Finally, we are starting to implement the approved programme of state co-financing of citizens' voluntary pension contributions. So far, over just five weeks, some 100,000 people have applied for this programme. (Applause)

I think that it is in these spheres, most important spheres such as education, health care and the pension system, that people should be able to clearly see why we need economic growth, what benefits it will bring and how they will be distributed.

Russia's actions in South Ossetia defended

Esteemed colleagues, I already spoke today about the tragic events in South Ossetia. To a large extent, they were determined by serious breaches of international law. Having renounced a peaceful political settlement and legal means, the Georgian leaders chose the ugliest scenario. I want to stress once again that the decision to compel the aggressor to peace and the operation carried out by our military were executed not against Georgia or the Georgian people but in order to save the citizens of the republic (of South Ossetia) and the Russian peacekeepers, to ensure stable and enduring security for the peoples of South Ossetia and Abkhazia, to prevent new bouts of criminal adventurism of the Tbilisi regime.

The Caucasus crisis has shown once again that the use of force by one side in a conflict cannot produce a viable solution. In this connection, on the basis on international norms, we will continue to help eliminate the hotspots of instability in neighbouring regions. Respecting the existing formats, we will help settle the Dniester region and Nagornyy Karabakh conflicts, cooperate with all interested parties, and look for mutually acceptable agreements.

Response to NATO expansion, US missile defence plans

I would like to draw a few conclusions whose importance goes beyond the frame of the conflict. The first and most important conclusion is that the formation of a fundamentally new geopolitical situation has practically been registered. The August crisis only precipitated the arrival of the moment of truth. We really proved, including to those who sponsored the existing regime in Georgia, that we are able to defend our citizens, that we can indeed defend our national interests and efficiently fulfil our peacekeeping obligations. (Applause)

The second conclusion is that our armed forces have to a large extent restored their combat potential. However, the military commanders must analyse not only the successes but also the failures, and learn very serious lessons. As for the rearmament of the army and navy with modern equipment, I have already made the relevant decision and instructed the government. I have approved the new configuration of our country's armed forces.

I will add that from what we have encountered in the last years - i.e. the construction of a global air defence system, the encirclement of Russia with military bases, NATO's unstoppable expansion and other "presents" to Russia - one can get a firm impression that our strength is being tested.

Of course, we will not be drawn into an arms race but we cannot afford not to take this into account while organizing our defence, and the security of Russian people will further be reliably ensured. (Applause)

I will tell you about some of the measures that will be taken, in particular, to effectively counteract (the deployment of) the new elements of the global missile defence system in Europe, which is being persistently, constantly imposed on us by the current administration of the United States. Thus, earlier it was planned to remove three missile regiments of the missile division deployed in Kozelsk from combat duty and to disband the division itself by 2010. I have made a decision to abandon these plans. (Applause) We will not reform anything.

Apart from this, to neutralize, if need be, the (US) missile defence system, the Iskander missile system will be deployed in Kaliningrad Region. (Applause) Naturally, we envisage that the resources of the Russian Navy will be used for these purposes as well. (Applause)

And finally, from the territory of the same western region, that is from Kaliningrad Region, electronic countermeasures will be carried out against the new elements of the US missile defence facilities. (Applause)I would like to emphasize the fact that we were forced to take these measures. We have told all our partners on more than one occasion that we are interested in positive cooperation, we want to act against common threats, we want to take part in joint action. But they, unfortunately, do not wish to listen to us.

Global security architecture and "polycentric" international system

Thirdly, we have an integration core in the shape of the (Russia-Belarus) Union State and Eurasec (Eurasian Economic Community). We will increase the breath and depth of cooperation in the military-political sphere in the CSTO (Collective Security Treaty Organization), and a productive discussion on this issue already took place at the summit in Moscow.

Fourthly, the reaction to the events of 8 August and to the recognition of the independence of South Ossetia and Abkhazia by Russia once again demonstrated that we are living in the world of double standards. We acted responsibly, in the interest of restoring international justice and fairness, understanding that any hesitation or attempts to postpone these steps would have carried the risk of even more serious humanitarian disaster. Against this backdrop, the position of our partners looks overtly prejudicial - not long ago they applied a maximum effort to achieve, in circumvention of the international law, the separation of Kosovo from Serbia and the recognition of this self-proclaimed region as a subject of the international law and now, as if nothing had happened, they criticize Russia.

Fifthly, in the development of the international situation of the recent years, many unpleasant trends have accumulated. Responses to new threats can only be found through collective efforts. This is why we are calling for a considered reform of the United Nations, for strengthening its central role and increasing the effectiveness of its structures and mechanisms. With reliance on this, it is necessary to take steps to develop international regime of control over the armaments, and progress in Russian-US cooperation would be of key significance (for this). It is no secret that many states continue to be guided by where the wind blows in Russian-US relations. Indeed, today these relations are going through not the easiest of periods. We too have many questions, including of moral nature.

However, I would like to stress: we have no problems with the American people. We have no innate anti-Americanism. And we hope that our partners - the new US administration - will make a choice in favour of fully fledged relations with Russia. (Applause)

I would note that the issue of creating a new global security architecture is clearly over-ripe for solution and for us it is particularly important to get results in the Euro-Atlantic space, which unites Russia, the European Union and the USA. I have voiced the initiative to develop a corresponding treaty, a treaty on European security. I repeat, a document of this kind would make it possible to create absolutely clear rules of behaviour that are understandable to all, to put in place a single approach for solving problems and to come to agreed positions for creating reliable instruments for control over armaments. (Applause)

By the way, the settlement of the South-Ossetian crisis demonstrated the possibility for productive European solutions and we will deepen our relations with Europe in the security sphere. I am convinced that they have a good future.

What do I think one needs to focus on in practical work?

First, the work needs to be continued on strengthening the legal foundations of international relations. It is the generally-recognized norms and principles of the international law that should define the rules of the game in world affairs. Everyone developing a habit of measuring his own actions against the international law will facilitate the reduction of the factor of brute force and would reinforce the collective mode of action. Otherwise we will face international chaos and a practical impossibility of preserving international law and order.

Second, the idea of establishing a polycentric international system is more topical now than ever before. This cannot be done without a whole set of measures, including reform of leading international institutions and the strengthening of multilateral diplomacy in general. Together with all other interested parties we will be building a genuinely democratic model of relations without allowing unilateral domination in any sphere. In general, arrogance and force arguments are no longer as convincing and effective as they were before. The world cannot be ruled from one capital. Those who refuse to understand this will merely be creating new problems for themselves and others.The move by the majority of countries to a genuinely pragmatic multi-vector policy shows that the strengthening of international institutions is topical. It is from these positions that we view Russia's participation in formats such as the G8, the Shanghai Cooperation Organization, BRIC, APEC and other organizations.

The third task is to establish universal diplomatic methods for settling crises. I have already spoken about it in relation to the lessons of Tskhinval (Tskhinvali). I would add that in order to achieve positive results, problem countries, irrespective of their location in the world, should be engaged in dialogue, rather than isolated. We are ready to facilitate the settlement of any regional conflicts.

Foreign economic policy and new rules for world financial architecture

Fourth, a permanent dialogue with our partners is needed for the speediest possible establishment of new rules for the world financial architecture. Monopoly over this sphere has been found to be not just inadequate for the realities of the modern global economy but also dangerous for everybody. That is why the new financial architecture should guarantee the interests of all its parties. (Applause) At the same time, it should be protected against it being used by one country, one group of countries or one economic system in order to redeem its economic blunders at the expense of others.

You know that the G20 countries have decided to meet in Washington on 15 November. We have prepared and sent our proposals for the creation of a new economic architecture to our partners. We believe that global financial institutions should be given effective means of preventing crises and minimizing their consequences for the rest of the world, irrespective of their country of origin or the markets they affect, be they financial, energy or food markets.

The minimum set of tasks includes the drawing up of new systems of risk assessment reflecting the interdependence of financial institutions and the real sector, the introduction of modern methods for revealing objective information on market players and financial operations, the harmonization of accounting and financial reporting standards, as well as tightening the requirements for the capital of financial institutions. The mandates for tackling these tasks should be distributed among existing international organizations and ones that are being created anew - by the way, regional organizations as well. The role of the leading countries would be to guarantee the effectiveness of their operation.

While building this architecture one should not forget the words of the well-known economist Wassily Leontief that the system of free enterprise can be compared to a gigantic computer capable of solving its problems automatically, but everyone who has dealt with big computers knows that they occasionally break down and cannot operate without supervision.

Fifth, by the end of this year a package of laws should be adopted forming the basis for establishing in Russia one of the leading world financial centres. This centre should serve as the nucleus of an independent and competitive Russian financial system. (Applause)

It is necessary to take practical steps to strengthen the role of the rouble as one of the currencies for international settlements and, at last, start moving to settlements in roubles, (interrupted by applause) moving to settlements in roubles, which we, unfortunately, have dragged out, and of course primarily for gas and oil.

It is necessary to encourage the placement of new securities in roubles and, preferably, on the Russian market. (Applause)

The ultimate goal of all these processes is to make the rouble one of the regional currencies. (Applause) I think that other fast-developing countries will be taking similar steps. But the more strong financial centres in the world, the higher our mutual interdependency will be, the more secure and stable global development will be.

Here is another, sixth task - more active foreign economic policy. Self-isolation is a road to a dead end. We will continue the process of integration into the world economy. But, at the same time, it is necessary to learn how to combine, in a flexible manner, the use of the existing advantages and the opening of new competitive advantages, and, while attracting eternal resources, to effectively defend our own economic interests.

Now it is necessary to actively support our companies in obtaining maximum benefits from the openness of the Russian economy and from the current market situation, despite all its complexity, to help them increase their effectiveness and enter new markets, markets of goods, technologies and labour. Our competitors have no scruples doing so, but we often sit idle, and, in this case, time is running out and, naturally, money is being lost too. What we are waiting for? We have institutions of development, we also have resources, and we are obligated to form a support mechanism that will work without interruption.

Besides, it is important to intensify diversified ties with members of Eurasec and other countries of the Commonwealth (of Independent States), the European Union, China, India and other major Asian partners, at the same time not weakening the opportunities that are opening up in Latin America and Africa, where the interest in mutual cooperation is also present.

Finally, we are ready for mutually beneficial cooperation with all countries and all associations that are intended for and that want to strengthen relations with Russia. We do not think that the existence of disagreements on separate issues is a barrier to frank discussions and to the resolution of the most difficult problems. At the same time, we will build any interaction in an extremely pragmatic manner, taking into account real returns for our country, for all Russian citizens. Geography will play no part in this. The main thing is mutually positive attitude and mutual interest.

Concluding remarks

Esteemed colleagues, the goals, values and mechanisms set forth in the constitution have proved their worth, helped our society overcome difficulties and enter the path of stable development. And we will further use the potential of the constitution to the maximum. The main thing is to do everything necessary to help people fulfil their potential, and especially open the doors to talented and active young people. They are contemporaries of the new democratic Russia. They embody its openness, its free spirit, and aspiration to everything progressive. They will bear the responsibility of preserving our fundamental values. The free development of people and their social protection will always be a priority for the state's policies, will be our main concern and the goal of the development of our society.

Dear friends, we live in a free and modern country. We have already managed to do a lot. We have positive experience of creating a democratic state. We have not just successes, we have real victories. We are moving forward together to find answers to the most difficult questions, achieve new successes and gain new victories.

Thank you.