Index

10.07.2000

VLADIMIR PUTIN'S STATE OF THE NATION ADDRESS TO THE FEDERAL ASSEMBLY
"THE STATE OF RUSSIA: A WAY TO AN EFFECTIVE STATE"

VLADIMIR PUTIN'S STATE OF THE NATION ADDRESS TO THE FEDERAL ASSEMBLY
"THE STATE OF RUSSIA: A WAY TO AN EFFECTIVE STATE"

On Saturday July 8, President Vladimir Putin made his state of the nation address to the Federal Assembly, called "The State of Russia: A Way to an Effective State (On the Situation in the Country and the Guidelines of Its Domestic and Foreign Policy)." We offer you the full text of the address.
Dear deputies of the State Duma and members of the Federation Council, Dear citizens of Russia,
I present this state of the nation address to the Federal Assembly of Russia in compliance with the Constitution. I will speak about priorities in state work. Many projects have been launched and we are working on them together. But there are also prospective tasks, which call for hard work. We have come to an agreement with the leadership of the two houses on meeting a little after I make this address to discuss its basic elements. I hope very much that this talk will help us to effectively organise work in hand.
This time the state of the nation address is presented not at the beginning of the year, but in mid-year, for objective reasons of which you are aware. The first was the presidential elections. Only an effective head of state has the right to set policy tasks for the bodies of power, and he alone has the real possibility to organise their effective fulfilment.
The past six months showed that there is a sufficiently high level of accord in society on the fundamental questions of the development of the country. A constructive, although complicated, joint work of the legislative and executive authorities has begun. The newly formed federal government is proving its ability to work in a systematic and planned manner. The policy documents on the socio-economic development of the country have been approved on the whole. We see the etatist attitude to one's job in many spheres.
I am grateful to the Federal Assembly and the government for pooling efforts without delay to elaborate and implement decisions of vital significance for the country. I want to thank all citizens, all those who supported us in this undertaking. I hope for your continued active involvement in the affairs of the Russian state.
The discussion of laws on improving federal relations and changing the situation in the social and tax spheres was a major event of the past few months. Their enforcement will become the new point of departure in state development and rules of behaviour in the economy. A time is coming in Russia where the authorities assume the moral right to demand compliance with the established state norms.
One of the most acute, if not the most acute, problems of the past few years was unreasonable taxation. Much has been said about it, but this did not set the problem in motion. The discussion moved in a circle. And few saw that the situation could change. We have made the first steps in this direction today. New legislative parameters are being elaborated, thus setting new rules. But the work in this sphere, as we have just discussed with the premier, is proceeding with great difficulties.
The introduction of a common tax rate, the reduction of the norm of deductions to social and extra-budgetary funds will help us to take incomes out of the shadow. The lifting of a part of the tax burden will enable honest businessmen to confidently develop their businesses in their own country.
We must admit that the dictate of the shadow economy, grey schemes, the sway of corruption and the mass withdrawal of capital abroad were largely facilitated by the state itself, its loose rules and undefined unjustified limitations.
We vacillated for a long time between relying on others' advice, assistance and loans, and developing on the basis of our ingenuity and our own forces. Many countries of the world faced a similar choice. If Russia remains weak, we will indeed have to make the choice. But it will be a choice of a weak state, the choice of the weak.
Russia's only real choice should be the choice of a strong country, strong and confident. Strong not contrary to the world community, not against other strong states, but together with them.
Now that we are marching forward, it is more important not to remember the past, but to look into the future. We must do everything so that we all - businessmen, the power structures and all citizens - will deeply feel our responsibility to the country. So that strict compliance with law will become a conscious choice of all citizens of Russia. A policy based on open and honest relations of the state with society will protect us from repeating past mistakes and will become the fundamental condition for a new social agreement.
Dear colleagues,
Before speaking about priorities and setting tasks, I will enumerate the most acute problems facing the country. We have grown used to regarding Russia as a system of the bodies of power or as an economic organism. But Russia is above all its people. The people who regard it as their home. Their prosperity and befitting life is the main task of power. Any power.
However, the situation in our home is far from comfortable. Many people find it difficult to bring up their children and ensure a befitting old age to their parents. Life is difficult. The number of us citizens of Russia is becoming smaller with every passing year. For several years now the population of the country has been diminishing by an average of 750,000 a year. To believe forecasts - and they are based on the real work of those who know what they are doing and devoted their life to this research - the population of Russia can dwindle by 22 million in 15 years. Please, think about it. A seventh part of the national population. If the current trend persists, the nation's survival will be threatened. We are facing a real threat of becoming an ageing nation. The demographic situation is one of the most alarming now.
Another serious and persisting problem is the economic weakness of Russia. The growing gap between industrialised countries and Russia is pushing us into the ranks of Third World countries. We must not allow ourselves to become soothed by the figures of the current economic growth. We are still living in conditions of progressive economic backwardness. I ask you to pay special attention to this. At a glance, the national economy looks nice now. The GDP, industrial production, investments and tax collection are growing. But economic growth, just as during the period of resurgence in 1997, is on the edge of a fall.
Two years ago our outward welfare, based on large-scale state loans, collapsed under the blow of a powerful financial crisis. The current economic figures look optimistic only if compared to yesterday's figures. I want to stress this - only if compared to yesterday's figures. But they are very modest if compared to other countries, which are developing much quicker and with greater stability than we do. The current growth is connected to an insignificant degree with the renewal of the economic mechanism. It is largely a result of a favourable foreign economic situation.
I would like to digress from the text and remind you of what I have said at the beginning - the tax reform. I ask the deputies of the State Duma to carefully consider what the government suggests in the context of what I have said above. We cannot tolerate this situation. And the point at issue is not just our pride as a nation. Although it is important, too. The question goes much deeper and is more dramatic: Will we survive as a nation, as a civilisation if our prosperity will again and again depend on international loans and the benevolence of the leaders of the world economy?
Russia needs an economic system that would be competitive, effective and socially fair, that would ensure a stable political development. A stable economy is the main guarantee of a democratic society and the cornerstone of a strong and respected state.
Russia has come across major external problems. It is involved in all global processes, including economic globalization. We have no right to miss the nascent information revolution in the world. We cannot and must not lose strategically. This is why we have recently approved of a concept of foreign policy, a renewed foreign policy concept. It stipulates the domination of internal goals over external ones. The independence of our foreign policy is doubtless. It is based on pragmatism economic efficiency, priority of the national task. But we will have to work yet to turn these principles into a norm of state life.
The Cold War is a fact of the past, but we still have to overcome its grave consequences. I mean the attempts to infringe on the sovereign rights of states under the guise of humanitarian operations, or, as it has become fashionable to say now, humanitarian interventions. I mean difficulty in finding common language on questions of regional or international threat. For example, in conditions of the type of external aggression that is novel to us, international terrorism and a direct attempt to carry the threat inside the country, Russia came across a systematic challenge to its state sovereignty and territorial integrity. It found itself face to face with forces that aspire to overhaul the geopolitial structure of the world.
Our attempts to rid Russia of this threat are sometimes considered with bias, lop-sidedly, and are used as a pretext for all kinds of speculations. In this sense, the promotion of an objective view of Russia and honest information about developments in this country should become a major sphere of our foreign policy. It is a matter of its reputation and national security today. The answer to this and many other challenges cannot be given without the strengthening of the state first. Not a single national task can be fulfilled without it. And although the strengthening of the state had been proclaimed the priority goal of the Russian policy for quite a few years now, we have not moved beyond declarations and fine phrases. We haven't.
Our key task is to learn to use the instruments of the state for ensuring freedom. The freedom of the individual, the freedom of entrepreneurship, and the freedom of the development of the institutes of a civic society.
The dispute about the balance of power and freedom is very old. Old as hills. And it still engenders speculations about dictatorship and authoritarianism. Our stand is absolutely clear. Only a strong, effective - if someone does not like the word "strong," we will say that only an effective and democratic state can uphold civil, political and economic freedoms. It can create conditions for a prosperous life for the people and for the prosperity of the Homeland.
Dear [State Duma] deputies and members of the Federation Council,
The roots of many of our failures lie in the underdevelopment of civic society and the inability of the power to speak and cooperate with it. The power is rushing from one extreme to another. It either does not notice, or excessively protects society. And it is believed that everything in Russia depends on the authorities. Indeed, the authorities are responsible for everything. But much depends on the Russian citizens themselves. The development of the country largely depends on the level of their responsibility, the maturity of political parties and public associations, and the civic stand of the mass media.
Fundamental changes took place in the country in the past few decades. The Constitution guarantees human rights and freedoms, and we have developed a democratic political system. The multiparty system is a reality now. Russians elect their president, the deputies of the State Duma, governors, mayors and local self-governments.
But the letter of the law and real life are sometimes far removed from each other. Russia now has only the carcass of a civic society. We must persistently work all together now for society to become a full-fledged partner of the state. We cannot yet combine patriotic responsibility for the future of the country with something that Stolypin described as civil liberties. This is why it is very difficult for us to find a way out of the false conflict between the values of personal freedom and the interests of the state.
Meanwhile, a strong state is unthinkable without respect for human rights and freedoms. Only a democratic state can ensure a balance of the interests of the individual and society, combine private initiative with a national task.
Political parties ensure uninterrupted connection between the people and the authorities in a democratic society. The elections created the best conditions for the development of this vital instrument now. The policy of the majority cannot be pursued and the positions of the minority cannot be protected without parties.
The drawbacks of our party system are seen especially well against the background of century-long parliamentary traditions and the multiparty system of other countries. A weak power needs weak parties. It is easier and more comfortable for it to live by the rules of political bargaining. But a strong power wants strong rivals. Serious dialogue on the development of our state is possible only in conditions of political competition. Russia needs parties that enjoy mass support and stable prestige. It does not need bureaucratic parties leaning on the power, or worse still, replacing it. Practice shows - we have seen this in the past few years - that such formations die as soon as they get from standard, usual conditions into a competitive medium.
The time is ripe now for drafting a law on parties and party activity. In point of fact, it is in the State Duma, this draft law. I think we should work more actively on it.
Maybe only socio-political associations should nominate candidates to the post of the head of state. I understand that this is a serious question, and it calls for a separate broad discussion.
The current situation in the trade union movement is a separate question. These associations of citizens also suffer from formalistic and bureaucratic trends. In these new conditions the trade unions should not try to assume state functions in the social sphere. They should not do this. The citizens of Russia need not new intermediaries in the distribution of social benefits, but professional control over the fairness of labour contracts and compliance with their conditions. This means that the task of trade unions is to protect the rights of hired labour in both the public and private sectors. They should study the structure of the market, organise the study of laws and establish priorities in the sphere of retraining personnel. This is a major sphere of activity, and the state alone cannot cope with the tasks here. And it should not work alone. It should work jointly with trade unions.
The mass media play an exceptional part in the development of civic society. We speak much and frequently about this problem. In protecting the right to freedom, Russian journalists frequently risked their career. Moreover, they risked their lives. Many of them died. And yet the free press was created in Russia. However, the Russian mass media, just as society as whole, are still in the making. We must openly say this. They are the mirror reflecting the problems and growth pains of the country. For they are working here, in this country, and do not watch developments from an island. Society and the state determine journalism. This is why when I am told that I should tackle the mass media, do this or that, [I reply that] we should tackle society as a whole and then the mass media would change. But Russian democracy will not survive and a civic society will not be created without truly free mass media.
Regrettably, we have not yet elaborated clear-cut democratic rules that would guarantee genuine independence of the fourth estate. I repeat, genuine independence. Journalistic freedom has become a coveted goal for politicians and the largest financial groups, a reliable instrument of inter-clan struggle. As the president of this country, I think it is my duty to draw the attention of the public to this. The law prohibits censorship and interference in the operation of the mass media. The authorities strictly abide by this rule.
But there can be not only state censorship and administrative interference. For the economic ineffectiveness of a considerable part of the mass media makes them dependent on the commercial and political interests of their masters and sponsors. It enables them to use the mass media for settling accounts with rivals, and sometimes to turn them into mass misinformation media, an instrument of fighting the state.
This is why we must guarantee journalists genuine, rather than paper freedom by creating legal and economic conditions for a civilised information business. The freedom of speech has been and will remain the inviolable value of Russian democracy. This is our position of principle.
I would like to speak about one more major subject. I am convinced that the development of society is inconceivable without accord on the common goals. And these are not only material goals. Spiritual and moral values are no less important. The unity of Russia is ensured by traditional patriotism, cultural traditions, and our common historical memory. There is growing interest for national history, our roots, everything that is near and dear to all of us in the arts, theatre and cinema. This is undoubtedly - at least I am confident of this - is the beginning of a new spiritual development and rise.
A democratic structure of the country and openness of new Russia do not contradict our national distinction and patriotism, do not prevent us from finding our own answers to spiritual and moral questions. And there is not need to search for a national idea. It is growing in society. The main task is to understand in what Russia we believe and what Russia we want to have. We have always had and still have common values despite the variety of views and opinions and a large number of party platforms. These are the values that bring us together and allow us to be called an integrated people.
Dear colleagues,
Before discussing specific economic policy priorities, we should, first of all, find out the causes of present-day economic growth, also ascertaining whether such growth is sustainable, and to what extent can it be affected by external factors. I've discussed this in the beginning. However, I'd now like to dwell on such issues in greater detail.
On the one hand, current indicators can be partially explained by that rather favorable foreign trade situation. Everyone in this hall understands perfectly well, what I'm talking about. On the other hand, though, the behavior of enterprises and market players is beginning to change, as well. All of them continue to pay more attention to solvent demand, as they cut back on production costs. This fact should not be overlooked either.
At the same time, such trends might fail to catch on just because all those profound causes of our unstable economic performance remain well-nigh the same. Basic economic performance principles tend to change rather slowly here. Such problems boil down to the state's excessive interference in those specific spheres, which should be devoid of such interference. Apart from that, the afore-said state interference is lacking inside some sectors which need it. As of today, the state keeps interfering too actively in the field of property, business and, partially, consumption. On the contrary, the state behaves rather passively in the context of creating a common economic space, ensuring the unfailing observance of laws, as well as the protection of property rights. Economic growth is being mostly hindered by sky-high taxes, bureaucratic arbitrary rule and rampant crime. The solution of these problems depends upon the state. However, an expensive and extravagant state is unable to slash taxes. A corruption-ridden state lacking clear-cut prerogatives won't rid businessmen of bureaucratic arbitrary rule and the underworld's influence. I'm absolutely sure that an ineffective state constitutes the main cause of that lengthy and profound economic crisis, whose manifestations are here for everyone to see.
Quite a few Russian enterprises, which have managed to survive as a result of the rouble's devaluation, low fuel-and-energy tariffs, payment defaults and barter deals, for the most part, still remain non-competitive. The economy still attaches priority to its raw-materials sector, what with federal budget revenues largely depending on global fuel-and-energy prices and related pricing trends. We keep losing to other competitors on the international market, which continues to attach priority to innovation sectors, as well as that new hi-tech economy of knowledge ever more actively. A considerable segment of Russia's economy is still controlled by the underworld. An exorbitant state debt, external debt, in particular, is seen as a manifestation of our weak state and its inconsistent behavior in implementing the required transformations. Despite repeated debt-restructuring plans, the state-debt burden still threatens the state's development. Stockpiled debts compel us to spend at least one-third of all federal budget revenues in the form of debt-servicing payments. But the trouble is that such payments don't become ever smaller. To cut a long story short, these debt-restructuring schemes cause our debts to swell all the time.
We have fallen hostage to an economic model which is based on a populist policy, trying to cope with our sicknesses with the help of cosmetic and window-dressing measures. However, we used to postpone comprehensive, principled and long-term decisions all the time.
We must learn our lessons from such experience, also admitting that, doubtless, the state's key economic role boils down to defending economic freedom. Our strategic line is as follows -- less administration by fiat, more free enterprise, e.g. free production, trade and investment. In a nutshell, state economic regulation should not imply the excessive use of administrative leverage as well as the state's expansion into specific sectors. We have already utilized such ineffective options. Nor should the state aim to prop up selected enterprises and market players. On the contrary, it would be expected to protect private initiatives, regardless of specific forms of property. Russia's powers-that-be are supposed to streamline those specific state institutions responsible for ensuring the market's operation. We would fail to achieve sustainable development without genuinely independent courts and an effective law-enforcement system.
I'd like to emphasize the fact that no national program is going to succeed, unless we ensure a common economic and legal space. Any federal state should perceive this as an axiom. However, everybody tends to restrict nationwide economic activity at this stage. Such restrictions are being imposed by federal, regional and local governments alike.
The federal establishment is responsible for ensuring a common nationwide economic environment. But the thing is that territorial administrations often ban grain deliveries to other parts of the country, also restricting alcohol trade, hindering the establishment of "alien" banks' subsidiaries and impeding the free movement of capitals, goods and services. This is a real shame and disgrace. All these apparently profitable actions are leading us toward disaster. So many European states had signed the 1957 Rome agreement stipulating the free movement of people, goods and services. Its provisions are still valid. Meanwhile Russia, which is an integral state, can't accomplish all these goals.
Any actions on the part of regional authorities that aim to restrict economic freedom must be thwarted as something unconstitutional; and the concerned officials guilty of doing this must be punished. Russia's regions must compete for investment and workers, rather than for specific powers. This can only be accomplished by improving, rather than aggravating, the relevant economic environment.
One should admit that the state won't be able to shy away from taking part in the development of some economic sectors, the military-industrial sector included. I'm talking about direct state involvement here. Well, the state should not shy away from doing this. The state is going to keep an eye on all vital strategic sectors without respite.
Dear members of the Federation Council,
Unfortunately, the so far unfavorable national business climate tends to improve at a snail's pace. Corporate risks and taxes remain high. Corporate-registration mechanisms are cumbersome, what with local businesses suffering from endless inspections, too. In some cases, the functions of state-administration agencies have become mixed up with those of commercial organizations. This intolerable situation must be rectified. The Government and its Prime Minister must work more actively in the given field. We know that some central departments directly combine economic and administrative functions. This is not the way to behave because such an approach runs counter to common sense and current legislation.
We must first protect property rights accordingly. The state shall guarantee share-holders' access to corporate-performance records, also restricting capital-erosion opportunities, as well as those for salting away corporate assets elsewhere. Citizens' property rights must also be protected; the same is true of their property rights as regards housing, land plots, bank accounts, as well as all other real estate and movable property. We must stipulate the relevant legal foundations (as regards private-property rights) in those particular areas where they are still non-existent. This concerns land and real estate, in the first place. All these sensitive issues should be tackled jointly and rather cautiously by the Government and the Federal Assembly.
Equal competition opportunities constitute the second direction. At present the state keeps granting privileges to some enterprises, which are entitled to lower fuel-and-energy tariffs. They are also allowed not to repay their debts, boasting numerous other privileges, too. At the same time, other enterprises, which apparently enjoy equal rights on a par with the former, are being openly discriminated against, as they pay for the afore-said entities' privileges. Consequently, we should abolish all unjustified privileges and breaks, as well as direct and indirect corporate subsidies (regardless of their motivation). The relevant legal grounds will always be obtained. We must ensure an equitable approach during the allotment of federal appropriations, licenses and quotas, also eliminating bankruptcy proceedings. This is seen as an extremely important and painful sphere of state activities. Some regions have turned this into a veritable means for squaring accounts with political and economic rivals.
The third direction is as follows -- businessmen must be rid of that bureaucratic oppression. The state must consistently shy away from excessive interference in business operations.
Federal and regional officials can act, as they fit, interpreting specific legislative norms in line with their own considerations. However, such behavior tends to stifle businessmen, also creating favorable conditions for corruption. We must apply direct-action laws, minimizing the list of departmental instructions and ruling out the dual interpretation of normative acts. Apart from that, we've got to simplify the relevant procedure for registering enterprises, for conducting expert checks, for coordinating investment projects, etc. Many of those present in this hall know all about this because they have tackled such issues, also watching others do this.
The fourth direction is the easing of the tax burden. Today the tax system helps tax evasion on a mass scale, digression of the economy into the shadow, diminution of investment activity and, in the final analysis, decline of competitiveness of Russian business and of the Russian state's competitiveness. The first move to reform the tax system has been made. Let us further move along this road. You must have paid attention to the fact that I deal with this problem for the third time.
The existing customs system cannot be called effective, either. There is a myth that it is possible to protect the Russian goods manufacturer by manipulating tariff rates. Honestly speaking, I also held this view. But in the context of the current level of customs administration, I want to stress this, in the context of the present level of customs administration such a system protects and encourages corruption to a greater extent. For this reason, it is necessary to cardinally simplify the customs system, to unify the tariff rates.
The development of financial infrastructure is the fifth direction. The banking system must be cleared of inviable organisations. Transparency of banking activity should be ensured. The stock market must become an effective mechanism for mobilising investments, for their channelling into the most promising sector of the economy.
A realistic social policy is the sixth direction. I say "sixth", though, of course, it could be put in first place from the standpoint of its significance. Today the policy of universal state paternalism is economically impossible and politically inexpedient. Renunciation of it is dictated by the necessity of the most effective use of financial resources, as well as by the striving to switch on the stimuli of development, to set man's potential free, and to make man responsible for himself for the sake of well-being of his near ones.
A social policy means not only assistance to the needy but also investments in the future of man, in his health, in his professional, cultural and personal development. That is why we will give priority to the development of the sphere of health services, education and culture.
The present system of social support, based on address-free social allowances and privileges, is organised in such a way that it scatters state funds, and allows the rich to use social benefits at the expense of the poor. The formally free education and health services are, in effect, paid and are sometimes inaccessible to people in low income brackets. The children's allowances are scanty and are not paid for years, and pensions are meagre and are not tied to the real labour contribution. A state lie has become firmly established. It is opportune to say this in this hall where all of us have come together - we adopt numerous laws, being aware that they are not ensured by real financing. We simply press one or another decision because of the political situation, and that is all.
We have no other way out but to reduce the excessive social obligations and to strictly fulfil those which we will retain. This is the only way to restore the people's trust in the state.
Ensurance of financial stability of the pension system is a major national task. The state is duty-bound to prevent its crisis caused by the rapid ageing of Russia's population. For this purpose it is necessary to entrench mechanisms of accumulation financing of pensions. It is necessary to switch over to this system accurately, stage by stage, but it is absolutely necessary to move in this direction.
We will pursue the social policy on the principles of accessibility for all and acceptable quality of the basic social benefits. Assistance should be given first of all to those whose incomes are considerably below the subsistence minimum. The children of ministers can do without a children's allowance, and the wives of bankers - without a dole.
Dear colleagues,
We have made sure that indecision of power and weakness of the state reduce economic and other reforms to zero. Power is duty-bound to rely on the law and on the single executive vertical formed in conformity with it. We have created islands, separate islets of power but we have not built any bridges between them. We have not yet built effective interaction among different levels of power. You and I very much and frequently talked of this. The centre and the territories, the regional and the local authorities still compete among themselves, compete for powers. And their mutually destroying fight is watched by those who benefit by disorder and arbitrariness, who exploit the absence of an effective state for their own purposes. Some people would like to preserve such a situation for the future.
The vacuum of power has led to the takeover of the state functions by private corporations and clans. They have acquired their own shadow groups, groups of influence, and dubious security services which use illegal ways to obtain information.
But the state functions and state institutions differ from the entrepreneurial ones by the fact that they must not be bought or sold, privatised or granted for use, let out on lease. Professionals for whom the law is the sole criterion of activity are needed in state service. Otherwise, the state opens the door to corruption, and a moment may come when it will simply degenerate, stop being democratic.
That is why we are insisting on only one dictatorship - dictatorship of the law, though I know that many do not like this expression. That is why it is so important to show the confines of the field in which the state is a full-fledged and the only master, to say in no uncertain terms where it is the last arbiter and to mark the spheres in which it must not interfere.
Initiative and responsible federal bodies of executive authority should become the driving force of our policy. Their powers are based on their constitutional duty to ensure the strength of the power vertical structure, on the nationwide credit of trust received as a result of democratic presidential elections, and a uniform strategy of domestic and foreign policy. However, the federal authorities will not be able to achieve their aims without due coordination of their work with regional and local bodies of power. Local power should also be effective. What is meant, in fact, is the pooling of all the country's resources so as to implement its uniform development strategy. We must admit that federative relations in Russia have not been fully built and developed. Regional autonomy is often interpreted as a sort of permission to disorganise the state. We are talking constantly, for years, about the Federation and its strenghtening. However, we must admit that we do not yet have a full-fledged federative state. I want to underline this: what we have, what we have created is a decentralised state. This is what we have created over the past years.
When the Russian Constitution was being adopted in 1993, the federative statehood was regarded as a worthy aim which should take lots of time and effort. In the early 1990s, the Centre placed a lot at the regions' disposal. This was a conscious, substantiated albeit partly forced, policy which helped Russia's leadership to achieve the main thing -- to keep the Federation within its borders. This must be recognised; the easiest thing to do is to criticise what was before us.
However, very soon, authorities in some members of the Federation began trying the strength of central power, so the response did not take long in coming. But I want to draw your attention to the following: the response was coming not from the Centre, not from Moscow, but from towns and villages. Local self-government bodies also began drawing up powers, mostly those of the Federation subjects, for themselves. Now, all bodies of authority are infected with this disease. To break this vicious circle is our common and sacred duty.
Chechnya is an extreme example of unresolved federal problems. The situation in the republic has aggravated to such an extent that its territory has become a bridgehead for the expansion of international terrorism in Russia. The main reason for this was also a lack of state unity. Chechnya of the year 1999 reminded us of our former mistakes. Only the anti-terrorist operation could help avert the threat of Russia's disintegration. Professional servicemen helped preserve Russia's dignity and integrity. We pay our deep respect to them. However, it has cost us dearly.
Dear members of the Federation Council,
Dear State Duma deputies,
One of our first steps towards strengthening federalism was the creation of federal districts and appointment of the president's representatives in them. This decision aims not at enlarging the regions, as it is often understood or presented, but at increasing presidential vertical structures in the regions, not at recarving administrative-territorial borders, but at enhancing the effectiveness of state power. There is no intention to weaken regional power but rather to create conditions for strengthening federalism.
I want to stress in particular that with the creation of federal districts the federal authorities have not become farther from the regions, they have come even closer to them.
Public opinion ascribes dangerous intentions to the president's representatives. They are pictured as the sword of Damocles, as bureaucrats-intermediaries between the Centre and the regions. Meanwhile, by reducing the staff of federal servants in the regions, we want to achieve their mobility and efficiency. By clearly outlining the limits of the federal representatives' terms of reference, we make their work transparent for regional administrations and the local population.
By rejecting the duplication of functions, we personify responsibility. This decision, undoubtedly, cements the country's unity.
The president's representatives will, of course, help to effectively solve their districts' problems. But they are not entitled to intrude into the sphere of competence of the elected heads of the regions. In their work, the president's representatives will rely only on law and the powers that have been given them.
Our second step is to determine the possibility for federal interference into the situation when local authorities trample underfoot Russia's Constitution and federal laws, when they violate uniform rights and freedoms of Russian citizens.
In the regions today, a state body or official may decline to comply with a court ruling which recognised a law or a norm-setting legal act as unconstitutional or contrary to the federal legislation. They may continue to apply acts which are found invalid by the court. This is the reality of our life, every now and then. Such humiliation of the Russian court, which is a branch of federal power acting on the basis of the Constitution, is intolerable.
That is, properly speaking, an exterior manifestation of what I said - that our state is not federative, but decentralized. And there is no instrument yet developed to bring this to the end.
Federal Authority and the Russian President must have the legal power to bring order. And regional leaders must have the right to influence local bodies of power if they accept a non-constitutional decision and infringe on citizens' freedoms. In no way must we relax the powers of regional authority. This is a link on which federal power cannot but rely. But similar institutions of interference also exist in many other federal states. They are used very rarely. But their very presence is a firm guarantee of precise implementation of the Constitution and federal laws. However, even now at the stage of discussing this problem, the Russian regions have already begun to bring their house in order. In some territories we see quite an obvious result. Our next step is to carry out a reform of the Federation Council. And this is also movement in the direction of democracy, towards the professional principles of parliamentary activity.
The changing of the principles of formation of the Federation Council raises the question of arranging a permanent dialogue between heads of constituent members of the Russian Federation and the head of state on basic problems of state power. Now about the form in which regions take part in the drafting and adopting of major state decisions. Such a form may be provided by a State Council under the Russian President, its idea was voiced by some governors. And I as the President of the country am ready to support it.
I would like to dwell now on one more problem - a universally unfolding struggle between mayors and heads of municipal formations, on the one hand, and regional leaders, on the other. It is only in rare case that this struggle can be seen as upholding the interests of local self-government as an institution of power. It is too often that local self-government begins and ends with mayors. And so one should not mix personal ambitions and a power tug of war with the protection of real human interests. The higher responsibility of leaders of the Federation's constituent members and legislatures should be accompanied by higher responsibility of heads of municipal formations. To be sure, this does not negate the need for further development of local self-government itself. It is under the protection of the federal Constitution and is one of the fundamental principles of people's power in Russia.
Dear colleagues,
Today we, above all, uphold the task of bringing order into the bodies of authority. However, this is not our ultimate goal, but the very first stage of state modernisation. To pool the resources of federal, regional and local authorities will be needed for implementing other complex tasks.
The main of them are as follows:
- to improve the political system and build the efficient state as a guarantor of steady social progress and observance of the rights of the individual;
- to create equal possibilities for the Federation subjects to assure all political and socio-economic rights for the country's citizens;
- to create legal guarantees for the development of the Russian economy as one of free enterprise and business initiative of citizens, and to ensure precise and effective implementation of economic strategy all across Russia.
We shall consistently fulfil these three tasks in order to strengthen our statehood. For this purpose, we are simply obliged to consolidate the efforts of all levels and branches of power now.
In concluding my address, I want to remind you that every state servant takes on responsibilities before the state and the entire Russian society. These responsibilities are embodied in the mandate of a deputy, governor, member of government. Despite differences in posts, we all have our common duty. This is our duty to the people and to our country. It is not so easy to promise anything in Russia now. Promises have been given many times, but they have not been fulfilled. Decades of hard and unstable life is a sufficient period for demanding a real change for the better. The Russian government must achieve a change in the near future. We all understand how difficult it is to attain this goal. But I am sure we have enough common sense and willpower to achieve this. If we do this, there will be a result bringing stability and national progress, success and Russia's prosperity.
Thank you very much for your attention.
(RIA Novosti, July 8. In full.)