Russian President Vladimir Putin Delivered His First State of the Nation Address to The

POLICY MEMO

STRENGTHENING DEMOCRATIC INSTITUTIONS PROJECT

July 13, 2000

RUSSIAN PRESIDENT PUTIN’S STATE OF THE NATION ADDRESS

Russian President Vladimir Putin delivered his first State of the Nation address to the Russian legislature on Saturday, July 8. In it he identified what he sees as the country’s central challenges and offered his plans for addressing them. Given general fatigue with rhetoric from Russian leaders and pundits about Russia, it is easy to miss the significance of what he said. To underline the point, consider the following multiple choice “quiz” on key questions Putin raised. –Graham Allison, Director, SDI Project

According to Putin’s speech:

1.  Unless Russia accelerates structural reform well beyond anything achieved in the past decade, Russia will be in danger of:

a.  stagnation

b.  losing respect of other great powers

c.  being demoted to “second world” status

d.  being demoted to “third world” status

2.  Russia’s current real economic growth (8% growth, 10% increase in industrial output this year) is principally the result of:

a.  success of IMF-recommended reform of Russia’s economy

b.  bottoming out; the only way to go is up

c.  strong leadership

d.  foreign economic factors: devaluation of the ruble and strong commodity prices

3.  The proper role of the state in the economy is:

a.  a strong regulatory presence reflecting Russia’s history and traditions

b.  strict management of Russia’s natural and human resources

c.  reassertion of control over main financial- industrial groups

d.  less administration, more free enterprise, more freedom to produce, to trade, and to invest

4.  The main obstacle to growth is:

a.  unreasonably high taxes

b.  arbitrary actions of civil servants

c.  rampage of criminals

d.  all of the above

5.  Russia’s enterprises have survived thanks to:

a.  clever management

b.  painful restructuring

c.  fierce competition

d.  devaluation of the ruble, maintenance of low prices for energy, and barter

6.  The principal objective of restructuring relations: between Moscow and the regions is to:

a.  prevent disintegration

b.  punish wayward governors

c.  revive the Russian Empire

d.  create a single economic and legal space

7.  The main cause of Russia’s lengthy and profound economic crisis is:

a.  international financial institutions

b.  hostile foreign powers

c.  unscrupulous oligarchs

d.  Russia’s “ineffectual state”

8.  To promote economic growth the Russian state should:

a.  intervene less in the economy

b.  encourage more free enterprise

c.  protect ownership and shareholder rights

d.  all of the above

9.  Freedom of press in Russia is the responsibility of:

a.  Russian citizens

b.  Russian state authorities

c.  the oligarchs

d.  all of the above

10.  The most important reason to strengthen the state is to:

a.  ensure equal opportunities to the constituent parts of the federation

b.  create legal guarantees for the development of the Russian economy

c.  ensure effective implementation of economic strategies everywhere in Russia

d.  all of the above

(Answers on page 2)

Answers: d

Putin’s first State of the Nation address is notable primarily for its brutal realism, an attribute SDI has consistently identified as one of the defining characteristics of Russia’s new president. In the speech Putin blames the state for allowing a “dictatorship of the shadow economy,” “raging corruption,” and “massive outflow of capital overseas.” He cautions that recent economic growth is the result only of high commodity prices and the lingering effects of the ruble devaluation, warns that the economy is on the verge of collapse, and that Russia risks sliding into third-world status. Russia’s business climate, he concludes, is “unfavorable.” When describing his cure for Russia’s ills, Putin falls back on a familiar mantra: strengthening the state. Only a strong state, he argues, can stabilize the economy, defend Russia’s reputation abroad, and propel the country into the information age. (If you don’t like the word “strong,” think “effective,” Putin tells doubters.) But the substance of Putin’s speech is strikingly free-market, and his prescriptions focus overwhelmingly on the economy. He condemns excessive state interference in the economy and calls for “less administration, more free enterprise, more freedom to produce, to trade, and to invest.” The state, he asserts, must protect private property rights, defend shareholder rights, and “liberate businessmen from administrative dictatorship.” In addition, Putin delivers a standard textbook argument in favor of developing Russia’s democratic institutions: a vibrant civil society, strong political parties, independent trade unions, and independent media outlets. Of course, there are moments when Putin seems to lapse into the perhaps more comfortable lingo of a state security specialist, for instance when he says “provision of accurate information on developments in our country” is an issue of “national security,” or when he speaks darkly of having to “face forces seeking geopolitical reorganization of the world.” Still, on the whole Putin’s address sets out an ambitious agenda for building what his predecessor, Boris Yeltsin, used to call a “civilized, normal country,” satisfying the economic and political needs of its people at home and maintaining the respect of other countries abroad. If Putin is able to match these words with actions—and that is another question entirely—then this first State of the Nation address may prove to be significant indeed. –Ben Dunlap,

Putin’s speech

KEY QUOTES

On the economy:

·  “Easing the tax burden will make it possible for conscientious and hard-working entrepreneurs to develop their own business in their own country with confidence.”

·  “We must admit that the state has to a greater degree facilitated the dictatorship of the shadow economy and grey schemes, the raging corruption and massive outflow of capital abroad.”

·  “Today’s economic indices look optimistic only against the background of yesterday’s.”

·  “Many of our failures are rooted in the fact that civil society is underdeveloped and the authorities do not know how to communicate and cooperate with it.”

·  “Will we be able to survive as a nation, as a civilization, if our wellbeing, again and again, will depend on international loans and favors from leaders of the world economy?”

·  “The main obstacles to economic growth are high taxes, the arbitrary actions of functionaries and the rampage of criminals.”

·  “We have no right to miss out on the information revolution which is now gaining momentum in the world.”

·  “We are losing out on the competitive world market, which is geared more and more to innovative sectors and to the new economy: the knowledge and technology economy.”

·  “Unfortunately, the business climate in our country is improving too slowly. It still remains unfavorable.”

On political parties:

·  “Russia does not need another bureaucrats’ party that sucks up to the authorities…”

·  “Perhaps only public and political associations should have the right to nominate candidates to the post of head of state.”

·  “It is advantageous for a weak power to have weak parties… But a strong power is interested in having strong rivals.”

On the media:

·  “Without truly free media Russian democracy will simply not survive, and we will not succeed in building a civil society.”

·  “When people often tell me to come to grips with the media, to do this or that, my response is that we need to come to grips with society as a whole, then the media will naturally change too.”

·  “Economic inefficiency of a large proportion of mass media outlets makes them dependent on the commercial and political interests of the bosses and sponsors of these media outlets…”

On the state’s role in the economy:

·  “The state interferes excessively in spheres where it should be absent and is absent where its presence is needed.”

·  “Our strategic policy is the following: less administration, more free enterprise, more freedom to produce, to trade, and to invest.”

The Strengthening Democratic Institutions Project works to catalyze support for three great transformations underway in Russia and other countries of the former Soviet Union: to sustainable democracies, free market economies, and cooperative international relations. The Project seeks to understand Western stakes in these transformations, identify strategies for advancing Western interests, and encourage initiatives that increase the likelihood of success. It provides targeted intellectual and technical assistance to governments, international agencies, private institutions, and individuals seeking to facilitate these three great transformations.

SDI PROJECT, BELFER CENTER FOR SCIENCE AND INTERNATIONAL AFFAIRS

JFK SCHOOL OF GOVERNMENT, HARVARD UNIVERSITY

79 JFK STREET CAMBRIDGE, MA 02138

Phone: (617) 496-1565 Fax: (617) 496-8779

Web site: http://www.ksg.harvard.edu/bcsia/sdi

Email: